Kimberly-Clark (KMB, Financial), known for its Kleenex tissues, has significantly lowered its annual profit forecast, citing increased supply chain costs due to widespread trade tariffs imposed by U.S. President Donald Trump. The company now anticipates flat or slightly positive adjusted earnings per share for 2025, in constant currency, compared to its previous mid to high single-digit growth forecast. This announcement led to a 3% drop in pre-market trading for KMB.
CEO Michael Hsu noted that the current environment will elevate global supply chain costs compared to earlier expectations. However, he expressed confidence in the company's ability to offset these costs over time. The tariffs on goods from major U.S. trade partners are expected to result in higher prices for American consumers.
Kimberly-Clark, which sells products like sanitary napkins, diapers, and baby wipes, reported a 3.9% revenue decline in its largest North American segment due to price cuts and slowing demand. International personal care sales plummeted by 8.9%. The company has exited the U.S. private-label diaper business to focus on core personal care technologies. A recent business restructuring aimed to control costs.
For the quarter ending March 31, sales dropped 6% to $4.84 billion, missing analyst expectations of $4.88 billion. Adjusted earnings per share were $1.93, surpassing the anticipated $1.89. Kimberly-Clark's results provide insight into the impact of the global trade tensions on the consumer goods sector, with industry leader Procter & Gamble set to report earnings soon.
