Kimberly-Clark Lowers Outlook After Panic Paper Buying Ends
By Dhirendra Tripathi
Investing.com – Kimberly-Clark (NYSE:KMB) stock traded flat Friday after the paper products maker forecast a lower outlook now that the elevated consumption of pandemic times has returned to more normal levels.
The company lowered its forecast for the year, citing “significantly higher input cost inflation and lower sales volumes, partially offset by additional cost savings and reduced discretionary spending.' The stock nudged up 0.1% in early afternoon trading.
Higher costs of raw materials and less binge buying by consumers hurt the maker of Kleenex tissues in the second quarter. At-home consumption fell as the economy reopened and the need to stock up more than needed withered.
Consumption of hygiene products like tissues had jumped to record levels during the pandemic due to a combination of panic buying and consumer focus on cleanliness.
Net income fell 41% to $404 million with net sales growing a mere 2% to $4.72 billion.
Diluted earnings per share fell 40% to $1.19.
Both EPS and revenue came below the analysts’ expectation of $1.74 and $4.78 billion, respectively.
The company now sees full-year 2021 organic sales flat to 2% lower and adjusted earnings per share of $6.65 to $6.90.
The prior outlook was for organic sales growth of up to 1% and adjusted earnings per share of $7.30 to $7.55.
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