PROFITS BEFORE LOWER PRICES:
While Republicans in Congress continue to play the blame game on inflation challenges, they’re letting their big corporate donors off the hook for the outsized role they play. Much like Congressional Republicans are exploiting the struggles of working families and small businesses navigating a once-in-a-lifetime pandemic, it’s clear many corporations are taking advantage of this moment for their own selfish gain.
More and more companies are using the pandemic to increase their wealth and line their shareholders’ pockets as they boast to their investors of record profits and healthy balance sheets. These corporations have a choice: they can reward themselves with lucrative stock buybacks and bigger CEO bonuses — or they can pass their success onto their customers with lower prices. As Accountable.US continues to document, too many companies are choosing to profiteer rather than do right by consumers and the economy.
- Shortly after household goods giant Procter & Gamble announced price hikes on its Tide and Gain brands, the company reported $4.2 billion in second quarter profits and plans for at least $17 billion in shareholder handouts.
- J.B. Hunt Transport Service, a supply chain solutions company in North America, saw “unprecedented” growth in 2021 and reported that its fourth quarter operating income increased 76% from price increases.
- KB Home, one of the largest homebuilders in the country, admitted to raising prices “across nearly all of [their] communities” in 2021 — leading to a 91% net income increase in profits for the year.
- Procter & Gamble (January 19): Working families are bearing the brunt of P&G’s anticipated price hikes and corporate greed, despite higher net earnings compared to this time last year, the company plans to line shareholders’ pockets with at least $17 billion in handouts in 2022.
- J.B. Hunt Transport Service (January 18): In October when J.B. Hunt claimed wage inflation is the “new norm,” it reached its “biggest weekly gain in 12 years.” Since then, the company increased its capital expenditures to $877 million and had $356 million in cash at the end of 2021.
- KB Homes (January 12): CEO and President Jeffrey Mezger bragged his company “delivered outstanding growth in revenues and margins ” in its fourth quarter, resulting in a 70% year-over-year increase in earnings per share.
CORPORATE GREED IN ACTION
- KB Home Executive Vice President and CFO Jeff Kaminski: “We anticipate significant sequential expansion in quarterly gross margin during 2022 mainly driven by price increases that have outpaced cost pressures in our established communities, strong selling margins in a recently opened communities and an expected reduction in amortization of previously capitalized interest.”
- P&G’s CFO Andre Schulten: “We expect pricing to be a larger contributor to sales growth in the back half of the fiscal year as more of our price increases become effective in the market.”