Kimberly-Clark’s Second-Quarter Organic Sales Rise Amid Lower Prices
Kimberly-Clark’s second-quarter organic sales rose as the Kleenex tissue maker recorded its best volume growth in five years amid lower prices, sending its shares up nearly 5% in premarket trading on Friday.
Expanding Portfolio to Capture Demand
The Dallas-based firm has broadened its portfolio to offer products from budget to premium price tiers, in an effort to capture demand across income levels and combat competition from rivals such as Procter & Gamble.
“In this challenging consumer environment, we believe it’s important to meet consumers where they need us,” said CEO Mike Hsu in a statement. “We’ve adjusted some entry price points, and more importantly, we’re cascading features from our premium offerings into our value offerings.”
Annual Profit Forecast Raised
The Huggies diaper maker also raised its annual profit forecast.
Business Briefing
Quarterly Sales Performance
Organic sales for the quarter ended June 30 were up 3.9%, driven by 5% growth in overall volumes. Prices were 1.2% lower than last year.
Streamlining Business Operations
The company has also been streamlining its business to control costs and drive growth in more profitable brands. In June, it struck a $3.4 billion deal to sell a majority stake in its international tissue business to Brazilian pulp maker Suzano.
Net sales from continuing operations, which exclude the divested unit, came in at $4.16 billion, down 1.6% from last year.
Impact of Tariff-Related Costs
Kimberly-Clark estimates full-year incremental tariff-related costs at about $170 million. It had warned of $300 million in additional costs earlier in April, primarily due to levies on China that have since come down.
It now expects adjusted earnings per share attributable for 2025 to grow at a low-to-mid single-digit rate, compared with an earlier forecast for flat-to-positive growth on a constant-currency basis.
The profit forecast still includes the International Family Care and Professional business until the close of the joint venture deal with Suzano in midyear 2026, Kimberly-Clark said.
– Savyata Mishra and Neil J Kanatt for Reuters
Conclusion
In conclusion, Kimberly-Clark’s second-quarter organic sales rose amid lower prices, driven by a 5% growth in overall volumes. The company has been streamlining its business operations to control costs and drive growth in more profitable brands. With a raised annual profit forecast, Kimberly-Clark is poised for growth in the coming year.
Frequently Asked Questions
Q: What was the growth rate of Kimberly-Clark’s second-quarter organic sales?
A: The growth rate of Kimberly-Clark’s second-quarter organic sales was 3.9%, driven by a 5% growth in overall volumes.
Q: Why did Kimberly-Clark’s shares rise in premarket trading on Friday?
A: Kimberly-Clark’s shares rose nearly 5% in premarket trading on Friday due to the company’s strong second-quarter sales performance and raised annual profit forecast.
Q: What is Kimberly-Clark’s strategy to capture demand across income levels?
A: Kimberly-Clark has broadened its portfolio to offer products from budget to premium price tiers, in an effort to capture demand across income levels and combat competition from rivals such as Procter & Gamble.
Q: What is the expected impact of tariff-related costs on Kimberly-Clark’s full-year earnings?
A: Kimberly-Clark estimates full-year incremental tariff-related costs at about $170 million, which is lower than the earlier forecast of $300 million.
