Procter & Gamble said Friday it will boost prices 5 to 10 percent on household products like Crest toothpaste, Dawn dish soap and Old Spice deodorants to combat rising commodity prices and increased pressure from foreign exchange.
The move came as the Cincinnati-based consumer giant reported its strongest quarter in five years as consumers snapped up products from Tide detergent to Pampers diapers. P&G said organic sales rose a robust 4 percent; the closely watched metric excludes the impacts of foreign exchange, divestitures or acquisitions.
Chief financial officer Jon Moeller hesitated calling the quarter's results a "breakout," but said the solid numbers were welcome after P&G's long and continuing turnaround efforts.
P&G reported a $3.2 billion profit for the quarter ended Sept. 30 – up 12 percent from the same period a year ago. Total sales were $16.7 billion, virtually unchanged from the same period a year ago. The results beat Wall Street forecasts.
P&G sales volume surged 3 percent, although currency rates erased the increase.
Still, Moeller cautioned investors from breaking out the champagne – he said the company would need to boost prices to recoup lost profit margin from commodities and currency woes.
"It's clearly a very strong... satisfying quarter," Moeller said. P&G last reported a 4 percent gain in organic sales in the same quarter in 2013. "We have informed retailers that we will increase prices on several products in home care (including dish detergents), oral care (toothpaste) and personal care (deodorants)… early next calendar year."
Moeller added higher prices will complicate P&G's drive to boost sales, saying "There will be volatility with these pricing moves."