Procter & Gamble Expects a Commodity Tailwind, but Do Inflation Worries Loom?
Procter Gamble (NYSE: PG) is one of the largest consumer staples producers on the planet, making it an important company to watch in the industry. Normally a pretty boring sector, the last couple of years have been exciting, but not in a good way. Inflation pushed margins lower, causing P and its peers to raise prices. The dynamics are starting to change, but this industry bellwether is warning that there are still problems to deal with.
There's a typical cycle in the consumer staples space. As a company faces rising costs for ingredients, packaging, transportation, and salaries, it cuts costs, changes packaging architecture (for example, putting less product in a box), and raises prices. Normally these things are rolled out slowly over time because inflation tends to be slow moving.
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Source Fool.com
