(Reuters) - Church & Dwight (NYSE:CHD) raised its annual sales and profit forecasts on Friday, betting on higher prices and steady demand for its household and personal care products including liquid detergents and mouthwash.
Consumer goods companies have been jacking up prices of their products to safeguard margins from spiraling costs linked to manufacturing, supply chain, raw materials, labor and a stronger U.S. dollar.
Yet, they have seen minimal resistance from customers, who have otherwise cut back on discretionary spending including apparel and home goods in the face of still-high food prices and rentals.
However, investors have now started flagging their concerns about higher prices to consumer good companies as it can put them at a potential risk of losing customers.
The consumer products firm's overall average selling prices increased 5.8%, while its volumes decreased slightly during the quarter ended June 30. However, the company's volumes are expected to be positive in the second half and the full year, the Trojan condom maker said.
Earlier in the week, Dove soap maker and European peer Unilever (NYSE:UL) also beat quarterly sales estimates after hiking prices again to offset elevated costs with volumes only falling by 0.3%.
Church & Dwight now expects full-year adjusted profit to increase by 6%, compared with its earlier forecast of growth of 2% to 4%.
The company sees full-year reported net sales growing by 8%, compared with its previous forecast of a 6% to 7% increase.
Church & Dwight's second-quarter revenue rose 9.7% to $1.45 billion, compared with estimates of $1.42 billion, according to Refinitiv data, while it reported a profit of 89 cents per share.