Despite rapid increase in costs of production, Procter & Gamble Co. has predicted massive growth in sales and profits during the next three quarters.
The bigger companies use deep pockets and their pricing power on customers’ demand to protect themselves from the global supply-chain breakdowns.
P&G has said it will increase the price of its razors, and beauty and oral care products. The company has already surged the prices of other products from diapers to toilet paper.
In an interview, P&G Finance Chief Andre Schulten said the company’s policy of keeping products in stocks helped it achieve sales and profit goals.
Inflation rate in the US touched the highest level in the past 10 years because of price hikes, while the materials shortages damaged the country’s economy during the pandemic.
Despite the shortage of trucks, IKEA, the world’s largest furniture selling company, continued its sales online and using its alternative means.
Grocer Albertsons Cos., the second-largest U.S. grocer, has posted almost 5 percent growth in sales during last quarter ended in September. The company is offering alternatives to out-of-stock items to keep its sales intact.
Speaking to analysts, Albertsons Chief Executive Vivek Sankaran said supply challenges may continue to persist, creating problems for the shoppers.
Top officials at P&G revealed that their company’s capability to spend on supply-chain resolves the stocking issue. They said P&G’s variable operations are helping it keep products in stock.
P&G said it has started hiring backup suppliers and it is changing shipping routes to avoid supply hurdles.
When authorities in some Chinese provinces limited power supply to factories, P&G shifted production to other plants to maintain its supply chain.
Lauding his company’s operations, P&G’s operating chief Jon Moeller said they have become a very attractive customer for their suppliers because of the company’s huge business size.
He continued that the big companies are able to spend $10 million to reserve three ships, or they can mobilize a team of engineers to solve new problems.
During the pandemic, P&G outclassed most of its rivals. Last year, the company’s revenues surged to $76 billion compared with its closest competitor Unilever PLC’s $45 billion.
P&G shares are up almost 2 percent from six months ago, while Unilever, Kimberly-Clark Corp. and Colgate-Palmolive Co. have seen shares fall 7 percent in the same period.
During the last quarter, P&G’s net sales increased 5 percent to $20.3 billion. The company’s sales remained higher than the consensus forecast of $19.8 billion from analysts polled by FactSet.
Entertainment6 months ago
Entertainment6 months ago
Entertainment6 months ago