Procter & Gamble said consumers in the U.S. and Europe pulled back on spending in March amid economic uncertainty as President Donald Trump began his trade wars, prompting the company to lower its sales outlook for the year.
The Cincinnati-based consumer products giant reported its results for the January-March quarter last week, posting a $3.8 billion profit on sales of $19.8 billion. Its organic sales, which exclude foreign exchange impact, were up a modest 1% as consumers cut spending.
2025 economic outlook: Consumers worried about tariffs are pulling back on spending
P&G now forecasts its annual sales growth to be flat compared with its previous guidance, calling for an increase of 2% to 4%.
P&G officials said tariffs had a muted impact on its manufacturing operations because it makes most of its products where it sells them, or nearby, but consumers were spending less amid economic uncertainty. CEO Jon Moeller and other company executives said the company is evaluating what longer-term impacts tariffs will have, but higher prices will likely result.
“There will likely be pricing − tariffs are inherently inflationary − but we’re also looking at sourcing options,” Moeller said on CNBC’s “Squawk Box” on April 25.
In a conference call with journalists, Chief Financial Officer Andre Schulten said the direct impact of tariffs on costs was relatively “benign,” between $100 million and $160 million, which would cost the company roughly $1 billion to $1.5 billion a year if they remained in effect. The company’s annual costs for the materials it puts into the products it makes are more than $40 billion a year.
This article originally appeared on Cincinnati Enquirer: Procter & Gamble consumers startled by trade wars, cuts sales forecast
