Procter & Gamble has warned that rising oil and transport costs linked to the Iran war could put further pressure on prices, despite beating its quarterly sales expectations.
The owner of Ariel, Gillette, Olay and Head & Shoulders posted third-quarter net sales of $21.2bn, up seven per cent year on year, while organic sales rose three per cent.
Core earnings per share came in at $1.59, ahead of analyst expectations.
P&G also reported a two per cent rise in volumes, marking its first company-wide volume growth in a year, in a sign that demand is beginning to stabilise after shoppers cut back on everyday household products amid prolonged cost-of-living pressure.
However, the business warned that geopolitical disruption in the Middle East had made the outlook more uncertain, particularly around input costs and consumer spending.
Chief financial officer Andre Schulten said P&G would not provide guidance for fiscal 2027 until its July results, adding: “What do we know what the world looks like three months from now, with what we know today?”
The company said it expects a $150m hit in its fiscal fourth quarter from increased costs, largely driven by higher transportation expenses linked to rising fuel prices. If Brent crude remains around $100 a barrel, P&G said it could face an annual after-tax headwind of around $1bn.
That could lead to higher prices for shoppers, although P&G said it was unlikely to push through blanket price rises across its portfolio. Instead, it is expected to target increases towards premium products as it looks to protect volumes.
The group’s beauty division was the standout performer, with volumes up five per cent across personal care, skincare and haircare. Baby, feminine and family care volumes rose three per cent, helped by higher demand for nappies and family care products including Bounty and Charmin.
Fabric and home care volumes increased two per cent, driven by stronger North American demand for Tide, while grooming and healthcare were weaker, with volumes down two per cent in both divisions.
The consumer goods giant maintained its full-year sales growth guidance of between one per cent and five per cent, but said where it lands within that range had become more uncertain due to the Middle East conflict.
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