Procter & Gamble Warns of Greater Prices and Slower Gross sales

The outcomes come a day after P&> PG 1.97% introduced that David Taylor would step down in November as chief government after a six-year run. He can be changed by prime deputy Jon Moeller, who has been P&>’s chief working officer for the previous two years and was beforehand its finance chief.

“Commodities and value stress have escalated considerably,” Mr. Taylor stated in an interview. “You might have a troublesome exterior atmosphere and a pandemic that’s raging; many components of the world are on the worst they’ve ever been.”

P&> expects to take a $1.9 billion after-tax hit on increased freight and commodity prices and predicts gross sales progress to gradual by half for the fiscal 12 months that started July 1. Rival Unilever PLC stated final week it was grappling with increased prices for components, packaging and transportation, which might probably decrease its full-year profitability.

P&> stated earlier this 12 months that it deliberate worth will increase beginning in September to assist offset rising prices. Different makers of family staples and shopper items have additionally unveiled plans to boost costs on all the things from bottled water to paper towels.

P&> can be taking steps to chop again on delivery prices, finance chief Andre Schulten stated in an interview. To offset freight and transportation bills, P&> is permitting some on-line retailers to make use of its warehouses as distribution facilities, he stated. In some instances, the corporate is delivery items on to retailers, bypassing P&> services that kind and reload cargo in service of delivering the optimum mixture of merchandise to retailers, significantly with cumbersome merchandise reminiscent of paper towels and bathroom paper.

P&> stated natural gross sales, a measure that strips out offers and foreign money strikes, elevated 4% within the quarter ended June 30, and 6% for the fiscal 12 months that additionally led to June. That follows a 6% gross sales acquire within the prior fiscal 12 months, which was P&>’s greatest acquire in additional than a decade.

Through the newest quarter, P&>’s web gross sales rose 7% to $18.94 billion, above the consensus forecast of $18.37 billion from analysts polled by FactSet. Core earnings per share fell 3% from a 12 months in the past to $1.13.

For fiscal 2022, the corporate predicts web and natural gross sales progress of two% to 4%, in contrast with the earlier fiscal 12 months’s 6% natural progress. It predicts core earnings-per-share progress of three% to six% relative to the earlier fiscal 12 months’s $5.66.

P&> notched substantial gross sales positive factors amid the pandemic however has skilled much less dramatic gross sales swings in contrast with rivals. Kimberly-Clark Corp. and Clorox Co. , with product lineups extra targeted in cleansing and residential care, had large positive factors final 12 months and losses extra just lately as consumers stopped stockpiling bathroom paper and cleansing merchandise.

Kimberly-Clark, maker of Cottonelle bathroom paper and Scott paper towels, final week reported its second-straight quarterly gross sales decline. Clorox reported a 1% gross sales drop within the 12 months’s first quarter, following three straight intervals of positive factors above 20%. The corporate is predicted to submit one other decline when it stories quarterly gross sales subsequent week.

In its newest quarter, P&> logged slower progress in its home-care unit, which incorporates Daybreak cleaning soap, Swiffer ground cleaners and Microban disinfectants. That sluggishness was offset by increased gross sales of merchandise much less tied to the pandemic, reminiscent of Crest toothpaste, Gillette razors and SK-II, a line of high-end skin-care merchandise driving outsize progress.

Write to Sharon Terlep at sharon.terlep@wsj.com