Multinational consumer product manufacturer Procter & Gamble (P&G) reported fourth-quarter earnings of $0.94 per share, beating Wall Street analysts' expectations of $0.90.
But, despite its success, P&G's revenue was a reported $16.5bn, falling short of Thomson Reuters forecast of $16.54bn. Additionally, P&G reported a net income of $1.89bn for the quarter, or $0.73 a share, which was down 14% from $2.22bn, or $0.84 a share, in same quarter in 2017.
CNN has reported that the disappointing results are because "shipping costs have spiked as demand for goods accelerates and the US faces a shortage of truck drivers". This, in addition to the market prices for hardwood and softwood pulp rising 60% and 20%, respectively, has added strain to P&G's pricing structure.
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"I do want to be very open about it – we expect the competitive environment to stay very heavy for a while," saidP&G CEO David Taylor. "We're going to address in each market online or offline what it takes to grow, because we clearly have the superior products."
P&G has since announced a price hike to counteract the poor sales, and has announced it is in the process of raising Pampers' prices by 4%, while retailers have been notified that Bounty, Chairman and Puffs would see an increase of 5%. This has followed the news of several US-based food manufacturers also raising their prices, including Coke, Hershey and Boston Beer.
P&G representatives have acknowledged the danger of price increases. "There is uncertainty and will be volatility with these pricing moves. They will negatively impact consumption. We'll have to adjust as we go, and as we learn," said P&G CFO Jon Moeller.
Despite the reports, P&G said it was anticipating organic sales growth of 2–3% for the 2019 fiscal year, anticipating its core earnings per share to grow 3–8%, up from its 2018 core EPS of $4.22.