Procter & Gamble Co. can be expected to beat expectations, as it usually does, when it reports fiscal second-quarter earnings later this week, but investors can assume that continued price increases will hurt demand more than they have in years.
The consumer packaged-goods company PG , whose brands include Tide, Pampers, Crest and Head & Shoulders, is slated to report results for the quarter through December on Thursday’s opening bell. A concern among Wall Street analysts is over what is referred to as price elasticity, which is how economists measure the affect of price changes on demand. Higher elasticity means that price changes have a greater effect on demand.
Chief Financial Officer Andre Schulten said in December that he was “positively surprised” by how little demand for P&G’s products was hurt even though the company raised prices more than its peers, according to a FactSet transcript. He said elasticities seen around the world were “significantly more favorable” than would have been expected.
Basically, he expects P&G products to be more price elastic than they have been, and Wall Street appears to agree.
Thanks. I looked this up given their share price has tanked quickly around more tampon price increases locally to me in Asia. I wonder if P&G also plans to manage its own costs by reducing overhead on things like Always then a perm for Permanent global selloff announcements.
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