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(Bloomberg) -- Procter & Gamble Co. organic sales surpassed estimates on higher volume, a change from earlier quarters where most of the company’s growth came from price hikes.
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Organic sales rose 3% in the three months ended Dec. 31, P&G said Wednesday, the biggest increase in three quarters. Most of that was due to higher volume, meaning retailers bought more essentials like Dawn dish soap and Gillette razors to restock their shelves. Prices were unchanged compared with the year-earlier quarter, the first time they haven’t risen since 2019.
The shares rose as much as 2.6% as of 12:10 p.m. in New York.
The results suggest that the era of endless price hikes may be waning. Companies that make consumer package goods have for years counted on price increases to help fuel revenue growth. In P&G’s fiscal year that ended last June, prices were 4% higher compared to the year earlier, when prices were also elevated.
Other major companies are also signaling that price hikes are starting to taper off. Coca-Cola Co. has said that price increases on its sodas, juices and other beverages this year will be lower than the past few years.
In an interview with Bloomberg Television at the World Economic Forum in Davos, the company’s new chief operating officer, Henrique Braun, said that Coca-Cola expects increases in pricing “to be more moderate.”
Companies are under pressure to slow inflation as President Donald Trump takes office. In an executive order issued Jan. 20, Trump said consumers are facing a “cost-of-living crisis” and that it’s “critical to restore purchasing power to the American family.”
“We see consumers trading up,” Andre Schulten, P&G’s chief financial officer, said in an interview. “They’re trading into either bigger pack sizes or they’re trading into higher-value items.”
Schulten said P&G is responding to the cost-of-living crisis reflected in Trump’s executive order by innovating on less-expensive items, such as Luvs baby diapers, which were relaunched with an upgraded diaper last year.
“We recognized the consumer was looking for more innovation on the value tier,” he said. “The consumer is responding. We are growing share.”
P&G said innovation helped drive growth in its grooming and oral-care businesses. The company has been creating new products that it can charge more for, including all-over body deodorant and razors for different body parts. P&G has also been trying to get its products on more end caps in retail stores to encourage more impromptu purchases.