Huggies nappy maker Kimberly-Clark topped analysts’ estimates for third-quarter sales on Thursday, as inflation-weary consumers gravitated toward its affordable staples.
The company’s shares, which have lost nearly 11 per cent of their value this year, were up about 4 per cent in early trading.
With inflation still running high, shoppers have switched to cheaper private-label goods for everyday items such as groceries and paper towels, skipping costlier branded products.
The Dallas-based consumer goods company has tweaked entry-level price points and blended features from its premium products into lower-tier offerings, in a bid to retain cost-conscious consumers, executives said in August.
Kimberly-Clark’s overall volumes jumped 2.4 per cent in the third quarter, while prices dipped 0.2 per cent from a year ago.
Its organic sales jumped 2.7 per cent in North America, along with a 2.1 per cent growth in its international personal care division.
The Kleenex tissue maker has in the past two quarters warned about steep US import duties, especially on Chinese goods, weighing on its margins.
Its adjusted gross margin shrank 170 basis points in the quarter, hurt by higher costs tied to tariffs, pricing actions and efforts to offer better value across its portfolio.
Kimberly has been restructuring its business to control expenses and simplify its operations. In June, it inked a US$3.4 billion deal to sell a majority stake in its international tissue business to Brazilian pulp maker Suzano.
It posted net sales of US$4.15 billion for the three months ended September 30, compared with analysts’ average expectation of $4.12 billion, according to data compiled by LSEG.
Quarterly profit came in at $1.82 per share on an adjusted basis, beating estimates of $1.76.
The company expects 2025 organic sales growth to be in line with the roughly 2 per cent average growth seen across the categories and markets it competes in, a step down from its August forecast, when it anticipated outperforming those benchmarks.
- Reporting by Savyata Mishra in Bengaluru; Editing by Shreya Biswas, of Reuters.
