Pricing power is what’s allowing many companies — including seven of our Club holdings — to support revenue growth and enhance, or at the very least protect, profitability during an earnings season marked by a still-elevated inflationary environment. When we’re talking about “pricing power,” it’s the ability of companies with strong brands to raise prices without seeing too much impact on demand. In many cases, it’s because consumers, who are also feeling the bite of inflation in their personal budgets, are willing to pay those higher prices because the products are so essential to their everyday lives. And, in times of economic uncertainty, consumers tend to take comfort in their favorite brands. For example, Club holding Procter & Gamble (PG) beat on the top and bottom lines in its fiscal third quarter as price increases enriched profit margins despite a small slip in volumes . Similarly, comparable sales at McDonald’s (MCD) increased by 13% in the first quarter and traffic increased despite increased menu prices. Strategic price hikes at Coca-Cola (KO) resulted in strong Q1 revenue and a muted effect on people’s buying habits. “Some of the best brands in America have been able to push through price increases and have seen favorable demand to where the consumer has responded without too much negativity,” Bradley Thomas, consumer and retail analyst at KeyBanc, said in an interview with CNBC. Cash-strapped Americans are “seeking value,” Thomas added. Remember, value is not always about offering the lowest price, it’s about offering the greatest bang for your buck. The pricing success at P & G, Coca-Cola, or McDonald’s comes down to consumers feeling that they are still getting that value from brands they know and love. Here’s a list of Club holdings with pricing power, starting with a closer look at P & G. PG YTD mountain Procter & Gamble’s stock performance year to date. Procter & Gamble last week delivered quarterly earnings and revenue beats while raising guidance for full-year organic sales growth. The consumer goods powerhouse raised prices across segments, lifting its gross margin by 150 basis points to 48.2% in its fiscal third quarter. P & G reported a 4% increase in fiscal Q3 sales. Organic sales, which exclude the impacts from foreign exchange, acquisitions and divestitures, rose 7%. That increase was driven by a 10% boost from higher pricing. But the Tide, Pampers and Gillette maker’s volume fell 3% as some shoppers traded down to cheaper alternatives. We aren’t concerned since some volume decline is to be expected given the magnitude of the price hikes. Management was able to strike a balance between delivering growth and the best value to customers through its premium products. JNJ YTD mountain Johnson & Johnson’s stock performance year to date. Johnson & Johnson (JNJ)exhibited pricing power during the first quarter in its consumer business, which will be separated later this year and brought public as a standalone company…
Read More: These 7 Club holdings are using pricing power to boost profits this