Unilever, the maker of various household products including Dove soap and Hellman’s mayonnaise, has warned that price pressures are rising by the sharpest pace in over ten years, forcing the company to reduce its profitability targets for the remainder of the year. Last week, the maker of Vim cleaning products forecast that its 2021 margins have fallen to levels observed last year, as input costs become increasingly elevated.
Unilever’s underlying profit margin declined from 19.8% in 2020 to 18.8% this year, amid rising raw material prices, such as crude oil and palm oil, coupled with increasing US freight costs. This has made it more expensive for the UK-based company to produce home-care items such as detergents, as well as soap and shower gel. As a result, consumers will soon pay a higher price for a number of Unilever goods, ranging from ice cream and shampoo products, explained the company’s CEO Graeme Pitkethly.
General Electric CEO Larry Culp also echoed similar inflation concerns, which are expected to deepen for the rest of the year. In an interview with Reuters, Culp said the industrial conglomerate is controlling price pressures via several price increases, as well as more efficient sourcing of key materials. GE also revealed that it is in the midst of devising a variety of other mitigation measures, as it anticipates supply chain disruptions to continue well into 2022.
Information for this briefing was found via Unilever, GE and Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.