U.S. consumer goods maker Procter & Gamble PG.N will again look to hike prices on its household basics such as Tide detergent if President Donald Trump imposes new tariffs that increase the cost of imports, an executive said Wednesday.
“Whatever the administration decides to do, we will be able to deal with,” P&G chief financial officer Andre Schulten said on a call with reporters following quarterly earnings. He added the company will first try to offset possible tariffs by cutting costs.
“And what we can’t offset with productivity, it might result in incremental pricing,” Schulten added.
P&G’s sales volumes rose in the quarter ended Dec. 31, while the company kept prices flat across its global portfolio of dish soaps, laundry detergents and toilet papers.
The company, viewed by investors as a top operator in the cut-throat consumer products industry, buys inputs like chemicals, razor blades and small electronics from around the world and manufactures the final product closer to consumers in local factories.
P&G has frequently hiked prices over the last several years as it faced escalating costs on fuel and labor. Trump’s proposed round of new tariffs – which could first target Mexico and Canada – could further add to those costs.
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“I think it’s still a risk,” said Michael Ashley Schulman, chief investment officer at P&G investor Running Point Capital. “It’s a little hard to quantify, how much of that tariff they can pass through to consumers.”
Over the last four years the company has overhauled its razor blade supply chain for its Gillette brand, a move that could cushion its margins under new tariffs. P&G competitor Edgewell also told Reuters earlier this year it was looking to lock in Chinese chemical supplyfor its sunscreens ahead of possible tariffs.
Schulten said P&G also had “formulation flexibility,” meaning it can adjust the ingredients in its products if they became too expensive or unavailable due to tariffs.
P&G, grappling with a supply chain crisis after the COVID-19 pandemic, invested $6 billion in U.S. manufacturing in the last six years, Schulten added.
(Reporting by Jessica DiNapoli in New York; Editing by Nia Williams)
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