Kimberly-Clark Trims Yearly Profit Forecast As Costs Rise
Kimberly-Clark Corp. on Tuesday lowered its yearly profit forecast as the maker of Huggies diapers and Kleenex tissues faced higher commodity costs and a stronger dollar.
The Dallas-based company now expects 2018 adjusted earnings of $6.60 to $6.80 per share, down from an earlier estimate of $6.90 to $7.20.
The cost of key raw materials such as pulp should rise to $675 million to $775 million in 2018, Kimberly-Clark said, compared with a previous forecast of $400 million to $550 million.
Besides higher costs, packaged goods companies worldwide have been bruised by stagnant demand from both consumers as well as retailers.
"Our second quarter results reflect a challenging environment, particularly with commodity inflation," CEO Thomas Falk said in a statement.
Personal Care Decline
Sales in Kimberly-Clark's personal care business, the biggest contributor to overall revenue, dipped 1% to $2.26 billion in the second quarter ended 20 June, largely led by lower prices and higher costs.
Quarterly net sales rose 1% to $4.60 billion, but missed Wall Street analysts' average expectation of $4.62 billion, according to Thomson Reuters I/B/E/S.
Net income attributable to Kimberly-Clark fell to $455 million from $531 million a year earlier.
Excluding one-time items, the company earned $1.59 per share, edging past analysts' expectations of $1.57.