Several firms preannounce their price increases with the expectation that investors will evaluate such announcements positively. In this study, the authors present the first systematic empirical examination of investors’ evaluations of 265 price-increase preannouncements (PIPs). Results show that whereas the average increase in abnormal returns following a PIP is .41%, almost 42% result in negative abnormal returns. To examine this heterogeneity, the authors propose a conceptual framework that focuses on two key attributes of a PIP, the magnitude of the preannounced price increase and it’s time to implementation. Consistent with the proposed hypotheses, results show that magnitude has a significant positive impact on abnormal returns. In contrast, time to implementation not only has a significant negative impact on abnormal returns, it also weakens the positive impact of magnitude. Results also show that the main effects of magnitude and time to implementation are moderated both by how the PIP is presented and by the preceding PIP behaviour of the firm and its competitors.