Kimberly-Clark (KMB) reported better-than-expected first-quarter results and maintained its full-year outlook Tuesday, while the consumer goods maker flagged potential incremental input cost headwinds of up to $170 million in the second half due to elevated oil prices.
The Kleenex tissues maker's adjusted earnings attributable to the company rose to $1.97 a share for the March quarter from $1.93 a year earlier, which was the consensus on FactSet. Net sales improved 2.7% to $4.16 billion, topping the Street's view for $4.09 billion.
The company's shares were up 1.1% in Tuesday afternoon trade. So far this year, the stock has lost 1.6% in value.
Kimberly-Clark said it continues to expect full-year adjusted EPS from continuing operations to grow at a double-digit rate, while adjusted EPS attributable to Kimberly-Clark are still seen flat, both on a constant-currency basis.
The company also continues to expect 2026 organic sales to grow in line to ahead of the weighted average growth in the categories and countries it competes, which for the latest 12 months grew at roughly 2.5%, it said.
Kimberly-Clark could face gross incremental input cost headwinds of between $150 million and $170 million in the second half of the year, if oil prices stay at the $100 a barrel level, Chief Financial Officer Nelson Urdaneta said in prepared remarks on the company's website.
Energy prices have soared following the US-Israel war with Iran that started at the end of February, with the Strait of Hormuz -- the world's most important chokepoint for crude flows -- effectively closed. The conflict paused following a recent ceasefire between the US and Iran and later between Israel and Lebanon.
Kimberly-Clark's first-quarter international personal care business revenue climbed 9.1% to $1.51 billion, buoyed by organic sales growth of 4% and favorable currency impacts. Sales in North America fell 0.6% to $2.65 billion, driven by a 2.7% headwind from the exit of the company's private label diaper business in the US, partially offset by organic sales growth of 1.8%.
"We continued to deliver solid volume-plus-mix performance while building share momentum despite continued geopolitical and macroeconomic uncertainty," Chief Executive Mike Hsu said in a statement. "We continue to generate meaningful cost savings that reinforce our strong financial foundation and enable us to invest in our exciting future."
For the second quarter, Kimberly-Clark expects to incur a $50 million headwind related to a recent fire at its Ontario, California, distribution center, "as well as some incremental costs due to the conflict in the Middle East," Urdaneta said. "We expect to fully mitigate these costs in the second half of the year with the many levers available within our integrated margin management capabilities."
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