Kimberly-Clark Corp. on Tuesday said sales fell a
higher-than-expected 4% in the March quarter, as the consumer goods
company struggles with currency volatility and increased
competition in its diapers segment.
Despite the drop, results still beat Wall Street
expectations.
The maker of Huggies diapers has struggled in recent quarters as
parents have skewed to the high and low ends of the price spectrum.
The trend has played into the hands of rival Procter & Gamble
Co., whose premium Pampers and low-end Luvs are gaining share.
Kimberly-Clark is also facing new competition from P&G's
adult incontinence products and Japan's Unicharm Corp., which is
starting to sell pull-up diapers in Brazil. Both threaten
Kimberly-Clark's leading positions in the segments.
In the latest quarter, sales at the personal-care segment--which
includes Huggies and is the largest segment by revenue--fell 3.1%
to $2.31 billion, weighed by currency rates. Sales in North America
fell 2% in the segment, hurt by lower volumes for Pull-Ups training
pants and Huggies diapers.
Overall, Kimberly-Clark posted earnings of $468 million, or
$1.27 a share, down from $538 million, or $1.41 a share, a year
earlier.
Excluding a charge related to balance-sheet remeasurement in
Venezuela and other items, per-share earnings from continuing
operations were $1.42.
Sales fell to $4.69 billion from $4.89 billion. Foreign exchange
rates accounted for a 9% drop.
Analysts polled by Thomson Reuters had forecast per-share
earnings of $1.33 a share on revenue of $4.61 billion.
Organic sales, which exclude foreign currency fluctuations and
other adjustments, increased 5%, driven by a 11% gain in developing
markets.
Sales at the consumer-tissue segment--which includes Cottonelle
and Kleenex--fell 6.8% to $1.57 billion.
The company reaffirmed its 2015 guidance.
Shares, inactive premarket, have been down about 7% this year
through Monday's close.
Write to Angela Chen at angela.chen@dowjones.com
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