Latest news with #Nestle
Korea Herald
2 hours ago
- Business
- Korea Herald
Trump gets tariffs; Americans get price hikes
US President Donald Trump is getting his tariffs. Companies are making it clear how they intend to deal with it — passing them on to American consumers. Throughout the spring, big retailers and consumer product makers warned that levies on imported goods would squeeze their operations, forcing them to choose between lower earnings and passing on higher costs to customers. In the case of Procter & Gamble and others, it is both of those things. On Tuesday, the packaging giant, which makes household basics spanning from Bounty paper towel to Tide detergent, issued a sour outlook for 2025 and sent a message to big retailers like Walmart that it would have to raise prices on some US goods from next week. This challenge facing companies in coming quarters will likely feed through to everyday consumers. P&G said it would raise prices on about a quarter of its products in the US to help offset the cost of new tariffs. Price hikes are in the mid-single digits across categories, a spokesperson for the company said. While US stock indexes have soared to record highs this year, built on massive investment in technology shares, many consumer bellwethers have struggled. Since Trump's April 2 "Liberation Day" tariff announcements, P&G shares have declined 19 percent; Nestle is down 20 percent; Kimberly-Clark has lost 11 percent, and PepsiCo is off nearly 7 percent, while the benchmark S&P 500 stock index has gained more than 13 percent. Consumer goods, food and drink companies have struggled with lackluster sales since the pandemic, as shoppers have balked at increasingly expensive name-brand packaged food. Nestle said last week that consumers in North America remained wary of paying more at the cash register. More price hikes will deepen investor worries about how big brands are navigating the combined challenge of thrifty consumers and hefty costs created by Trump's trade war. "You're going to see companies like Walmart, Amazon, and Best Buy forced to pass price increases to consumers," said Bill George, former chairman and CEO of Medtronic and executive education fellow at Harvard Business School. "Main Street has yet to see the fallout from increased tariffs - and they're going to go higher." Between July 16 and 25, companies in the Reuters global tariff tracker said they expected to lose a combined $7.1 billion to $8.3 billion for the full year. GM, Ford and other carmakers have absorbed the cost of tariffs — totaling billions of dollars — so far. Many companies shipped more goods and raw materials into the US before tariffs hit. Economists and analysts reckon that hoarding has helped some delay hiking prices until later in the year and explains why tariffs have not yet shown up in US inflation data. Andrew Wilson, International Chamber of Commerce deputy secretary general, estimates inflation will be felt once companies have run down inventory, but that might not be until the fourth quarter or first quarter of next year. Others like Ray Ban-maker EssilorLuxottica have already hiked prices. Swiss watch and jewelry maker Swatch increased prices by about 5 percent after Trump announced tariffs in April with "zero impact" on sales, CEO Nick Hayek told Reuters recently. High-end brands like Tissot watches are less price sensitive to increases. Customers wanting to splash out on an expensive watch might also buy abroad when travelling where taxes are lower, he said.
Yahoo
17 hours ago
- Business
- Yahoo
P&G signals sluggish annual growth amid leadership change, tariffs
(Reuters) -Procter & Gamble on Tuesday forecast annual results largely below Wall Street estimates in the face of cautious consumers, a day after the Tide parent named an insider as CEO to steer it through the tariff uncertainty. The muted expectations will likely pile pressure on Shailesh Jejurikar, who on Monday was named to the top post replacing Jon Moeller. Meanwhile, P&G, which topped fourth-quarter revenue and profit estimates on price hikes, will raise prices on about a quarter of its products in the U.S., starting this month, to help offset the cost of new tariffs imposed by President Donald Trump. The price hikes have been communicated to retailers such as Walmart and Target and are in the mid-single digits across categories, a spokesperson said, and will be seen on shelves starting in August. The comments from the world's largest consumer goods maker reinforce how consumers, particularly in the lower income category, are seeking value as they look to stretch their household budgets. Packaged food maker Nestle said last week that consumers in North America remained weak. P&G, which makes household basics spanning from Bounty paper towel to Metamucil fiber supplements, estimated tariffs will increase its costs by about $1 billion before tax for fiscal 2026. That compares with projections of between $1 billion and $1.5 billion made in April. P&G expects fiscal 2026 core net earnings per share growth in the range of flat to up 4% to between $6.83 and $7.09, compared with estimates of a 3.49% growth to $6.99, according to estimates compiled by LSEG. The company expects total net sales for fiscal 2026 to grow between 1% to 5%, the mid-point of which was slightly below analysts' average estimate of a 3.09% rise to $86.80 billion. P&G began a restructuring effort in June to exit some brands and cut about 7,000 jobs over the next two years to increase productivity. The company's revenue rose 1.7% to $20.89 billion in the fourth quarter, compared with analysts' average estimate of a 1.38% rise to $20.82 billion. Prices rose 1% while volumes were flat year-over year, after having fallen about 1% in the prior quarter. The company reported earnings per share of $1.48 for the three months ended June 30, compared with estimates of $1.42. Its shares were up marginally in premarket trading. They have fallen about 6% so far this year.
Reuters
17 hours ago
- Business
- Reuters
P&G signals sluggish annual growth amid leadership change, tariffs
July 29 (Reuters) - Procter & Gamble (PG.N), opens new tab on Tuesday forecast annual results largely below Wall Street estimates in the face of cautious consumers, a day after the Tide parent named an insider as CEO to steer it through the tariff uncertainty. The muted expectations will likely pile pressure on Shailesh Jejurikar, who on Monday was named to the top post replacing Jon Moeller. Meanwhile, P&G, which topped fourth-quarter revenue and profit estimates on price hikes, will raise prices on about a quarter of its products in the U.S., starting this month, to help offset the cost of new tariffs imposed by President Donald Trump. The price hikes have been communicated to retailers such as Walmart (WMT.N), opens new tab and Target (TGT.N), opens new tab and are in the mid-single digits across categories, a spokesperson said, and will be seen on shelves starting in August. The comments from the world's largest consumer goods maker reinforce how consumers, particularly in the lower income category, are seeking value as they look to stretch their household budgets. Packaged food maker Nestle (NESN.S), opens new tab said last week that consumers in North America remained weak. P&G, which makes household basics spanning from Bounty paper towel to Metamucil fiber supplements, estimated tariffs will increase its costs by about $1 billion before tax for fiscal 2026. That compares with projections of between $1 billion and $1.5 billion made in April. P&G expects fiscal 2026 core net earnings per share growth in the range of flat to up 4% to between $6.83 and $7.09, compared with estimates of a 3.49% growth to $6.99, according to estimates compiled by LSEG. The company expects total net sales for fiscal 2026 to grow between 1% to 5%, the mid-point of which was slightly below analysts' average estimate of a 3.09% rise to $86.80 billion. P&G began a restructuring effort in June to exit some brands and cut about 7,000 jobs over the next two years to increase productivity. The company's revenue rose 1.7% to $20.89 billion in the fourth quarter, compared with analysts' average estimate of a 1.38% rise to $20.82 billion. Prices rose 1% while volumes were flat year-over year, after having fallen about 1% in the prior quarter. The company reported earnings per share of $1.48 for the three months ended June 30, compared with estimates of $1.42. Its shares were up marginally in premarket trading. They have fallen about 6% so far this year.
Yahoo
17 hours ago
- Business
- Yahoo
P&G signals sluggish annual growth amid leadership change, tariffs
(Reuters) -Procter & Gamble on Tuesday forecast annual results largely below Wall Street estimates in the face of cautious consumers, a day after the Tide parent named an insider as CEO to steer it through the tariff uncertainty. The muted expectations will likely pile pressure on Shailesh Jejurikar, who on Monday was named to the top post replacing Jon Moeller. Meanwhile, P&G, which topped fourth-quarter revenue and profit estimates on price hikes, will raise prices on about a quarter of its products in the U.S., starting this month, to help offset the cost of new tariffs imposed by President Donald Trump. The price hikes have been communicated to retailers such as Walmart and Target and are in the mid-single digits across categories, a spokesperson said, and will be seen on shelves starting in August. The comments from the world's largest consumer goods maker reinforce how consumers, particularly in the lower income category, are seeking value as they look to stretch their household budgets. Packaged food maker Nestle said last week that consumers in North America remained weak. P&G, which makes household basics spanning from Bounty paper towel to Metamucil fiber supplements, estimated tariffs will increase its costs by about $1 billion before tax for fiscal 2026. That compares with projections of between $1 billion and $1.5 billion made in April. P&G expects fiscal 2026 core net earnings per share growth in the range of flat to up 4% to between $6.83 and $7.09, compared with estimates of a 3.49% growth to $6.99, according to estimates compiled by LSEG. The company expects total net sales for fiscal 2026 to grow between 1% to 5%, the mid-point of which was slightly below analysts' average estimate of a 3.09% rise to $86.80 billion. P&G began a restructuring effort in June to exit some brands and cut about 7,000 jobs over the next two years to increase productivity. The company's revenue rose 1.7% to $20.89 billion in the fourth quarter, compared with analysts' average estimate of a 1.38% rise to $20.82 billion. Prices rose 1% while volumes were flat year-over year, after having fallen about 1% in the prior quarter. The company reported earnings per share of $1.48 for the three months ended June 30, compared with estimates of $1.42. Its shares were up marginally in premarket trading. They have fallen about 6% so far this year.
The Star
a day ago
- Business
- The Star
Recovery in sales volume to propel Nestle
PETALING JAYA: Nestle (M) Bhd is poised for a stronger second half of 2025 (2H25), underpinned by easing raw material prices, stable margins and a steady recovery in sales volume, following a challenging year marked by cost pressures and boycott-related disruptions. According to Maybank Investment Bank (IB) Research, Nestle's sales volume has shown progressive recovery in 1H25 and this remains its key focus in 2H25. The research house raised its 2025 to 2027 earnings forecasts by up to 22%, citing 'a clearer route to recovery in relation to its brand image and cost pressures from raw materials.' Maybank IB Research said that Nestle's second-quarter revenue rose 10% year-on-year (y-o-y), driven by price hikes and systematic sales volume recovery. It added that 'the group is on a stronger footing to enhance market competitiveness and rebuild market share across its product categories'. Meanwhile, CGS International Research remained cautious, citing stretched valuations. 'We believe valuations are rich at 35.8 times 2025 price-earnings ratio with a 2.4% 2025 dividend yield,' the research house said, maintaining a 'reduce' call with a target price of RM78. It acknowledged a volume recovery in 2Q25 following the easing of boycotts and noted that 'export revenue growth was helped by growing demand for halal products in both existing and new markets'. It added that management saw stability in margins supported by 'ongoing hedging efforts, and recent easing in cocoa and coffee prices'. Hong Leong Investment Bank (HLIB) Research pointed to a mixed outlook, with operational efforts offsetting persistent external challenges. 'The group continues to navigate rising commodity costs through a steadfast focus on operational efficiency, cost savings initiatives, and greater digitalisation,' it said. Despite selective price increases, HLIB Research cautioned that 'the ongoing boycott against Western-affiliated brands continued to dampen demand' and is unlikely to fully revert soon. Nonetheless, the the research house highlighted that product innovation remained a bright spot, with launches such as Nescafe Coffee Concentrate and Kit Kat 3-in-1 reinforcing the group's pivot toward health-focused and convenience-led offerings. HLIB Research reiterated its 'hold' rating with an unchanged target price of RM80. CIMB Research also held a steady view, with no changes to its forecasts or 'hold' rating. It noted that 'Nestle does not intend to implement major selling price adjustments, opting instead to focus on maintaining affordability in view of the current subdued consumer spending environment.' The research house underscored Nestle's long-term growth strategy centred on innovation, including the 'world's first drinkable KitKat' as aligned with global priorities. 'Gross profit margins are expected to remain stable in 2H25,' it added, citing digitalisation and efficiency initiatives as cushions against cost pressures. TA Research struck an optimistic tone, raising its earnings forecasts by up to 7.6% and its target price to RM102.80. It attributed the gains to higher sales assumptions and robust brand investments. 'Operating expenses rose 4% y-o-y mainly attributed to higher marketing investments,' the research house noted, pointing to promotional campaigns tied to new launches and Milo's 75th anniversary. It said the efforts are supportive of top line growth, with the potential to strengthen brand equity, enhance customer loyalty, and reinforce Nestle's market leadership.
