U.S. consumers have been reining in spending on discretionary items as inflation outpaces wage growth despite ebbing in recent months. This trend has threatened returns for businesses like P&G, the consumer goods giant behind a wide variety of ubiquitous household items like Fairy washing up liquid and Pampers baby diapers.
In response to the crimp on expenditures, P&G has pushed up prices. The decision has left the company open to criticism that it was pursuing profitability at the expense of ailing customers, a charge that executives have countered by noting that there has been "no broad-based relief" for its own input costs.
Prices grew by 7% during the April to June period, P&G said, driving up net sales to $20.6 billion, mitigating the effect of 1% decrease in shipment volumes and "significant cost headwinds."
Diluted earnings per share in turn jumped by 13% to $1.37, topping Bloomberg consensus estimates of $1.32. Shares in P&G rose in premarket trading on Friday.
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