"A good monsoon will also be deflationary, " Mr. Sabnavis said, noting that prices of food items depend not just on a good harvest, but also on farm input costs and whether the government increases assured prices of food staples.
Profits were offset by higher input costs on materials like wood pulp during the quarter.
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On the back of higher input costs, particularly for potato and wheat products, were counteracted with aggressive pricing action, the company noted.
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If companies do not or cannot pass on the rise in their input costs to consumers, they will either have to cut costs by sacking people (not a policy that finds much favour in China) or accept lower profits.
Solid revenues across virtually all major categories and the addition of the Cars 2 and Green Lantern franchises are encouraging, but Wells Fargo analysts say investors want more clarity on matters like inventory, input costs, pricing and the sustainability of products tied to Cars 2 and other entertainment tie-ins.
The Beige Book showed a stable employment situation and easing price pressures on producers, despite relatively elevated input costs.
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The handset pricing has been on a continuous decline due to decreasing input costs associated with making a mobile phone.
Operating margin fell to 17.7% at the Golden Arches, as input costs began to put serious pressure on profits.
It is heavily dependent on natural gas prices as an input, and these costs could be surging if current trends hold.
That trend, while understandable as the company wrestles with a still-soft market and suddenly rising input costs, could put a damper on Sysco shares in the future.
There are worries with rising energy prices and rising labor costs in some parts of the world, that these input costs will eventually become extra weight on mining companies.
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General Mills reported fiscal second-quarter profits that fell short of Wall Street estimates Tuesday, as higher input costs and expenses contributed to pressure on the bottom line for the Minnesota-based snack food company.
While Fed Chairman Ben Bernanke insists on calling inflation subdued and transitory, various companies have indicated that they have been forced to acknowledge a pickup in input costs and inflation in their outlooks, as prices begin to be passed on to consumers.
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The company also reported rising input costs and is looking to cut back on output.
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"Many sheep farmers, especially those on the uplands and in the Peak District, have struggled with rising input costs and poor weather, " he added.
Moreover, even if cotton prices were to remain high, this is an industry wide input cost that would eventually lead to Aeropostale as well as its competitors passing on costs to consumers.
For Mr. Chait, who was already paying for the location and some of the staff salaries, input costs were minimal, and he made a margin of about 20% on each event, he said.
These increased input costs reflect how the U.S. is importing inflation, as evidenced by the detrimental impact on some companies in the consumer discretionary sector.
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