The cost of Pampers diapers, Bounty paper towels, Charmin toilet paper and Puffs tissues are going up as parent company Procter & Gamble‘s profit margins get squeezed between rising competition and increased costs.
128-count pack of swaddlers for newborns from $34.99 at Target to about $36.39.
Bounty, Charmin and Puffs will be an average of 5 percent more expensive, the company said. It’s raising prices to help offset disappointing earnings results and a 15 percent slide in profits — to $1.89 billion during the three months ended June 30 from $2.22 billion during the same quarter last year.
“These [price hikes] are aimed to address commodity costs the entire industry is experiencing,” CEO David Taylor told analysts on a conference call Tuesday.
P&G’s sales for the three months ended June 30 fell short of Wall Street’s expectations. Though sales for the quarter were up 3 percent compared with last year, its earnings results showed that it’s continuing to lose market share on several key products and its profit margins have fallen over the last 12 months. Organic sales growth, which strips out the impact of currency and other adjustments, rose by just 1 percent when stock analysts projected a 2.3 percent gain.
The Cincinnati company’s shares fell by as much as 3 percent in premarket trading.
Sales in its baby business, which includes Pampers and other brands, dropped 2 percent, which the company blamed in part on market pullback in the Middle-East, Africa and Latin America. The business was also hurt by deep discounts by other retailers — a constant sore point for the consumer giant over the past few quarters.
P&G’s Gillette shaving business continues to be a weak spot for the company, with net sales dropping 3 percent in its grooming business for the quarter. P&G blamed weakness in the business on “investments to improve consumer and customer value.” The unit has seen increased competition over the past few years from cheaper rivals like Dollar Shave Club.