(Reuters) – Kimberly-Clark raised annual sales and profit forecasts on Tuesday after topping first-quarter expectations, banking on higher pricing and robust demand for its premium personal care and household products in North America.
Top consumer goods companies have been increasing prices since the pandemic to counter escalating costs, which are now easing from their peaks, leading to intensified competition from budget-friendly brands as shoppers seek better value.
Kimberly-Clark said it was sustaining the momentum in premium products within its personal care division. Overall, the company’s volumes rose by 1% while prices saw 4% growth in the quarter, with minimal consumer trade-down.
The results mirror wider market conditions, as larger rival Procter & Gamble recently raised its annual profit forecast on lower commodity costs and consumer demand for its pricey Tide detergent and Dawn dish soap.
Demand for household and personal care products has remained resilient, with consumers stocking up on surface cleaning agents, disinfectants and paper napkins.
The Kleenex parent reported quarterly net sales of $5.15 billion, while analysts on average had expected sales of $5.09 billion, according to LSEG data.
In March, the company announced that it planned to reorganize its business into three units to streamline operations and cut costs.
Excluding items, Kimberly-Clark earned $2.01 per share in the first quarter, while analysts were expecting $1.63 per share.
The company now sees 2024 organic sales growing in a mid-single-digit percentage, compared to its previous forecast for a low to mid-single-digit rise.
It expects adjusted profit to grow at a low-teens percentage rate on a constant-currency basis, up from high single-digit growth expectations previously.
(Reporting by Annett Mary Manoj in Bengaluru; Editing by Milla Nissi)
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