The cost of goods is increasing
Cleaner and razor manufacturer Tide and Gillette announced that it will begin increasing the price of beauty, oral hygiene and personal care products such as razors. This price increase will be achieved with an increase in the price of standard products such as diapers and toilet paper.
P&G, which released its quarterly results on Tuesday, said these measures and the increased demand for products will help offset the extra costs.
Inflation in the United States has reached its highest level in the past decade, as labour and material shortages related to the economic pandemic have affected inflation.
"We don't expect costs to go down," P&G chief financial officer André Schulten said in an interview. "We are still seeing growth week on week, albeit at a slower pace."
According to P&G's announcement, same-store sales, excluding transactions and exchange rate fluctuations, increased 4%, at the end of the quarter 04/30. Profits were down slightly. Earnings per share decreased 1% to $1.61.
Expenses are increasing at a rate that exceeds p&g forecasts. P&G currently plans to add $2.1 billion in transportation, pulp, resin and other raw material costs in the 2.1 month period. As of March 7, he predicted billion growth of $1.9 billion.
According to Schulten, the widespread cost increase for the company is due to its efforts to provide inventory, especially as consumers increasingly face shortages of retail space.
According to Schulten, P&G is implementing security vendors, switching transportation routes to avoid bottlenecks, improving products and, in some cases, limiting the amount retailers can buy at one time to avoid stockpiling.
"Consumers think we have a good proposal," he says.
Despite rising costs, P&G maintains its revenue and profit outlook this year due to higher revenues and lower costs.
"Even as more and more people return to work and school, there will be strong demand for top-selling products, such as cleaning products, paper towels and toilet paper," Schulten says. P&G's net sales rose to 5% in the last quarter to 20.3 billion, beating the consensus estimate of FACT analysts surveyed by FactSet of 19.8 billion.
