P&G is raising prices in September — here's why

Brian Sozzi
·Editor-at-Large
·1-min read

P&G (PG) says it's time to raise prices in order to help offset commodities inflation, in part driven by building economic recoveries globally from the depths of the COVID-19 pandemic.

The company said in its fiscal third quarter earnings release on Tuesday it would begin to hike prices on baby care, feminine care and adult incontinence products in the United States. Price increases will range from mid- to high-single digit percentages. The hikes will go into effect in mid-September. 

P&G rival Kimberly-Clark (KMB) recently announced price increases across its product portfolio due to commodities inflation. 

P&G Vice Chairman and COO Jon Moeller tells Yahoo Finance Live the price increases will have a neutral impact to earnings.

The price increases follow another better than expected quarter from P&G as households did more laundry loads at home and sought out ways to improve their personal hygiene amidst the pandemic. Here is how P&G performed in the quarter compared to Wall Street estimates. 

  • Net Sales: $18.1 billion vs. $17.97 billion

  • Diluted EPS: $1.26 vs. $1.19

P&G reiterated its full-fiscal year financial guidance. 

The company forecast organic sales growth of 5% to 6%. Earnings are seen increasing 8% to 10% from the prior year. 

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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