Key insights
- Kimberly-Clark beat Q1 sales estimates due to resilient consumer spending and lower prices, maintaining its 2026 outlook. Organic sales rose 2.5%, driven by volume growth. However, margins contracted due to price declines and investments. The company expects double-digit EPS growth. This indicates continued, albeit moderate, strength in the consumer staples sector, providing a slightly positive signal for the broader market.
April 28 (Reuters) - Kimberly-Clark kept its annual forecast intact and beat first-quarter sales estimates on Tuesday, as lower prices at the Kleenex tissue maker helped draw budget-strained consumers amid persisting geopolitical and macroeconomic uncertainties.
The company, which expects to close its $40 billion acquisition of Tylenol-maker Kenvue in the second half of 2026, joined larger rival Procter & Gamble in pushing through a demand slowdown and intense competition, supported by strong volume growth from new launches and broader affordable product lines.
Kimberly-Clark's prices were down 0.5% during the quarter ended March 31, while organic sales rose 2.5%. That was driven by 2.6% growth in overall volumes as consumer spending remained resilient in personal care and hygiene categories.
The Huggies diapers maker expects fiscal 2026 organic sales growth to be in line to ahead of the weighted average growth in the categories and markets it competes in, which for the latest 12 months grew at about 2.5%.
It continues to expect adjusted earnings per share to grow in double digits on a constant-currency basis.
The Dallas-based company posted first-quarter sales of $4.16 billion, surpassing analysts' average estimate of $4.09 billion, according to data compiled by LSEG.
Margins, however, came under pressure from a sequential decline in prices and investments related to product innovations as well as supply chain, blunting the impact of earlier cost reductions such as job cuts and selling less profitable businesses, including private-label diaper and personal protective equipment segments.
Quarterly adjusted gross margin contracted 60 basis points to 37.9%.
(Reporting by Anuja Bharat Mistry in Bengaluru and Alexander Marrow in London; Editing by Shilpi Majumdar)