The cost of doing laundry is going to go up, says Procter & Gamble Co., which announced additional price hikes along with its fiscal second-quarter earnings on Wednesday.
“In mid-December, we announced to retailers that effective Feb. 28, we are increasing pricing on the balance of our Fabric Care portfolio, this includes Tide, Gain, Downy, Bounce, and Unstopables and includes all forms, liquid and unit dose detergents, scent beads, liquid fabric softeners, and dryer sheets,” said Andre Schulten, P&G’s PG, +3.36% chief financial officer, on the earnings call, according to a FactSet transcript.
The company has raised the prices of “mid-tier” liquid and powder detergents over the past few months, Schulten said.
“We’ve now announced price increases in each of our 10 product categories in the U.S., increases in Baby Care, Feminine Care, Adult Incontinence, Family Care, Home Care, Hair Care, Grooming, Oral Care, Skin Care are now effective in market,” he said.
Other brands in the P&G portfolio include Pantene hair care products, Crest toothpaste and oral care items, Charmin toilet paper and the Vicks brand of cough, cold and flu relief products.
Pricing on personal health care products will go up in the U.S. in mid-April. Vicks, Pepto Bismol and Metamucil fall into this category.
“As we’ve said before, we believe this is a temporary bottom line rough patch to grow through, not a reason to reduce investment in the business. We’re sticking with the strategy that has been working well before and during the COVID crisis,” said Schulten.
Like many other companies, P&G has seen the transportation, materials, labor and other costs go up during the pandemic. Inflation is also taking a toll.
“The recent spike in virus cases and resulting lockdowns increase the risk of additional work stoppages in our operations or in those of our suppliers,” Schulten said.
“Based on current spot prices, we now estimate a $2.3 billion after-tax commodity cost headwind in fiscal 2022. Since our last update, we’ve seen continued increases in diesel and chemicals with little offset in other materials. Freight costs have continued to increase. We now expect freight and transportation costs to be an incremental $300 million after-tax headwind for fiscal 2022.”
General Mills Inc. GIS, -0.16% has discussed price increases, and companies like McCormick & Co. MKC, -1.45% and Freshpet Inc. FRPT, +1.06% have talked about the disruptions to production that the pandemic has caused.
P&G reported sales and profit that beat expectations early Wednesday, and narrowed its sales guidance for the year.
“We maintain a Buy rating, viewing PG’s best-in-class supply chain and dominant pricing power as significant competitive advantages during this difficult operating environment,” wrote CFRA’s Arun Sundaram in a post-earnings note.
CFRA raised its 12-month price target by $2 to $178.
“Consistently solid execution, along with a product portfolio that focuses on daily use items and a growth strategy that is centered around innovation, should equate to strong and reliable long-term results.”
P&G stock was up 3.7% on Wednesday, and has gained 21.7% over the last 12 months. The Dow Jones Industrial Average DJIA, -0.96% has run up 13.8% for the past year.