Americas Consumer Staples: Higher oil and freight costs point to Consumer Staples margin pressure through 1H27

Overview

Goldman Sachs examines how geopolitical disruption, elevated energy prices and freight-rate inflation could affect US Consumer Staples companies. The report expects cost pressures to intensify through 2H26 and 1H27, with easing year-on-year comparisons only from 2H27, and identifies substantial variation in company-level exposure.

Core views

Goldman Sachs links the Middle East conflict and disruptions to oil flows through the Strait of Hormuz to a sharp rise in oil, fuel and logistics costs. Brent crude is tracking above $100/bbl, compared with low-$70s levels in February. US retail gasoline has risen more than 54% year to date to above $4.00 per gallon, while diesel is up about 80% year to date and above $6 per gallon. Freight rates have risen roughly 80% versus 2025 average levels. The report expects these pressures to weigh on Staples margins through 2H26 and 1H27, with year-on-year relief beginning in 2H27 as companies lap the elevated cost base. Freight inflation is not solely an oil-price effect. Goldman Sachs notes that long-haul truck-driver employment remains nearly 11% below its 2022 peak and roughly 6% below its pre-pandemic peak. It also highlights that possible restrictions around non-domiciled commercial driver's licenses and English-language proficiency, including the proposed Dalilah law, could further constrain driver supply. Beyond freight, its commodity work points to stacked inflation across resins—particularly PET—oil and eucalyptus pulp during 2026-27, while NBSK, dairy, natural gas and several beverage inputs remain more accommodative. The report's bottom-up COGS trackers indicate a materially faster inflation ramp than earlier assumptions. For Home and Personal Care, the tracker now implies high-single-digit CY26 inflation, reversing Goldman Sachs' January expectation of modest deflation. The institution expects higher oil prices and their downstream impact on resin costs to reach company profit and loss statements over the next few quarters. It forecasts broadly high-single-digit CY26 inflation across major HPC coverage, with CHD likely facing the highest input-cost inflation and KMB closer to mid-single digits because of greater pulp exposure. For CY27, Goldman Sachs expects low-single- to mid-single-digit inflation, moderating meaningfully in 2H27. Companies may respond through productivity programs, revenue growth management and potential additional pricing, but gross margins remain exposed before these actions take hold. For Beverages, Goldman Sachs' tracker previously indicated inflation rebuilding to roughly mid-single digits by the end of CY26; it now forecasts low-double-digit inflation exiting the year. COCO is expected to face the highest CY26 inflation, followed by PRMB. COCO has cited Middle East-related ocean freight, energy and domestic logistics pressure; Goldman Sachs estimates that each 1% increase in its CY26 COGS would add about $5 million of cost, reduce its modeled 39.9% gross margin by roughly 60 basis points, and lower modeled CY26 EPS of $1.95 by roughly 32 basis points. PRMB also faces elevated pressure, while CELH, KO, MNST, SAM and STZ face more modest inflation. BF, PEP, KDP and CCEP appear relatively benign, with favorable cost-basket trends such as coffee improving prior expectations for BF and KDP. The report warns that the temporary benefit from one-time tariff refunds, which muted transportation and logistics costs for some companies in the June quarter, will not continue into 2H26. This creates near-term downside risk to gross margins before mitigation measures gain traction. Consumer demand is also a secondary concern: gasoline above the psychological $4-per-gallon threshold could add pressure to household budgets and lead to demand destruction, particularly among lower-income consumers. Goldman Sachs estimates US household discretionary cash-inflow growth of 3.0% in 2026, with only 50 basis points of growth for the bottom-income quintile; it expects 4.2% growth in 2027 but still expects the lowest-income cohort to lag. To compare company exposure, Goldman Sachs models the hypothetical effect of a 1% increase in COGS relative to its current CY26 assumptions. SAM has the highest EPS sensitivity, with CY26 EPS falling 8.0%, followed by PRMB at 7.1%; TAP, COTY and ODD also show sensitivity above 5%. PM and MO appear the most insulated, with modeled EPS effects of 0.8% and 0.4%, respectively. Goldman Sachs reiterates Buy ratings on PM, MO and MNST, citing their lower EPS sensitivity to the cost headwinds.

Analysis framework

Goldman Sachs begins with the oil, fuel, freight and labor-supply drivers of cost inflation, then uses bottom-up COGS trackers to translate commodity baskets into expected inflation for HPC and Beverage companies. It supplements this with a hypothetical company-level sensitivity test that measures the gross-margin and CY26 EPS impact of a 1% COGS increase relative to existing forecasts.

Methodology notes

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Energy and freight-cost pass-through into Consumer Staples input costs and margins

  The report traces how oil disruption raises gasoline and diesel costs, increases freight and commodity costs such as resins, and ultimately pressures company COGS, gross margins and earnings.

• Industry AnalysisVolume-price decomposition

  Bottom-up COGS inflation tracking

  Goldman Sachs aggregates movements in relevant commodity and logistics inputs to estimate inflation by sector and company, rather than relying only on reported company inflation.

• Other

  Hypothetical COGS sensitivity analysis

  The report estimates the impact on CY26 gross margin and EPS if COGS were 1% higher than its current modeled assumptions, holding other factors unchanged.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• SAM

  Highest modeled EPS exposure to a 1% increase in COGS.

  Weaknesses

  CY26 EPS would decline 8.0% in the hypothetical sensitivity analysis.

  Comparison

  Higher EPS sensitivity than all companies shown in the report's analysis.

  Risks

  Elevated commodity and freight costs could materially pressure earnings.

• PRMB

  Among the most exposed Beverage companies to cost inflation.

  Weaknesses

  CY26 EPS would decline 7.1% for a hypothetical 1% increase in COGS.

  Comparison

  Second-highest EPS sensitivity after SAM; Beverage tracker ranks it behind COCO on CY26 inflation pressure.

  Risks

  Higher input costs could pressure margins and earnings.

• COCO

  Expected to face the highest CY26 Beverage inflation.

  Weaknesses

  A 1% COGS increase would add about $5 million in cost and create roughly 60 basis points of gross-margin pressure.

  Comparison

  Ranked ahead of PRMB on expected CY26 Beverage inflation pressure.

  Risks

  Ocean freight, energy and domestic logistics costs could temporarily pressure 2H gross margins.

• PM

  Relatively insulated from the modeled cost headwind.

  Strengths

  Low modeled EPS sensitivity; Goldman Sachs reiterates its Buy rating.

  Comparison

  A 1% COGS increase implies a 0.8% CY26 EPS impact, among the lowest in the group.

• MO

  Most insulated company in the modeled COGS sensitivity analysis.

  Strengths

  Lowest modeled EPS sensitivity; Goldman Sachs reiterates its Buy rating.

  Comparison

  A 1% COGS increase implies a 0.4% CY26 EPS impact, lower than PM and the broader group.

• MNST

  Beverage company with relatively modest projected inflation pressure.

  Strengths

  Goldman Sachs reiterates its Buy rating and identifies lower EPS sensitivity to cost headwinds.

  Comparison

  Lower projected inflation pressure than COCO and PRMB.

Key data

• Brent crude oilOver $100/bblCompared with low-$70s levels in February.
• US retail gasoline pricesMore than 54% YTD; above $4.00/gallonThe report views the $4-per-gallon level as a potential consumer-pressure threshold.
• US diesel pricesAbout 80% YTD; above $6/gallonA principal driver of elevated freight costs.
• Freight ratesRoughly 80% above 2025 average levelsAlso affected by driver-supply constraints.
• Long-haul truck-driver countNearly 11% below the 2022 peak; roughly 6% below the pre-COVID peakIndicates a structural constraint on freight capacity.
• HPC COGS inflationHigh-single digits in CY26Reverses Goldman Sachs' January forecast of modest deflation.
• Beverage COGS inflationLow-double digits exiting CY26Above the earlier mid-single-digit expectation.
• SAM CY26 EPS sensitivity-8.0%Hypothetical impact of a 1% increase in COGS.
• PRMB CY26 EPS sensitivity-7.1%Hypothetical impact of a 1% increase in COGS.

Impact & implications

The report expects cost inflation to create near-term gross-margin and earnings risk across Consumer Staples, especially where COGS sensitivity is high and mitigating pricing or productivity actions have not yet taken effect. It sees relative insulation for nicotine companies PM and MO, while the pace of cost normalization and consumer recovery remains tied to oil, freight and inflation conditions.

Risks

• Further volatility in the Middle East conflict and Strait of Hormuz oil flows could sustain or worsen oil and commodity-cost pressure.
• Additional driver-supply constraints or CDL-related regulation could further increase freight costs.
• Higher gasoline prices could weaken consumer demand, particularly among lower-income households.
• Cost inflation and freight trends could slow the expected 2027 consumer recovery.

What to watch

• Company commentary during the upcoming CQ3 earnings season on demand, gross margins and earnings effects.
• Oil prices, diesel prices and freight rates, including the persistence of supply-chain disruptions.
• Whether productivity, revenue growth management and additional pricing actions offset COGS inflation.
• The pace of year-on-year cost moderation expected from 2H27.