Kleenex tissue maker Kimberly-Clark’s sales jump on strong volumes

Boxes of Kleenex tissues are displayed in a pharmacy, Monday, April 19, 2021 in New York. (AP Photo/Mark Lennihan)

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 about six per cent on Friday.

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 fend off 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.

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“We’ve adjusted some entry price points, and more importantly, we’re cascading features from our premium offerings into our value offerings.”

The Huggies diaper maker also raised its annual profit forecast.

Organic sales for the quarter ended June 30 were up 3.9 per cent, driven by a five per cent growth in overall volumes.

“Strong volume demonstrates the effectiveness of KMB’s innovation ... with value positioning attracting demand across product tiers,” said CFRA analyst Ana Garcia.

Prices were 1.2 per cent lower than last year.

Kimberly-Clark on Friday estimated full-year incremental tariff-related costs at about US$170 million. It had warned of US$300 million in additional costs earlier in April, primarily due to U.S. President Donald Trump’s levies on China. Those duties 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.

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The profit forecast still includes the International Family Care and Professional business until the close of the joint venture deal with Brazilian pulp maker Suzano in mid-year 2026, the company said.

In June, Kimberly struck a US$3.4 billion deal to sell a majority stake in its international tissue business to Suzano, as part of efforts to streamline its business to control costs and drive growth in more profitable brands.

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Reporting by Savyata Mishra and Neil J Kanatt in Bengaluru; Editing by Devika Syamnath and Sriraj Kalluvila