3 Companies With Room to Pass on Costs to Manage Inflation

Key Points

• Rising inflation in September 2026 pushed up costs for many companies, though some have pricing power to offset the impact.
• WD-40 and Balchem both posted strong sales and earnings growth despite margin pressure, supported by premium and innovative product demand.
• Interparfums faces shrinking operating margins from higher costs but may benefit from loyal luxury customers willing to pay premium prices.

Despite the Federal Reserve's decision to raise interest rates in September 2026, inflation crept up again that month, with the Consumer Price Index rising 0.6% compared to 0.4% in August. Not all goods—and therefore not all companies—will experience the same impact, and energy and gasoline prices have been among the fastest to rise. The essential nature of these products means that many firms face rising costs even if their own prices have not increased at the same pace.

A natural step for a company in this situation is to increase the prices of its offerings to offset some or all of those added costs. However, after an already prolonged period of inflation, consumers are highly sensitive to further price increases. Still, some firms may have the flexibility to pass along more of their costs to customers, either because of the essential or unique nature of their goods, the loyalty of their customer base, or the fact that their prices have not yet risen at the same pace as those of competitors.

WD-40 Leads With Specialized Products That Command Premium Pricing

Known for its popular water-displacing spray and lubricant of the same name, the WD-40 Company NASDAQ: WDFC provides a range of products for specialized maintenance and cleaning applications. According to its latest earnings report, WD-40 experienced a decline in fourth-quarter gross margin due to rising raw material costs, adding pressure to its margin outlook.

At the same time, the company's sales volumes have remained robust, both domestically and abroad. Last quarter, WD-40 Specialist sales in the Americas climbed by 7% year over year (YOY), and consolidated net sales increased by 8% over the same period. Some of this success may be due to the company's efforts to develop differentiated premium products for specific customer needs.

This combination of sales momentum, brand recognition, and niche products meeting proven customer needs gives WD-40 the flexibility to adjust pricing to help counter the margin pressure it has experienced. In particular, the firm's premium Smart Straw and EZ Reach products saw combined sales growth of 17% year over year in fiscal 2026.

Analysts remain generally favorable toward WDFC shares, with a consensus rating of Moderate Buy. MarketBeat's consensus price target suggests approximately 45% potential upside, even after the stock's gains this year. WD-40's accelerating share buybacks could provide additional support for long-term investors.

Balchem's In-Demand Products Generate Robust Results Across Multiple Fronts

Balchem Corp. NASDAQ: BCPC makes specialty nutrients for use in dietary supplements, pharmaceuticals, and food and beverage applications, among other products. In its Q3 2026 earnings report, the company demonstrated resilience despite inflation, with a 9% YOY increase in net sales and a 16% improvement in net earnings over the same period, both beating analyst expectations.

For Balchem, continued success comes in part from its evolving product lineup, including a pipeline of innovative nutrition products backed by strong demand. All three of the company's reporting segments achieved YOY growth in the quarter, indicating its business remains stable despite rising costs.

One area that may be less appealing to income-focused investors is the firm's dividend, which has a relatively modest dividend yield of approximately 0.55%. At the same time, Balchem has repurchased $127 million in shares over the last year, so the company remains conscious of ways to boost shareholder value.

Analysts view BCPC shares favorably, with a large majority rating the stock a Buy and giving a consensus price target 14% above current trading levels, even after shares have already risen by more than 14% year to date.

Interparfums Capitalizes on Luxury Cache

A provider of fragrances and beauty products, Interparfums Inc. NASDAQ: IPAR holds licensing agreements with a variety of international luxury brands. Like the companies above, Interparfums has faced pressure from increased expenses, in this case related to marketing, logistics, tariffs, and royalties. Operating margin fell to 17.9% from 20% for the first half of 2026.

Some luxury brands have bucked the trend for retail companies more broadly, seeing continued interest and even rising demand and sales as loyal customers are willing to pay more for products they recognize and trust.

Interparfums may benefit from that dynamic, with additional buffer provided by the fact that its clients are not individual consumers but rather high-end department stores, online retailers, and specialty perfume and beauty stores.

Interparfums is also helping to offset costs through other measures, including implementing cost-efficiency initiatives, pricing adjustments, and tariff refunds.