Procter & Gamble on Tuesday said it will raise prices on some products sold in the U.S. as it deals with uncertainty over tariffs and also undergoes a leadership transition.
Economic volatility and "consumer anxiety" related to President Donald Trump's tariff policies and immigration crackdown have led consumers to rein in their spending to provide a buffer in their budget, the company's executives told analysts on a post-earnings call.
P&G said it plans to raise prices on about a quarter of its products in the U.S. in the single-digit range starting this month.
The company said that the strength of its pantry staples like Charmin toilet paper and Dawn dish soap, as well as demand for new products like the Tide Evo laundry detergent tile, have given it room to raise prices to offset about $1 billion in cost increases associated with tariffs.
Procter & Gamble indicated it plans to raise prices on about a quarter of its products to handle $1 billion in tariff costs. (Brendan McDermid/Reuters / Reuters)
"We believe that customers will still pay up for these products," said Kim Forrest, chief investment officer at Bokeh Capital Partners. "During soft economic times, consumers made trade down but P&G has many products that people are willing to pay up for, regardless of tariffs or a slow economy."
Some imported goods that P&G is paying tariffs on include psyllium fiber from India for use in Metamucil, along with oils sourced from tropical regions, a company spokesperson said in a report by Reuters.
P&G said that it's also trying to drive growth in areas where it has lost ground, including its Luvs value-priced diapers and Olay skincare, said CFO Andre Schulten.
"The consumer clearly is more selective in terms of shopping behavior in our categories and we see a desire to find value either by going into larger pack sizes in the club channel or online or big-box retailers or by lowering the cash outlay," Schulten said.
Tariffs are taxes on imported goods that are paid by importers, who often pass the higher costs on to consumers through higher prices. (Spencer Platt/Getty Images / Getty Images)
The company's annual forecasts were below analysts' estimates, projecting net sales growth between 1% and 5%, which was below analysts' estimate of 3.09% growth, according to data compiled by LSEG.
"There is a level of baseline uncertainty that we reflect in the guidance range," said outgoing CEO Jon Moeller. "To the extent that people are frustrated with the lack of certainty, and the breadth of the range, trust me, there's no one more frustrated with that than I."
Proctor & Gamble on Monday named company insider Shailesh Jejurikar as its new CEO.
Reuters contributed to this report.