On January 22, a P&G executive announced that the company plans to raise prices on its household products due to the new tariffs set by the government. Andre Schulten, Chief Financial Officer of P&G said, “Whatever the administration decides to do, we will be able to deal with.” He said that the company will first try to manage tariffs by cost-cutting internally. However, if cost-cutting doesn’t set off tariffs then P&G will hike the prices of household products.
Procter & Gamble released earnings report for Q2 of fiscal year 2025, beating analysts expectations. The company’s share price also rose by 3% on Wednesday following the earnings report. P&G had better sales in two of its largest markets, the US and China, leading to an increased sales volume in the quarter on December 31.
P&G Plans Price Hike
P&G has hiked prices multiple times in recent years due to rising fuel and labor costs. With new tariffs proposed by the US government, possibly targeting Mexico and Canada, these costs could go up even more. “It’s still a risk,” said Michael Ashley Schulman, chief investment officer at Running Point Capital, a P&G investor. “It’s tough to predict how much of that tariff they can pass on to consumers.”
In the past four years, the company revamped its Gillette razor blade supply chain, a change that could help protect its margins from new tariffs. Schulten said P&G also has “formulation flexibility,” allowing it to change product ingredients if they become too costly or hard to get because of tariffs.
Procter & Gamble Earnings Report
P&G reported a fiscal second-quarter net income of $4.63 billion, or $1.88 per share, up from $3.47 billion, or $1.40 per share, last year. Net sales grew by 2% to $21.88 billion. The company’s organic revenue, which excludes currency changes and divestments, rose 3% in the quarter, driven by better performance in China. Organic sales in China were down only 3%, compared to a 15% drop last quarter.
P&G’s volume increased by 1% during the period, despite challenges like the U.S. port strike, Hurricane Milton, and a two-week shutdown of its global transportation system. Volume excludes pricing, making it a clearer measure of demand than sales.
Procter & Gamble Stock Update
P&G’s stock price jumped 3.1% the day its earnings were released, thanks to strong financial results. The company posted a 3% increase in organic sales and earnings per share (EPS) of $1.88, beating the expected $1.86 by $0.02. This positive momentum carried on into the next trading sessions, pushing the stock even higher.
