Household goods giant Procter & Gamble will be raising prices and cutting costs to mitigate the impact of tariffs.
Announcing P&G’s financial results for the three-month period ending 31 March 2025 CFO the Pampers, Bounty and Febreze company cut its annual outlook to zero as it posted lower-than-expected sales for the quarter following the US-China trade war sparked by the tariffs.
A 2% year-on-year net sales decline to $19.8bn saw the business fall short of its predicted Q3 net sales by $300m. The revised annual outlook now means P&G expects total net sales for 2025 to be ”approximately” in line with last year, compared with its previous target of 2% to 4% growth.
CFO Andre Schulten said the business would “have to pull every lever we have in our arsenal to mitigate the impact of tariffs within our cost structure and P&L”.
Price increases and cost-cutting were the most likely options, but he did not rule out changing product formulations or sourcing raw material from outside China.
Overall sales decline, with volumes down 1%, was also partly attributed to a drop in demand due to “a more nervous consumer”. This drop was only marginally offset by higher pricing, which saw organic sales grow by a “modest” 1%.
Only P&G’s grooming division reported volume growth in the quarter, up by 1%. Its baby, feminine and family care segment, which includes Pampers, saw the largest volume drop at 2% over the same period.
Volumes for the healthcare and fabric & homecare divisions fell fall 1%, while demand for oral care products, including the Oral-B brand, also dropped during the quarter. Beauty remained largely flat, with skincare volume declines partially offset by increased pricing, primarily in Greater China.
President and CEO Jon Moeller said P&G had made ”appropriate adjustments to [its] near-term outlook”, reflecting market conditions, which he characterised as a ”challenging and volatile consumer and geopolitical environment”.
Moeller also warned of “likely” price increases in the next fiscal year, but said he remained “confident” in P&G’s longer-term growth and spoke of continued investment in innovation to “improve products and drive category growth”.
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