Procter & Gamble Co. is set to raise prices across the board to combat broad-based and sustained inflationary pressures.
The Cincinnati-based consumer goods maker estimates rising input costs will be a $2.1 billion headwind in the company’s current fiscal year. Freight and transportation costs are expected to deliver another $200 million blow.
"We will offset a portion of these higher costs with price increases and with productivity savings," said CFO Andre Schulten on the company’s fiscal first-quarter earnings call. "The degree and timing of these moves are very specific to the category, brand and sometimes the product from within a brand, this is not a one-size-fits-all approach."
Procter & Gamble has announced price increases in nine of 10 products categories.
Mid-single digit price increases have already been implemented for the company’s baby, feminine care and family care products. Similar increases are scheduled in the next 90 days for grooming, skin care, oral care and other products in the company’s portfolio.
"As this pricing reaches store shelves we’ll be closely monitoring consumption trends," Schulten said, noting the company hasn’t yet seen any "notable changes in consumer behavior."
Procter & Gamble, like many other companies, has hiked prices on consumers in order to offset rising costs that have occurred due to supply-chain issues and a shortage of materials and labor coming out of the pandemic.
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Producer prices rose 0.5% in September. They were up 8.6% versus the prior year, setting a record for a sixth straight month.
Higher prices weighed on the company’s first-quarter net income, which fell 4% year over year to $4.11 billion, or $1.61 per share. Net sales, meanwhile, grew 5% to $20.34 billion. That included organic sales growth of 1%, which was helped by recently implemented price increases on products like Pampers diapers.
Procter & Gamble shares were up 2.3% this year through Monday compared with the S&P 500’s 19% gain.
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