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A-Brands

Kimberly-Clark Posts First-Quarter Sales Of $5.1bn

Hygiene products producer Kimberly-Clark has reported a 7% year-on-year increase in net sales to $5.1 billion (€4.8 billion) in the first quarter of its financial year.

Organic sales increased 10% as net selling prices rose 6%, volumes grew 2%, and product mix increased sales by 2 points, the company noted.

Commenting on the company's performance, Mike Hsu, chairman and CEO of Kimberly-Clark, said, "I'm pleased with our team's continued excellent execution during this volatile and highly inflationary environment.  We delivered double-digit organic sales growth with strong increases across all our segments in the first quarter."

"Our growth strategy is working and we're continuing to invest in our business.  Additionally, we continue to take the necessary actions to mitigate macro headwinds and remain committed to improving our margins over time."

First-Quarter Highlights

In North America, organic sales increased 13% in consumer products category, while K-C Professional posted 5% growth.

Outside North America, organic sales rose 10% in developing and emerging markets and 8% in developed markets.

Adjusted operating profit amounted to $629 million (€597.1 million) during the quarter, compared with $804 million (€763.2 million) in the same period last year.

The company's performance was impacted by higher input costs, driven by pulp and polymer-based materials, distribution, and energy costs.

Higher costs from increased marketing and research, as well as general expense and the impact of unfavourable foreign currency transaction effects reduced operating profit in the quarter, the company added.

However, Kimberly-Clark benefited from organic sales growth, $50 million (€47.5 million) of cost savings from the company's FORCE (Focused On Reducing Costs Everywhere) programme, and lower other manufacturing costs.


Segment Breakdown

The company's personal care segment generated first-quarter sales of $2.7 billion (€2.6 billion), marking an increase of 11%.

Net selling prices in the division increased by 8%, volumes grew 3%, and product mix improved 3 points.

The consumer tissue business saw sales of $1.6 billion, representing an increase of 4%.

The division's first quarter operating profit dropped 36%, to $171 million (€162.3 million), due to input cost inflation and higher marketing, research, and general spending.

K-C Professional saw first-quarter sales of $0.8 billion, up by 4% compared to the same period last year.

Operating profit amounted to $90 million, down 29% year on year, impacted by input cost inflation and higher marketing, research, and general spending.

2022 Outlook

Kimberly-Clark now expects full-year 2022 organic sales growth in the range of 4% to 6%, up from its previous guidance of 3% to 4%.

Operating profit outlook has been adjusted for the net benefit from the acquisition of controlling interest in Thinx, which operates in the reusable period and incontinence underwear category, the company noted.

It expects higher organic sales to benefit operating profit.

Key cost inputs are expected to rise from $1.1 billion (€1.04 billion) to $1.3 billion (€1.23 billion), impacting the company's profits.

© 2022 European Supermarket Magazine – your source for the latest A-Brands news. Article by Conor Farrelly. Click subscribe to sign up to ESM: European Supermarket Magazine.

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