Double-Digit Price Increases Bolster Profits at Procter & Gamble

Another round of price increases on household products like Gillette razors, Dawn dish soap and Swiffer dusters helped bolster Procter & Gamble’s bottom line last quarter, it said on Friday, a sign that stubborn inflation may linger as companies defend their profit margins.

Procter & Gamble, a consumer goods bellwether, said that its profit grew in the first three months of the year after it raised prices 10 percent across its brands, the second consecutive quarterly double-digit increase. The company’s profit margin expanded in the quarter, with price increases more than offsetting the rise in what it paid for raw materials.

Revenue rose 4 percent last quarter versus the year before, even as sales volumes — the number of rolls of Charmin toilet paper and boxes of Tide detergent — fell by 3 percent, as consumers traded down to less expensive alternatives or bought less. In other words, Procter & Gamble made more money even though it sold fewer products. Sales volumes at the company have declined for the past four quarters.

Jon Moeller, Procter & Gamble’s chief executive, said in a statement that the company delivered strong results “in what continues to be a very difficult cost and operating environment.”

The consumer products giant also raised its forecast for revenue this fiscal year to an increase of 1 percent over the previous year, from a decline of up to 1 percent. And it said it planned to buy back up to $8 billion in its own stock in its current fiscal year, which ends in June.

Americans have continued to spend in recent months even as companies pass along higher prices, but there are signs that consumers are starting to pull back: U.S. retail sales declined 1 percent in March from the previous month.

Inflation overall has moderated, climbing 5 percent in the year through March, down from a peak of near 9 percent last summer. The deceleration has been prolonged and uneven, in part because companies find they can maintain higher prices, especially by pitching their offerings as premium products. This has complicated the Federal Reserve’s efforts to tame rising prices by cooling the economy via increasing interest rates.

Executives at Procter & Gamble said on a call with analysts there were still challenges ahead, including the inflation it faces, like higher operating costs and wage increases.

There are “many headwinds that we’re working against and will continue to work against as we move forward,” Mr. Moeller said.

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