Procter & Gamble executives repeatedly credited price hikes for driving sales growth

Procter & Gamble CFO credited hiking prices for higher sales: “Organic sales grew 7%, pricing added nine points to sales growth and mix was up one point.” “Andre Schulten — Chief Financial Officer: Moving to the first quarter numbers. Organic sales grew 7%, pricing added nine points to sales growth and mix was up one point. Volume declined three points, primarily due to lower shipments in Russia. Growth was broad-based across business units with each of our 10 product categories organic sales.” (Procter & Gamble Q1 2023 Earnings Call, 10/20/2022)

P&G’s CFO: “the strategy of irresistible superiority works even in an inflationary environment, where we need to take pricing.” “Andre Schulten — Chief Financial Officer: Good Morning, Lauren. Yeah, as you stated in your question, we’re seeing global value share and value share in the U.S. holding, which is a great signal to our strategies working of providing value to consumers via innovation, as we price contribution of 9% on the quarter, with volume being down 3%, but the majority of that volume, so more than two points actually driven by Russia. Also is a good indication that the strategy of irresistible superiority works even in an inflationary environment, where we need to take pricing.” (Procter & Gamble Q1 2023 Earnings Call, 10/20/2022)

P&G’s CFO: “, we feel very encouraged by the fact that we were able to realize 9% of pricing in organic sales growth and effectively only see about a point of reduction in volume, which speaks to favorable elasticities.” “Andre Schulten — Chief Financial Officer: In terms of volume elasticity in my earlier remarks, as I said, we feel very encouraged by the fact that we were able to realize 9% of pricing in organic sales growth and effectively only see about a point of reduction in volume, which speaks to favorable elasticities, speaks to our superiority strategy working and providing consumers value with innovation even as we take pricing. As we always do, we assume that these elasticities return to historical levels over time. But certainly, the first quarter is a good indication. It gives us confidence that the approach we’ve taken around the world in terms of combining pricing with innovation and productivity in order to offset the cost is the right approach.” (Procter & Gamble Q1 2023 Earnings Call, 10/20/2022)

P&G’s CFO: “We took pricing on all our categories in the last fiscal year covering about 80% of sales. We’re now in the second round covering about 85% of sales and that’s what we see flowing through in the first quarter.” “Andre Schulten — Chief Financial Officer: Yeah. Good morning, Brian. I can’t speculate or give you an answer on future pricing. We adjust in the execution of the second pricing round for many of our brands. We took pricing on all our categories in the last fiscal year covering about 80% of sales. We’re now in the second round covering about 85% of sales and that’s what we see flowing through in the first quarter. Many of these price increases in the second round are being executed in September and October. For the future, we will continue to observe where our cost headwinds go, where foreign exchange rate goes. It’s a very dynamic environment. We will continue to carefully balance innovation, pricing and productivity.” (Procter & Gamble Q1 2023 Earnings Call, 10/20/2022)

P&G told analysts “We continue to believe that the majority of that growth will be price driven with a negative volume component, as you would expect given the inflationary pressure.” “Andre Schulten — Chief Financial Officer: Yeah. Kevin, we expect a slowdown from the growth rate we’ve seen over the past years, which was 5% to a more modest 3% to 4%. That is still the case. We continue to believe that the majority of that growth will be price driven with a negative volume component, as you would expect given the inflationary pressure. We don’t have more detail by region at this point in time, and it’s really not a constructive forecast exercise to try to bring this down into a lower level of detail. So 3% to 4%, still underlying our forecast. We want to grow slightly ahead of that, which is reflected in our guidance range.” (Procter & Gamble Q1 2023 Earnings Call, 10/20/2022)

P&G’s CFO: “We continue to see strong contribution from pricing, obviously, and the combination of us taking pricing, but driving innovation is priority at the same time, allows us to drive strong organic sales growth.” “Andre Schulten — Chief Financial Officer: Yeah. And to start with the U.S., we see strong growth in non-covered markets. That’s explaining the overall stronger growth. So just looking at the covered market here is maybe not reflecting the full reality that we’ve seen in the first quarter. So broader growth in the U.S. higher than what we’ve seen in just the covered markets. On the enterprise market side, same dynamic as in the rest of the world. We continue to see strong contribution from pricing, obviously, and the combination of us taking pricing, but driving innovation is priority at the same time, allows us to drive strong organic sales growth.” (Procter & Gamble Q1 2023 Earnings Call, 10/20/2022)

Procter & Gamble detailed their price hikes by product type in their investor presentation. (Procter & Gamble Q1 2023 Earnings Call Presentation)

Procter & Gamble said their “strong results” were driven primarily by price hikes even as sales volumes decline

Procter & Gamble’s CFO said the companies sales had increased 7%, driven by price hikes as volume actually decreased.“ANDRE SCHULTEN, CFO, THE PROCTER & GAMBLE COMPANY: Moving to the April-June quarter. Organic sales grew 7%. Pricing contributed 8 points to organic sales growth as additional price increases reached the market. Mix was flat and volume declined 1 point, which is due to reduced operations in Russia. Volume for the balance of the business excluding Russia was up 1 point. These strong company results are grounded in broad-based category and geographic strength.” (Procter & Gamble Q4 2022 Earnings Call, 7/29/2022)

Procter & Gamble predicted a “strong price contribution” to growing sales even with “modest decreases in unit volume.” “ANDRE SCHULTEN, CFO, THE PROCTER & GAMBLE COMPANY: : We expect global market value growth in our categories to moderate back towards a range of around 3% to 4% with strong price contribution, offset by modest decreases in unit volume. With the strength of our brands and commitment to keep investing in the business, we continue to expect to grow at or above underlying market levels, building aggregate market share globally. This leads to guidance for organic sales growth in the range of 3% to 5% for the fiscal ’23.” (Procter & Gamble Q4 2022 Earnings Call, 7/29/2022)

Procter & Gamble’s CFO: “we expect pricing to be the main driver in that market growth with volumes slightly down. That is a logical consequence of the broad-based pricing that we are seeing in the market.”“ANDRE SCHULTEN: Yes. Thanks, Dara. You’re right. Our top line guidance is, as always, grounded in what we expect in the marketplace. We see moderation — or we expect moderation in the overall value growth in the market from the 5% we had over the past 12 months back to 3% to 4%. And we expect pricing to be the main driver in that market growth with volumes slightly down. That is a logical consequence of the broad-based pricing that we are seeing in the market, assuming there will be elasticity. We’ve seen elasticity, albeit better than expected based on historical levels, but we’re seeing elasticity in the market, and that’s reflected in our market growth assumption.” (Procter & Gamble Q4 2022 Earnings Call, 7/29/2022)

Procter & Gamble told analysts that consumers were responding well to price hikes, noting they “don’t deselect” their “daily use” products

Procter & Gamble’s CEO: “we’ll continue to offset a portion of the cost impacts with price increases… So far, elasticities in most categories where we’ve taken price increases have been better than our historical experience.”“JON R. MOELLER, PRESIDENT, CEO & CHAIRMAN OF THE BOARD, THE PROCTER & GAMBLE COMPANY: We’re committed to keep investing to strengthen the superiority of our brands across innovation, supply chains and brand equity to deliver superior value for consumers in every price tier in which we compete. Alongside our productivity work, we’ll continue to offset a portion of the cost impacts with price increases. Whenever possible, we’ll close a couple of those price increases with innovation. Those moves will be tailored to the market, category and brand. As consumers face increased pressure on nearly every aspect of their household budgets, we invest to deliver truly superior value in combination of price and product performance to earn their loyalty every day. So far, elasticities in most categories where we’ve taken price increases have been better than our historical experience.” (Procter & Gamble Q4 2022 Earnings Call, 7/29/2022)

Procter & Gamble’s CFO noted that even with price hikes, “our categories being daily-use categories that consumers don’t deselect even when they see high levels of inflation.”“ANDRE SCHULTEN: We have full confidence in our ability to compete in this environment. Our categories being daily-use categories that consumers don’t deselect even when they see high levels of inflation, our focus on Irresistible Superiority, our ability to make strong value claims based on that superiority, the breadth of our portfolio across the price letter and value tiers and across channels positions us well to compete in the environment. And most importantly, the strength in our innovation portfolio and the runway we have in driving household penetration and trade-up within the portfolio has us focused really on driving market growth. And that inherently drives share growth for us. That’s part of our assumption to market size and relative share growth.” (Procter & Gamble Q4 2022 Earnings Call, 7/29/2022)

Procter & Gamble’s CFO: “The reaction to those price increases from a retailer environment is what you would expect. Nobody is pleased about the continued inflationary trends that we’re seeing, but it remains a constructive discussion.” “ANDRE SCHULTEN: The reaction to those price increases from a retailer environment is what you would expect. Nobody is pleased about the continued inflationary trends that we’re seeing, but it remains a constructive discussion on how to best execute what we need, both from a retailer standpoint and from a manufacturer standpoint, which is recovery of inflationary cost measures to the extent that cannot be covered by productivity. In terms of our ability to offset the latest inflationary trends across commodities and transportation, pricing is part of that. But the pricing we’re taking is not covering the entire breadth of increases that we’re seeing. That needs to be a combined effort between pricing, innovation and driving trade-up via innovation and productivity. But we feel good about every part of that equation. Our innovation portfolio is stronger than ever. Our productivity muscle is strong, and pricing dynamics and conversations remain productive.” (Procter & Gamble Q4 2022 Earnings Call, 7/29/2022)

Procter & Gamble said more price hikes were on the way and predicted the company would be able to “hold prices”

Procter & Gamble told analysts further price hikes were coming in August and September, “across most categories in the U.S.” “ANDRE SCHULTEN: The increases we’re taking, and we’ve announced in June, July, are going into effect broadly in this quarter, July, August, September, towards the latter half of it. They are across most categories in the U.S. And we also announced pricing globally in the same ballpark, mid-single digits, but very differentiated. So in general, I would tell you, mid-singles — probably mid- to high singles, but really tailored by country, by brand, by SKU to ensure that we do what I just described retailers are looking for, provide the best value for their relevant shoppers in terms of absolute price point, product performance and value tier..” (Procter & Gamble Q4 2022 Earnings Call, 7/29/2022)

Procter & Gamble refused to comment if further price hikes would come beyond what was announced.“ANDRE SCHULTEN: On pricing, my answer is going to be quick. What’s announced is announced, and everything else we can’t talk about. But it’s going to be a combination of pricing, productivity and innovation. That’s as much as I can tell you. And we’re always evaluating pricing and the necessity for pricing in every market every day. So that’s an ongoing discussion. In terms of innovation, fundamentally, our innovation pipeline looks out 5 years, 10 years. The innovation pipeline continues to be strong. It continues to drive superiority across the full portfolio because that’s the definition of superiority. It’s not just the premium end, and that doesn’t really change.” (Procter & Gamble Q4 2022 Earnings Call, 7/29/2022)

Procter & Gamble’s CEO noted that private label price increases “are even higher in some cases than our own price increases,” suggesting it would help “the ability to hold prices.” “JON R. MOELLER: Just one additional point, Rob, the — relative to the competitive environment. We’re seeing price increases on private label brands and on mid-tier offerings that are even higher in some cases than our own price increases. I just offer that perspective as it relates to the ability to hold pricing and then — and what it might mean for market share. As Andre said, it’s a fairly constructive environment.” (Procter & Gamble Q4 2022 Earnings Call, 7/29/2022)

Procter and Gamble paid shareholders $3.5 billion in the last quarter

Procter & Gamble reported it had funneled $3.5 billion to shareholders in the past quarter alone, calling it a “strong performance in very difficult operating conditions.” “ANDRE SCHULTEN: Core operating margin decreased 30 basis points as gross margin pressure were largely offset by sales leverage and productivity improvements in SG&A. Currency-neutral operating margin increased 20 basis points. Free cash flow productivity was 99%. We returned $3.5 billion of cash to shareowners this quarter, nearly $2.3 billion in dividends and nearly ($1.3 billion) in share repurchase.In summary, we met or exceeded each of our going-in target ranges for the year: organic sales growth, core EPS growth, free cash flow productivity and cash return to shareowners. Strong performance in very difficult operating conditions.” (Procter & Gamble Q4 2022 Earnings Call, 7/29/2022)

Procter & Gamble credited price increases for higher revenues and sales, allowing for even more money to be funneled to shareholders

Procter & Gamble reported that price increases for its products drove revenue 6% higher from the previous year and predicted more price increases to come. “Shoppers shrugged off rising prices last year on products like Pampers diapers and Charmin toilet paper, Procter & Gamble said on Wednesday in announcing a jump in its second-quarter earnings. The consumer goods giant reported that price increases for products like Crest toothpaste and Tide detergent helped drive revenue 6 percent higher from a year earlier, to $21 billion, in the three months that ended Dec. 31. Earnings rose 9 percent to $4.2 billion in the quarter. Shares of Procter & Gamble rose 4.6 percent in midday trading to $163.98. The company added that it expected more price increases throughout the year, starting in February on fabric care products like Gain, Bounce, and Downy. Prices for personal care products will go up beginning in April.” (New York Times, 1/19/2022)

Despite record inflation, Procter & Gamble raised its sales outlook for the year on the back of higher prices. “December saw the biggest 12-month gain in inflation since 1982. On Wednesday, Procter & Gamble Co. raised its sales outlook for the year to the end of June on the back of higher prices. In the three months to Dec. 31, organic sales (which exclude the impact of currency movements, acquisitions, and disposals) rose 6%. This was split equally between volume gains and price increases. The company, which owns brands including Pampers diapers and Gillette razors, also lifted its forecast of full-year organic sales growth from 2-4% to 4-5%. The shares rose about 4% in early trading. (Bloomberg, 1/19/2022)

Procter & Gamble increased their plans to send more cash to shareholders, planning on. $17-18 billion in stock buybacks and dividends over the course of the fiscal year. “Andre Schulten — Chief Financial Officer: We are increasing our outlook for adjusted free cash flow productivity to 95%, and we are raising our guidance for cash return to shareowners. We continue to expect to pay over $8 billion in dividends, and we now plan to repurchase $9 billion to $10 billion of common stock, combined with a plan to return $17 billion to $18 billion of cash to shareowners this fiscal year. This outlook is based on current market growth rate estimates, commodity prices, and foreign exchange rates. Significant additional currency weakness, commodity cost increases, geopolitical disruption, major supply chain disruptions, or store closures are not anticipated within the guidance ranges.” (Procter & Gamble Earnings Call, 1/19/2022)

The company predicted broad price increases on its products throughout 2022

On Procter & Gamble’s earnings call, the company’s CFO said “we are thoughtfully executing tailored price increases. “Andre Schulten — Chief Financial Officer: Building on the strength of our brands, we are thoughtfully executing tailored price increases. We closed a couple of price increases with innovation to improve consumer value along the way. The strategic need for investment to continue to strengthen the superiority of our brands, the short-term need to manage through this challenging cost environment, and the ongoing need to drive balanced top and bottom-line growth, including margin expansion underscore the importance of ongoing productivity.” (Procter & Gamble Earnings Call, 1/19/2022)

Procter & Gamble’s CFO announced price increases in all 10 product categories: “Baby Care, Feminine Care, Adult Incontinence, Family Care, Home Care, Hair Care, Grooming, Oral Care, Skincare” “Andre Schulten — Chief Financial Officer: Foreign exchange rate have also moved against us since our last guidance. We now expect FX to be a $200 million after-tax headwind to earnings for the fiscal year. We will offset a portion of these cost pressures with price increases and with productivity savings. We’ve now announced price increases in each of our 10 product categories in the U.S., increases in Baby Care, Feminine Care, Adult Incontinence, Family Care, Home Care, Hair Care, Grooming, Oral Care, Skincare are now effective in the market. We also increased prices on mid-tier liquid detergents and powder detergents over the last few months. In mid-December, we announced to retailers that effective February 28 we are increasing pricing on the balance of our Fabric Care portfolio. This includes Tide, Gain, Downy, Bounce, and Unstopables and includes all forms: liquid and unit-dose detergents, scent beads, liquid fabric softeners, and dryer sheets. Just yesterday, we announced to retailers that we are increasing pricing on certain Personal Health Care brands in the U.S. effective mid-April. The degree and timing of these moves are very specific to the category, brand, and sometimes the product from within a brand. This is not a one-size-fits-all approach.” (Procter & Gamble Earnings Call, 1/19/2022)

Procter & Gamble’s CFO said a “majority of the price increases are still coming into effect” and would continue to benefit Procter & Gamble’s margins throughout 2022. “Andre Schulten — Chief Financial Officer: Good morning, Steve. All right. So from a gross margin perspective, a couple of things will come to play here. If you assume that the existing commodity foreign-exchange rate and transportation and warehousing pressures remain at this level, which is our basis for planning, we will benefit from more pricing flowing through the P&L. Most of our price increases, as you’ve seen in our prepared remarks, have gone or some have gone into effect in September and October, but the majority of the price increases are still coming into effect over December, Q1, Q3, and Q4. So the contribution of pricing both to the gross margin recovery as well as to the price mix line within the top line is going to increase sequentially as we go through the fiscal year.”  (Procter & Gamble Earnings Call, 1/19/2022)

Procter & Gamble repeatedly stressed that consumers were not being deterred by price increases

Procter & Gamble told analysts that consumers were reacting favorably to price increases and trading up for more premium products. “Consumers clearly aren’t balking at having to pay more for their groceries. In fact, P&G said that so far, they were reacting to price increases more favorably than in the past. Instead of pulling in the purse strings, consumers are trading up. For example, in its Oral-B business, more Americans are opting for more expensive teeth whitening options. In diapers, more parents are choosing premium ranges.” (Bloomberg, 1/19/2022) 

Procter & Gamble’s CFO called price increases sustainable as consumer reaction was“benign” and “price elasticity has generally been lower than what we would have seen historically.” “Andre Schulten — Chief Financial Officer: In the pricing contribution versus volume contribution, I expect the price to become a bigger part, as I said, logically because of the timing of the price increases that we have announced. And in terms of the ability to sustain the pricing, for the price increases where we have sufficient read period at this point in time, we have seen a more benign reaction of the consumer. The consumer is healthy generally and is preferring our brands. We’re starting with strong superiority, and price elasticity has generally been lower than what we would have seen historically, which also speaks to the fact that we hope will continue to see volume growth in combination with stronger price growth in the back half.” (Procter & Gamble Earnings Call, 1/19/2022)

Procter & Gamble’s CFO stressed, “we see a lower reaction from the consumer in terms of price elasticity than what we would have seen in the past.” “Andre Schulten — Chief Financial Officer: I’ll start by saying the consumer continues to favor our brands. Our categories, again, daily-use essential needs of the consumer and health, hygiene, and cleaning, and the efficacy of our products and brands really helps us with superiority that we can provide to trade the consumer up within our portfolio. And as we take pricing, we see a lower reaction from the consumer in terms of price elasticity than what we would have seen in the past to give you some concrete data. In the U.S. we see on those brands where we’ve taken pricing in September and October which are normally highly-priced elastic, we’ve seen price elasticity in the range of 20% to 30% lower than what we would have expected based on historic data. So we take comfort in the strength of our brands, the broad-based growth of the portfolio globally, the broad-based growth of the portfolio across categories, and the short term reaction of the consumer as we take pricing, and our ability to combine that pricing with innovation which actually then stimulates the consumer to trade-up in everything that we’ve seen.” (Procter & Gamble Earnings Call, 1/19/2022)

Procter & Gamble unintentionally showed how its diaper duopoly allowed the company to exploit price increases for consumers at every level

Procter & Gamble’s CFO said the company had “strong price ladders,” and explained how the company’s control over diapers allowed it to benefit from price increases at every level. “Andre Schulten — Chief Financial Officer: Secondly, starting with a portfolio that is 75% superior by our assessment and reflected probably in the market share results and trends that we’re seeing, we also over time have built much stronger price ladders. So we have offerings for the consumer at different price points and different cash outlays. When you think about diapers, you can get a large diaper for $0.15 a diaper, Swaddlers at $0.30 or a Pure diaper at $0.38, and that’s generally true across all categories, across all brands. So that means the consumer has a choice within our portfolio. So in that sense, I think we are set up well from a starting point to deal with inflation and related pricing.” (Procter & Gamble Earnings Call, 1/19/2022)

Procter & Gamble and Kimberly-Clark control 70% of the US diapers market. “On top of that, diapers are taxed in 36 states anywhere between 2.5% and 7%, according to the National Diaper Bank Network, an advocacy group. A diaper duopoly makes the impact almost inescapable. The world’s most popular brands — Huggies, Luvs, Pampers, and Pull-Ups — are all made by Kimberly-Clark Corp. and Procter & Gamble Co. Those companies account for 70% of the U.S. diaper market and they are protecting their margins as the cost of raw materials soars.” (Bloomberg, 7/9/2021)

July 2021: The average unit price of diapers was 14% the previous year. “The average unit price of diapers was up 14% year over year in January and has remained elevated ever since, according to data from Nielsen. Packages that cost about $25 last year now can cost $40 — and there are fewer inside. Indeed, baby-care items from rash salves to wipes have seen double-digit increases, and companies have said prices will rise again.” (Bloomberg, 7/9/2021)

Procter & Gamble’s CEO called pricing “an inherent part of our business model”

Procter & Gamble’s CEO said one explanation for the pricing situation is “there’s no doubt at present that demand is stronger than supply.“ “Jon R. Moeller — President and Chief Executive Officer: But directionally, Nik, which is what leads you to your question, there’s no doubt at present that demand is stronger than supply. Andre is absolutely right. I don’t know how to quantify it either. But as we address some of the opportunities, and that’s how I view it, within the supply community, there should be an upside beyond our internal forecast and what you might expect. That’s assuming of course that that demand continues at current levels.” (Procter & Gamble Earnings Call, 1/19/2022)

Procter & Gamble’s CEO: “Remember, pricing is an inherent part of our business model…So while the level of pricing we’re talking about here, to be fair, is typically a different level, this is not a dynamic that we’re unfamiliar with.“ “Jon R. Moeller — President and Chief Executive Officer: So I just have a couple closing comments. One on pricing. Remember, pricing is an inherent part of our business model. As an innovation-centered company, we aim to create products that address better everyday consumer needs and problems and can typically command some pricing while increasing the overall value of proposition to consumers with those more efficacious offerings. Pricing has been a positive component of our top line for 42 out of the last 45 quarters and 17 out of the last 18 years. So while the level of pricing we’re talking about here, to be fair, is typically a different level, this is not a dynamic that we’re unfamiliar with. And as Andre said earlier, we certainly have significant historical and recent experience in developing markets. None of that’s a guarantee, but this is not new territory.” (Procter & Gamble Earnings Call, 1/19/2022)

A local TV report showed how small business suffered from corporate price increases

A local news broadcast in Cincinnati featured consumers complaining after Procter & Gamble increased prices citing the need to preserve profits. “P&G said it will raise prices on Tide and Gain laundry detergent, Bounce and Downy softener and personal health items by eight percent. In October, P&G raised prices on baby, family, home and fabric care brands. CEO Jon Moeller said Americans do not seem to mind the higher prices. ‘No, no, I will look for better quality, and do the best I can,’ said Sharon Harris as she shopped in Cincinnati Thursday. ‘I’m going to leave the Tide alone then.’ P&G blamed the price of production and preserving profits.” (WCPO, 1/20/2022)

Procter & Gamble passed some of the blame, saying “pricing at the store shelf is at the sole discretion of the retailer.” “In its statement, P&G said it is working to find cost savings within other areas of its business. ‘And, where we need to pass on some costs, we’re pairing those price increases with innovation wherever possible to continue to deliver great value for our consumers,’ the statement says. ‘What we shared is that consumers continue to favor brands that deliver value. Additionally, pricing at the store shelf is at the sole discretion of the retailer.’” (WCPO, 1/20/2022)

Procter & Gamble announced it would hike prices at the same time it increase stock buybacks buy an additional $1 billion

In April 2021, Procter & Gamble announced it would hike prices in response to higher commodity costs. ”Procter & Gamble announced on Tuesday it will hike prices on baby care, feminine care and adult incontinence products in September to respond to higher commodity costs….P&G said its price increases will vary by brand but will be in the range of mid-to-high single digits. ‘This is one of the bigger increases in commodity costs that we’ve seen over the period of time that I’ve been involved with this, which is a fairly long period of time,’ Chief Operating Officer Jon Moeller told analysts.” (CNBC, 4/20/2021)

In the same release announcing price increases, Procter and Gamble announced it would increase share buybacks for FY 2021 from $10 billion to $11 billion. “P&G expects to pay more than $8 billion in dividends in fiscal 2021. The Company increased its outlook for common stock repurchase from up to $10 billion to approximately $11 billion in fiscal 2021. Combined, P&G now plans to return about $19 billion of cash to shareowners in this fiscal year. The Company added that it has started the process of implementing price increases on its Baby Care, Feminine Care and Adult Incontinence product categories in the United States to offset a portion of the impact of rising commodity costs. P&G said the exact amount of the price increase will vary by brand and sub-brand in the range of mid-to-high single digit percentages and will go into effect in mid-September.” (Procter & Gamble, 4/20/2021) 

In July 2021, Procter & Gamble reported that it paid $19 billion to shareholders for FY 2021, including increasing dividends by 10% to $8 billion.  “David Taylor, Chairman, President and Chief Executive Officer said, ‘We delivered another year of strong results with balanced top and bottom-line growth and strong cash generation, exceeding each of our in-going targets. We built strong momentum prior to the pandemic and have strengthened our position further. As we look forward to fiscal 2022, we expect to continue to grow top-line and bottom-line and to deliver another year of strong cash return to shareholders despite a challenging cost and operating environment.’ Core earnings per share grew 11% for the year. Currency neutral Core EPS was also up 11%. We increased our dividend by 10% during the year and returned $19 billion dollars of value to shareowners – $8 billion in dividends, and $11 billion in share repurchase.” (Procter & Gamble, 7/30/2021) 

Over the course of the pandemic, the pay ratio between Procter & Gamble’s CEO to its median employee increased 

For FY 2019-20, Procter & Gamble reported its CEO’s total compensation was $22.9 million compared to its median employee of $68,883 or a ratio of 333 to 1. “As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. David S. Taylor, our Chairman of the Board, President and Chief Executive Officer. The pay ratio was calculated in a manner consistent with Item 402(u) of Regulation S-K and based upon our reasonable judgment and assumptions. For FY 2019-20, the median of the annual total compensation of all employees of the company (other than our CEO) was $68,883, and the annual total compensation of our CEO was $22,905,128. Based on this information, the ratio of the annual total compensation of Mr. Taylor to the median of the annual total compensation of employees was 333 to 1.” (Procter & Gamble 2020 Proxy Statement, 8/28/2020)

For FY 2020-21, Procter & Gamble reported its CEO’s total compensation increased to $23.9 million compared to its median employee of $69,671 or a ratio of 343 to 1. “As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Taylor, our Chairman of the Board, President and Chief Executive Officer. The pay ratio was calculated in a manner consistent with Item 402(u) of Regulation S-K and based upon our reasonable judgment and assumptions. For FY 2020-21, the median of the annual total compensation of all employees of the company (other than our CEO) was $69,671, and the annual total compensation of our CEO was $23,900,381. Based on this information, the ratio of the annual total compensation of Mr. Taylor to the median of the annual total compensation of employees was 343 to 1.” (Procter & Gamble 2021 Proxy Statement, 8/27/2021) 

In 2018, Procter and Gamble juiced its stock price by announcing price increases it blamed on commodity prices

In Fall 2018, Procter & Gamble announced price hikes on its products from 5 to 10%. “Procter & Gamble Co. intends to raise the prices of more products sold in the United States early next year, chief financial officer Jon Moeller said today. The Cincinnati-based maker of consumer goods such as Dawn dish soap, Crest toothpaste and Old Spice deodorant (NYSE: PG) didn’t disclose specific figures, but the increases will be in the 5 percent to 10 percent range depending on the category or product. Affected will be P&G Home Care products such as dish soap, Oral Care products such as toothpaste and Personal Care products such as deodorants.  The increases are to take effect in the first quarter of 2019.” (Cincinnati Business Courier, 10/19/2018)

Procter & Gamble blamed commodity prices for the 2018 price increase announcement. “‘As commodity prices and foreign exchange rates move, we will take pricing when the degree of cost impact warrants it and competitive realities allow it,” Moeller told market analysts before the stock market opened. ‘There will be volatility with these pricing moves,’ Moeller said. ‘Competition may attempt to take advantage of our moves for short-term market share gains. Overall category consumption may be negatively impacted. We’ll simply have to adjust as we go and as we learn.’” (Cincinnati Business Courier, 10/19/2018)

Procter & Gamble announced the price increases after reporting strong profits and earnings, causing a sharp increase in its stock price. “Procter & Gamble reported better-than-expected quarterly profit and sales, and said it was raising prices on several products around the world, sending shares up on Friday by their most in a decade.” (Reuters, 10/19/2018)

Procter & Gamble told analysts further price increases were coming for feminine products, home care, and oral care

Procter & Gamble’s CFO said the company was “executing tailored price increases.” Andre Schulten, CFO: Building on the strength of our brands, we are thoughtfully executing tailored price increases. We closed a couple of price increases with innovation to improve consumer value along the way. The strategic need for investments to continue to strengthen the superiority of our brands, the short-term need to manage through this challenging cost environment and the ongoing need to drive balanced top and bottom line growth, including margin expansion, underscore the importance of ongoing productivity.” (Procter & Gamble Q3 2022 Earnings Call, 4/20/2022)

Procter & Gamble told investors further prices increases were coming in Feminine Care, US Home Care, and US Oral Care. “Andre Schulten, CFO: Foreign exchange rate has also moved further against us, since our last guidance. We now expect FX to be a $300 million after-tax headwind to earnings for the fiscal year. We are offsetting a portion of these cost pressures with price increases and with productivity savings. In the start of the fiscal year, we’ve taken price increases in each of our 10 product categories in the US. You may recall, it was one year ago, when we announced price increases in the Feminine Care and Baby Care categories. Over the last year, input costs have continued to increase substantially. And as a result, the Feminine Care business has announced an additional price increase in the US, which will be effective in mid-July. Also, as a result of these increased cost headwinds, we recently announced price increases on certain items in the US Home Care category that will be effective at the end of June and in the US Oral Care business that will be effective mid-July.” (Procter & Gamble Q3 2022 Earnings Call, 4/20/2022)

Procter & Gamble stressed that price increases were supporting the company’s ongoing “margin recovery”

According to P&G’s CFO, “Pricing was a sequentially stronger contributor to top line growth in the third quarter and will continue to be a driver again in the fourth quarter as we get the full effect of increases taken over the past few months.” “Andre Schulten, CFO: Moving to key guidance metrics. We now expect organic sales growth in the range of 6% to 7% for the fiscal year, a two-point increase versus our prior guidance of 4% to 5%. Pricing was a sequentially stronger contributor to top line growth in the third quarter and will continue to be a driver again in the fourth quarter as we get the full effect of increases taken over the past few months.” (Procter & Gamble Q3 2022 Earnings Call, 4/20/2022)

P&G’s CFO predicted further benefits from incoming price increases. “Andre Schulten, CFO: Okay. Thanks, Robert. So in terms of pricing run rate for the quarter, on average, we have a five point contribution to top line. As we said, pricing will continue to increase as more of the price increases flow through. So I would say exiting the quarter, I would see about a 6% run rate to top line from pricing contribution. So you will see more of the pricing that has been announced, and that will flow through in April for the flow through in quarter four.” (Procter & Gamble Q3 2022 Earnings Call, 4/20/2022)

P&G’s CFO told analysts said incoming price increases would be a “contribution to the top line and to gross margin recovery over the future.” “Andre Schulten, CFO: We will continue to drive innovation. We have prioritized innovation in our resource and line time allocation to ensure that we can continue to offer superior value to our consumers, which also enables us to take pricing and see these relatively benign elasticities at this point in time. So you continue to see us invest in innovation. With innovation, we will try to take pricing at a very granular level by market, by brand. A lot of the price increases that we have announced are yet to flow through. So you will see an incremental contribution to the top line and to gross margin recovery over the future. The other price increase is already announced, and we will have to carefully evaluate more opportunities to take pricing. It will take time to recover the full dollar impact. And as we said before, it’s more important to us to support the business model, support innovation, support superiority, execute pricing in the right way and recover gross margin and cost impact over time versus rushing to do this faster.” (Procter & Gamble Q3 2022 Earnings Call, 4/20/2022)

Procter & Gamble again noted it benefited from dominating segments like diapers and said it faced less price competition from store brands

P&G’s CFO noted they have “intentionally built price levels in every brand and across brands,” using their dominance of the diaper market as an example. “Andre Schulten, CFO: We have intentionally built price levels in every brand and across brands to ensure that we have offerings for consumers. If they feel they are budget constrained, they can trade within the P&G brand offerings. So on diapers, we have multiple offerings, starting with Pampers Pure at about $0.40 a diaper, Swaddlers at $0.35 a diaper, Baby Dry at $0.30 and Luvs at $0.20. These price ladders exist in all categories and offer the consumer a choice within the P&G portfolio. We are also, which is part of our pricing execution, protecting key price points, key value price points for each offering. So consumers can choose different cash outlays as they shop based on their available cash at the moment of shopping.” (Procter & Gamble Q3 2022 Earnings Call, 4/20/2022)

P&G’s CEO told analysts that because store brands were raising their own prices, P&G’s price increases become “less of an issue for us.“ “Jon Moeller, CEO: Yeah. Our retail partners are also competitors in most cases, with their own label offerings. And because the increases and costs are so significant, they need to be able, in most cases, obviously, entirely at their discretion, but they need to be generally able to raise pricing on their own brands. And when that’s true, that becomes less of an issue, not a non-issue, but less of an issue for us. And I think the biggest change that’s occurred over the last several years in our dialogue has been a more deliberate and overfocus on our part on market growth and on being — and a commitment to be a disproportionate contributor to market growth. At the end of the day, a retail partner doesn’t care what our share is. What they care about is what their sales are and are they growing or not. And we need to be a source of that growth. And when we do that dependably and reliably, as Andre said, it changes the nature of the conversation.” (Procter & Gamble Q3 2022 Earnings Call, 4/20/2022)

P&G’s executive repeatedly emphasized their sales growth was driven by price hikes

P&G’s CFO told analysts that organize sales were up 5% thanks to price increases despite a decline in volume.“Andre Schulten, CFO: Moving to the second quarter numbers. Organic sales grew 5%, pricing at a 10 points to sales growth, and [the] mix was up 1 point. Volume declined 6 points, driven by a combination of market contraction, trade inventory reductions, and portfolio reduction in Russia. Growth was broad-based across business units, with each of our 10 product categories growing or holding organic sales. Personal Health Care grew high teens, Feminine Care, Fabric Care, and Home Care were up high single digits. Hair Care was up mid-single digits. Baby Care, Family Care, Oral Care, and Skin and Personal Care were each up low single digits. Grooming was in line with [the] prior year.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G told analysts that “most of the margin expansion will come from gross margin expansion as we ramp up productivity, pricing continues to flow through, and that builds gross margin period-over-period.”Andre Schulten, CFO: I wouldn’t expect a structural shift in SG&A spend. I think what you’re seeing in the run rate is about what we expect to need in order to be sufficiently funded, and the gross margin — and most of the margin expansion will come from gross margin expansion as we ramp up productivity, pricing continues to flow through and that builds gross margin period-over-period. So that will be the bigger contributor. And we’re not counting on any major reductions in SG&A beyond what productivity allows us to deliver again, at current sufficiency levels, and we are very carefully looking at what can we reinvest actually and still deliver within the range that we want to deliver.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G’s CFO: “I would expect that in the midterm to moderate to 3% to 4% overall growth and still have a negative volume component with offset by strong pricing that we continue to flow through the market.” “Andre Schulten, CFO: Yes. And I would characterize; obviously, the Russia element will be with us, and that’s real. I think the market growth has been around 5% to 6%, with a negative volume component and a very positive price component. I would expect that in the midterm to moderate to 3% to 4% overall growth and still have a negative volume component with offset by strong pricing that we continue to flow through the market. If you look at [the] overall market size over the past three months, that has been the case, and that’s where we expect it to be going forward. And that’s pretty much in line with how we model the balance of the balance of the fiscal year. Our job here is to be ahead of that. And that’s why we’re investing that we will continue to double down on the priority investments everywhere. Jon, I don’t know if you have anything to add.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G’s CFO: “A world in which all of the market growth is driven by pricing is obviously not sustainable.”Andre Schulten, CFO: Look, our desire to reinvest is across all vectors of superiority. So it is product package innovation. It’s in communication; it’s in go-to-market execution. So all of those are relevant. They differ by region, by category, obviously. The reason why we’re focusing more on volume share is we believe that it is our job and opportunity to continue to drive the penetration of our brands. We have a huge runway when you think about our ability to continue to drive consumption and even the most developed categories. So we want to focus our team on driving — continue to drive household penetration, continue to create jobs to be done, and continue to drive consumption opportunities. A world in which all of the market growth is driven by pricing is obviously not sustainable. And so both elements need to come back in balance, and that’s why you see us talk both elements here between value and volume share.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G used these price hikes to funnel billions back to Wall Street Investors 

P&G reported funneling $4.2 billion to investors in the past quarter, “approximately $2.2 billion in dividends and $2 billion in share repurchase.”  ”Andre Schulten, CFO: Productivity improvements were 110 basis points help to the quarter. Adjusted free cash flow productivity was 72%, primarily due to a temporary reduction in payables. We returned $4.2 billion of cash to shareowners, approximately $2.2 billion in dividends, and $2 billion in share repurchase.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G’s CFO: “We expect to pay around $9 billion of dividends and to repurchase $6 billion to $8 billion of common stock, combined a plan to return $15 billion to $17 billion of cash to shareowners this fiscal year.”  “Andre Schulten, CFO: We continue to forecast adjusted free cash flow productivity of 90%. We expect to pay around $9 billion of dividends and to repurchase $6 billion to $8 billion of common stock, combined a plan to return $15 billion to $17 billion of cash to shareowners this fiscal year. This outlook is based on current market growth rate estimates, commodity prices, and foreign exchange rates. Significant additional currency weakness, commodity cost increases, geopolitical disruptions, major production stoppages, or store closures are not anticipated within these guidance ranges.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G noted that growth came despite sales volume decreasing partially to price hikes 

P&G’s CFO specified 3% of the volume decline was “consumption related…which is in line with our expectation and elasticities that we would have expected, given the amount of pricing that is in the market.”Andre Schulten, CFO: On the top line, again, when we look at the half-one results, we feel very good about our standing here to deliver a higher — the higher end of our initial top-line guidance. So that’s why we raised to 4% to 5% organic sales growth. And the fact that we see low volumes in the current quarter really is important to understand in more depth. So the 6% or 5.8% negative volume on the quarter, when you dissect it, about half of that is not really consumption driven. So we have 1 point related to our portfolio choice in Russia, where we cut the portfolio by 50% to focus on essentials versus the full portfolio we were operating before. We have about 2 points related to temporary inventory reductions, which we saw in China with the market heavily impacted by COVID lockdowns and O&D. And especially on the offline side of the market, we see retailer inventories reduce reserve cash. We saw some inventory reduction in power Oral Care and Appliances in Europe. And we have seen in late December, very strong consumption in the U.S., where retail orders haven’t quite kept up with that consumption. So if you strip that out, the actual consumption-related volume decline is about 3% on the quarter, which is in line with what we’ve seen in quarter one, which is in line with our expectation and elasticities that we would have expected, given the amount of pricing that is in the market.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G’s CFO boasted that the company continued to see “more favorable elasticities than we would have expected on historical data” despite 10% price increases. “Andre Schulten, CFO: Hey, Olivia. The — let me start with elasticities. The overall view has not changed. We continue to see more favorable elasticities than we would have expected on historical data pretty much everywhere, but Europe-focused markets. And you can see with 10% pricing flowing through. And when you strip out the non-consumption-related volume effect, a 3% reduction in volume, that is a very benign elasticity that we’re seeing in aggregate and allows us to hold volume share and value share as the pricing flows through. So we feel good about, again, the strategy, doing what we wanted to do, and the execution being very diligent in each of the markets.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

Note: P&G indicated volume share increased in the US, indicating volume decline may have been more of a global phenomenon. “And when we look at the U.S., our biggest and most important markets, we actually see an acceleration of volume share by 50 basis points over the past three months and even 80 basis points over the past one month. Again, all of that gives us confidence to raise the top-line guidance while we want to preserve the flexibility to continue to invest in superiority to drive more sustainable growth. And honestly, that’s going to be our job here over the next few quarters, continue to drive household penetration to reinvigorate overall volume growth in the category.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G told analysts more price hikes were on the way

P&G’s CFO: “many of the large price increases get left this fiscal year. But that doesn’t mean that we’re not putting more pricing in the market. So, for example, we have a number of price increases that go into effect in February.” “Andre Schulten, CFO: Europe is the one place where elasticities have returned to what we would have expected more on historical data, and that is driven by the increased pressure on the consumer. We’re also seeing a little bit of price lag here. So private label, for example, is pricing slower in Europe, and that increases temporarily the price gap versus [the] private label. Nothing we didn’t plan on, but that explains part of the higher elasticities. In terms of peak pricing, you’re right; many of the large price increases get left this fiscal year. But that doesn’t mean that we’re not putting more pricing in the market. So, for example, we have a number of price increases that go into effect in February. So there’s two components here. One where lapping price increases were executed last year, but we’re also still passing through some of the cost pressures via incremental pricing around the world.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G executives stressed retailers were not pushing back on price hikes 

One analyst asked P&G about the retailer response to ongoing price hikes. “Kaumil Gajrawala, Analyst: Good morning. Your commentary, I guess, just now on taking further pricing, it’s obviously appropriate, given we have a series of costs that are still coming through. But can you maybe just talk a little bit about the response from retailers and is that changing in any way? Not that long ago, it seemed across all of CPG; it was maybe easier to get some pricing through. And I’m just curious if that’s changing in any way.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G’s CFO responded that retailers were being “constructive” and “it’s not should we or must we take pricing. I think everybody still understands that we are recovering costs after we recover as much as we can with productivity.” “Andre Schulten, CFO: Yes, Kaumil. The environment continues to be constructive. We don’t see much change in retailer conversations. It’s focused on how do we best play the role that we need to play as a category leader in many of the markets by combining pricing with innovation, executing pricing in a way that consumers can appropriately choose from different price points, different value tiers. And how that plays out at retail shelf, both virtual and physical shelves in the best possible way, so we can help them grow their category grow foot traffic, et cetera. Those are really the majority of the conversations I would characterize this quarter or next quarter as any different than the previous quarters, where really it’s about how do we do this, when is the best time to execute. It’s not should we or must we take pricing. I think everybody still understands that we are recovering costs after we recover as much as we can with productivity.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G’s CEO noted that most retailers have their own private label brands dealing with the “same dynamics,” leading to price hikes. “Jon Moeller, CEO: And as Andre said, the conversation, much more constructive for all concerned when we focus on improving consumer value holistically defined. And that’s exactly what Andre was talking about in terms of the combination of innovation and pricing. And when that’s the conversation, it takes on a very different nature than a more transactional discussion. Also, don’t forget, our retail partners are the owners of the private-label brands that we compete against. They’re facing many of the same dynamics in terms of their cost inputs that we are. So just to reconfirm what Andre said, it’s been a generally constructive discussion. I don’t see anything in my interactions with our retail partners that causes an inflection in that discussion in the near term.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G used so-called “innovations” to justify price hikes 

P&G’s CFO cited “innovations” like Dawn Powerwash as a “catalyst for pricing.”  “Andre Schulten, CFO: Recent innovations like Downy Rinse and Refresh in fabric enhancers and Dawn Powerwash in hand dishwashing are extending superiority advantages and driving value and volume share growth. Innovation also serves as a catalyst for pricing across our other brands and forms in their category segments.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

P&G’s CEO described Dawn Powerwas as a “premium priced item” that was a strong driver of growth for the company.“Jon Moeller, CEO: And this continues to be a market, the U.S. market, that is very responsive in a positive way to innovation that improves performance, both for the product and the package. And we have many examples; Dawn Powerwash as an example introduced at a premium price. The brand has grown at 50% since that introduction, and Dawn has driven 90% of category growth in that situation. Down Powerwash, again, a premium-priced item that was introduced largely during difficult economic times as a standalone brand would be the third largest brand of the category. So I just used that as an example for the continued positive responsiveness of U.S. consumers to innovation, and we’ve got a lot of innovation coming.” (Procter & Gamble Q2 2023 Earnings Call, 1/19/2023)

Highlights from P&G’s Earning Call Presentation emphasize their price hikes

“Organic Sales grew 5% driven by pricing.” (Procter & Gamble Q2 2023 Earnings Presentation, 1/19/2023

“Pricing contributed 10 points to organic sales growth. Mix contributed 1 point. Volume declined 6 points.” (Procter & Gamble Q2 2023 Earnings Presentation, 1/19/2023

“Hair Care organic sales increased mid-single digits versus a year ago. Latin America grew high-teens driven by pricing. North America and Europe grew high single digits behind pricing and innovation. This was partially offset by a mid-single digit decline in Greater China related to market contraction.” (Procter & Gamble Q2 2023 Earnings Presentation, 1/19/2023

“ Both Male Blades & Razors and Female Blades & Razors grew mid-single digits versus a year ago. Topline strength was driven by pricing.“ (Procter & Gamble Q2 2023 Earnings Presentation, 1/19/2023

”Oral Care organic sales increased low single digits versus a year ago driven by premium innovation and pricing, partially offset by a reduced portfolio in Russia and COVID-related disruptions in Greater China.” (Procter & Gamble Q2 2023 Earnings Presentation, 1/19/2023

”Personal Health Care organic sales grew high-teens versus a year ago behind positive mix, pricing and volume. Vicks grew over 20%, benefitting from strong innovation and a higher respiratory season.”  (Procter & Gamble Q2 2023 Earnings Presentation, 1/19/2023

”Fabric Care organic sales increased high single digits versus a year ago, driven by pricing and premium innovation. Laundry organic sales increased mid-single digits, and Fabric Enhancers increased double digits.”  (Procter & Gamble Q2 2023 Earnings Presentation, 1/19/2023

”Home Care organic sales increased high single digits. Dish Care grew high-teens, driven by pricing and premium innovation. This was partially offset by a decline in Surface Care, driven by lower category consumption.” (Procter & Gamble Q2 2023 Earnings Presentation, 1/19/2023

“Baby Care organic sales increased low-single digits driven by pricing and premium innovation. This was partially offset by volume market contraction and retailer inventory de-stocking. (Procter & Gamble Q2 2023 Earnings Presentation, 1/19/2023

”Feminine Care organic sales grew high single digits behind pricing and geographic mix. Feminine Care grew or held organic sales in all regions. Adult Incontinence grew organic sales low teens driven by pricing and innovation.” (Procter & Gamble Q2 2023 Earnings Presentation, 1/19/2023

”Family Care organic sales grew low-single digits, driven by pricing and mix, partially offset by category volumes contracting.” (Procter & Gamble Q2 2023 Earnings Presentation, 1/19/2023