The data is not intended to be definitive, but does show how a wide sample of companies have raised prices even as profits jumped. Price increases were obtained by checking earnings reports, though those often lacked specifics. It compared the most recent quarter’s profits to the same quarter two years prior, pre-pandemic. The Guardian’s analysis is the first to take a granular look at a cross-section of companies across a range of industries. Inflation, meanwhile, rose to 8.5% year over year in March. The Guardian’s findings are in line with recent US commerce department data that shows corporate profits rose 35% during the last year and are at their highest level since 1950. “Inflation itself is the opportunity.” Profits or profiteering? “That gray, nebulous area is fertile ground for companies right now, and you hear about it in their earnings calls,” Owens said. That obscures questionable price increases, she added, and allows businesses to be portrayed as “victims”. The pandemic, war, supply chain bottlenecks and pricing decisions made in corporate suites have created a “smokescreen”, said Lindsay Owens, executive director of the Groundwork Collaborative, which tracks companies’ profits. Similarly, a Kroger executive told investors in June, “a little bit of inflation is always good for our business”, while Hostess’s CEO in March said rising prices across the economy “helps” it profit. Still, customers will pay even more for candy bars in 2022 as Hershey aims for even higher profits: “Pricing will be an important lever for us this year and is expected to drive most of our growth,” CEO Michele Buck told investors. Quote from Chipotle CEO on pricing power. “It’s obvious that corporations are trying to pass on any form of short-term pain they might be feeling … and that’s serving the top, wealthiest class instead of those in need of fair wages or products that are affordable,” said Krista Brown, a policy analyst with the American Economic Liberties Project. Margins – the share of sales converted into profits – also improved for the majority of the companies analyzed by the Guardian.Įconomists who reviewed the data say it’s more evidence of a clear reality: Consumers are taking a financial hit as companies and shareholders profit or are largely shielded. In earnings calls, executives detailed how even as demand and profits rose post-vaccine, they passed on most or all inflationary costs to customers via price increases, and some took the opportunity to add more on top. Those increases came as companies saddled customers with higher prices and all but ten executed massive stock buyback programs or bumped dividends to enrich investors.
The analysis of Securities and Exchange Commission filings for 100 US corporations found net profits up by a median of 49%, and in one case by as much as 111,000%.
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