Owner of brands like Cottonelle and Kleenex, the American consumer goods multinational Kimberly-Clark reported a net profit of US$ 404 million in the second quarter of 2021. The result reflects a decrease of 41% compared to the same period last year, which was strong in sales of hygiene and cleaning products.
Diluted earnings totaled $1.20 per share. Adjusted earnings were $1.47 per share, below market expectations of $1.71 per share.
The company’s revenue totaled $4.72 billion in the quarter. Although the figure represents a 2% increase year-on-year, analysts had expected revenue of $4.77 billion.
In a statement, the company said it was absorbing higher input costs and seeing a reversal in the consumption of toilet paper and toiletries from last year’s high demand.
“”Our second quarter reflects continued pandemic-driven volatility,” said President Mike Hsu.
Considering higher inflation, rising input costs and lower sales of hygiene products, Kimberly-Clark reduced its earnings projections for 2021. Now, adjusted net income is expected to stay in a range between $6.65 and $6.90 per share, down 2% from previous projections of earnings between $7.30 and $7.55 per share, with organic sales growth of 1%.
The annual net revenue growth target has been adjusted to a range of 1% to 4%, against a previous forecast of a 3% to 5% increase.
Raw material costs are expected to increase from $1.2 to $1.3 billion – the previous estimate was $900 million to $1.05 billion but has been readjusted due to higher prices for raw materials, based on polymers and cellulose.