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Kimberly-Clark Lifts Annual Forecasts On Price Hikes, Steady Demand

By Reuters
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Kimberly-Clark Lifts Annual Forecasts On Price Hikes, Steady Demand

Kimberly-Clark Corp raised its full-year sales and profit forecasts, as the maker of Kleenex tissues and KleenGuard benefits from price increases and resilient demand for essential products.

Pandemic-induced supply-chain disruptions that was worsened by Russia's invasion of Ukraine crisis fuelled a spike in transportation and raw materials costs, forcing consumer goods companies like Kimberly-Clark and Procter & Gamble to raise prices.

Still, demand for daily use products, particularly in North America, has remained steady even as higher interest rates and rental costs squeezed household income.

Prices across all product categories rose 9% at the Huggies diaper maker, while second-quarter sales volume fell 3%.

Earlier on Tuesday, European consumer goods company Unilever beat quarterly sales estimates after again raising prices to offset higher costs with volumes only dropping 0.3%.

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Quarterly Highlights

Kimberly-Clark saw adjusted gross margin improve by 380 basis points to 34% in the second quarter as the price hikes offset higher input and marketing expenses.

Its adjusted earnings of $1.65 per share, topped analysts' expectations of $1.48, according to Refinitiv IBES data.

Revenue rose 1.4% to $5.13 billion (€4.7 billion), but fell just short of estimates of $5.14 billion.

The company expects full-year organic sales to rise between 3% and 5%, compared with its prior forecast of 2% to 4%.

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Kimberly-Clark expects annual profit to grow between 10% and 14%, compared with its earlier estimate of 6% to 10%.

Chairman and CEO, Mike Hsu said in a statement, "Our growth strategy is working, and given the strength of our first-half results, we're raising our full-year outlook.

"Continued improvement in gross margin positions us well to invest in superior brand value propositions, including innovation and digital leadership, which will help grow our market shares over time and deliver balanced and sustainable growth for long-term shareholder value."

Additional reporting by ESM

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