Kimberly-Clark forecast annual adjusted profit growth ahead of Wall Street estimates and reported better-than-expected quarterly sales on Tuesday as the Kleenex tissue maker benefited from a recovery in demand.
The company has let go of its private label diaper-making business and has chosen instead to invest in marketing and advertising of its own brands such as Huggies.
While Kimberly-Clark has tempered price hikes, much like other consumer goods companies, volumes recovered in the fourth quarter and rose 1.5%, while prices increased 0.6%.
The company’s quarterly net sales of $4.93 billion beat the average analyst estimate of $4.86 billion, according to data compiled by LSEG.
The results were in line with those from consumer goods bellwether Procter & Gamble, which beat quarterly profit and sales estimates on resilient demand in the United States, as well a recovery in China.
Kimberly-Clark has also maintained a tight lid on operating costs, helping gross margins rise 50 basis points, compared with last year on an adjusted basis, despite higher manufacturing and supply chain costs in the quarter.
Annual adjusted earnings per share are expected to rise by a mid-to-high single-digit percentage on a constant-currency basis, compared with estimates of a 3.2% increase to $7.58 per share.
Volumes in Kimberly-Clark’s North America business grew 1.9% in the quarter ended Dec. 31.
On an adjusted basis, the company earned $1.50 per share, compared with estimates of $1.51.
(Reporting by Juveria Tabassum and Neil J Kanatt in Bengaluru and Jessica DiNapoli in New York; Editing by Shounak Dasgupta)
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