P&G said gross margins are expected to be temporarily lower this quarter due to higher commodity and energy costs and investments needed behind its North America laundry initiative, in which it is offering concentrated formulas of Tide and other liquid detergents in smaller containers.
P&G said it expects gross margins to recover in the second half of its fiscal year due to pricing and increased cost savings from restructuring projects.
P&G officials said they plan to pass along some of the rising costs for oil and raw materials to consumers for some items, including Pampers diapers, Charmin toilet paper and Olay and Ivory personal cleansing products.
Company officials said the price hikes planned over the next few months -- in most cases 5 percent or more -- come as competitors also are raising prices.
A.G. Lafley, P&G's chairman and chief executive, noted that U.S. consumers are pressured by higher energy costs and the housing and credit crunches, but said P&G and its industry traditionally hold up during economic slowdowns.
From the WSJ:
Cold weather hasn't hit the Northeast yet, but record heating-oil prices mean high heating bills are on the way for many residents.
About eight million U.S. households -- largely in New England and the Central Atlantic states -- rely on heating oil to run their furnaces each winter. Last week, heating-oil futures hit a record of $2.36 a gallon, up more than 40% since the start of the year.
Weather forecasters are predicting a colder winter than last year, despite the unseasonably warm October in the Northeast. That's going to lift heating costs no matter what fuel a homeowner uses. Consumers who use heating oil, though, will feel the most pain. Their winter heating bill for the season is expected to average $1,785, compared with $891 for households that use natural gas, according to the Department of Energy. Unlike crude oil, natural-gas prices have been relatively restrained in the U.S. this year.
But remember boys and girls -- according to the Federal Reserve's policy board, energy and food costs don't matter.
