Kimberly-Clark achieved its largest organic volume growth in five years in this year’s second quarter. The producer of brands such as Kleenex and Huggies benefited from lower prices and an adjusted product range.
Flexibility
In April, May and June, Kimberly-Clark’s organic sales grew by 3.9 % compared to the same period last year. The number of products sold increased by 5 %. At the same time, prices were on average 1.2 % lower than last year, a strategic choice aimed at appealing to consumers across various income groups.
CEO Mike Hsu says this approach underscores the importance of flexibility: “In this challenging consumer environment, we believe it’s important to meet consumers where they need us. We’ve adjusted some entry price points, and more importantly, we’re cascading features from our premium offerings into our value offerings.” The company focuses on offerings for both price-sensitive and demanding customers, aiming to compete with players like Procter & Gamble.
Import Tariffs
Kimberly Clark is also more optimistic about the additional costs that will arise from the United States’ new import tariffs on Chinese products: these are now estimated at around 170 million dollars (150 million euros), whereas the company had anticipated almost double that sum in April.
In June, Kimberly-Clark reached an agreement to sell a 51 % stake in its international tissue operations to Brazilian company Suzano for 3.4 billion dollars (3.1 billion euros). With this transaction, the company aims to control costs and focus more on profitable brands in the US market.
