The logo for Procter & Gamble Co. is displayed on a screen on the floor of the NYSE in New York
The logo for Procter & Gamble Co. is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 27, 2018. Reuters

Procter & Gamble Co's customers continued to show little resistance to repeated price hikes, helping the Tide detergent maker boost its annual sales forecast and third-quarter margins.

The company also beat Wall Street targets for quarterly results and sweetened the pot for investors by raising the upper end of its 2023 share buyback target to between $7.4 billion and $8 billion, sending its shares up 3% to $154.93 in early trade.

The maker of Pampers diapers, Pantene shampoo and Oral-B toothpaste raised average prices across product categories by 10% during the quarter, and saw overall volumes fall just 3%.

Consumer goods makers, typically the last to see demand impacted by economic slowdowns, have hiked prices repeatedly to pass on steep input costs stemming from supply-chain snags and worsened by the Ukraine crisis.

P&G's gross margin rose by 150 basis points from a year ago, with a 470-basis point boost from the increased pricing.

But shrinking consumer wallets in the face of high inflation have fanned concerns of how much longer rising prices will be tolerated before triggering a switch to cheaper, private-label brands.

The decline in P&G's volumes sold is "obviously driven by pricing", said CFO Andre Schulten on a media call.

"We see consumers being a bit more careful with dosing and drawing down inventories over time."

The fabric and home-care unit, P&G's biggest segment, saw sales volumes fall 5%, with average price rising to 13%.

The company lowered its annual cost estimate related to commodity and freight expenses to about $3.5 billion from $3.7 billion, but Schulten said there is "no broad-based relief in input costs".

"Some (commodities) are down... Others are going up. Every highly energy intensive material, if you think about caustic soda or ammonium, it's actually increasing in pricing."

The company expects fiscal 2023 organic sales growth of about 6%, compared with its previous forecast for a 4% to 5% increase.

P&G maintained its annual earnings forecast of flat to a 4% rise.