North American Tissue News

Drop in toilet paper demand leads to declining Kimberly-Clark sales

In North America, the company's largest market, sales fell 14%.

Recently Kimberly-Clark Corp. reported a drop in sales hit by supply-chain disruptions, continued business shutdowns and fallout from last year’s toilet paper hoarding amid the pandemic.

The Dallas-based consumer goods maker said in its first quarter results report that tissue sales were down 12% to $ 1.5 billion. In North America, the company’s largest market, sales fell 14%. Kimberly-Clark’s consumer tissue unit, which includes the Scott, Cottonelle and Viva brands, accounted for 32% of all revenue.

In the company’s first quarter earnings conference call that took place last Friday, KC CEO Michael Hsu said, “we expected a consumer destocking to occur, but didn’t expect that it would happen as quickly as it appears to be happening.”

After consumers stock up on products, toilet paper purchases plummeted in the U.S.. According to The Wall Street Journal, toilet paper sales in January were 4.3% lower than in the same month of 2020.

Last year the demand for toilet paper and consumer goods skyrocketed with the waves of panic buying and, as a result, the company’s tissue segment saw a 14% increase in sales during 2020, while sales in North America increased 21%.

Kimberly-Clark predicts that organic sales will remain stable at up to 1% this fiscal year, after previous growth of up to 2%, and also reduced its outlook for adjusted earnings per share to a range of between $ 7.30 and $ 7.55, from $ 7.75 to $ 8. The new perspective comes with the premise that volumes will be lower and net selling prices will increase.

In March, Kimberly-Clark announced price raising “across a majority of its North America consumer products business” to help offset “significant commodity cost inflation.” The percentage increases are in the mid-to-high single digits and nearly all the increases will be effective in late June.

Fox Business
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