Kimberly-Clark raises annual profit forecast on higher prices
Adds shares, details from results throughout
July 23 (Reuters) -Kleenex tissue maker Kimberly-Clark KMB.N on Tuesday raised its forecast for full-year profit after beating Wall Street estimates for second-quarter earnings, betting on higher prices and steady demand for its personal care products.
Demand for Kimberly-Clark's products such as skin health and hygiene held steady, on the back of double-digit volume growth in China that helped lift volumes in its personal care business, a major revenue contributor.
The company continues to see resilient purchase patterns and healthy volumes in its product categories without a lot of trade down, Chris Jakubik, head of Kimberly Clark's investor relations told Reuters.
The company's overall volumes in the quarter ended June 30 rose 1%, while its prices were up 2%.
However, the company posted quarterly sales of $5.03 billion, missing analysts' estimates of $5.10 billion as some retailers pared back on orders.
Consumer goods companies have been struggling with increasing competition from private label brands eating into their shelf space at retailers.
"In the second quarter, we had some inventory destocking that actually held back our volume growth in the quarter and in the first half," Jakubik added.
Shares of the company, which maintained its annual organic sales forecast, were down about 3% in early trading.
In North America, the company's sales declined for its consumer tissue and Kimberly-Clark professional businesses.
The company's gross margins for the April-to-June quarter expanded by 290 basis points to 36.9%.
The Huggies diaper maker's quarterly profit of $1.96 per share topped analysts' estimates of $1.71 per share.
The company also expects annual earnings per share to grow at a mid-to-high teens percentage rate, up from the previously expected low-teens percentage rate.
Reporting by Anuja Bharat Mistry in Bengaluru and Jessica DiNapoli in New York; Editing by Shailesh Kuber
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