Kimberly-Clark (K-C) has reported a year-on-year net sales decrease of 2% to $4.6bn in its first quarter 2019 results.
However, operating profit for the period was $655m in 2019 and $247m in 2018.
Net selling prices rose approximately 4% and product mix improved 1%, while volumes fell about 2%.
In North America, organic sales increased 1% in consumer products and K-C Professional. Outside North America, organic sales rose 7% in developing and emerging markets and 1% in developed markets.
Chief executive Mike Hsu said he was “encouraged with our first quarter results”.
He said: “We made excellent progress driving higher selling prices to help offset commodity and currency headwinds.
“We also continued to launch innovations, pursue our growth priorities and invest in our brands.
“We are confirming our previous full-year outlook while we maintain a strong focus on executing K-C Strategy 2022 for long-term success.”
In the consumer tissue segment, first quarter sales decreased 3% to $1.5bn.
Changes in currency rates reduced sales 3%.
Net selling prices increased 6%, while volumes decreased 6% compared to a 7% increase in the base period.
First quarter operating profit of $241m decreased 3% due to “the impact of lower volumes, input cost inflation, other manufacturing cost increases and unfavourable currencies, while results benefited from increased net selling prices and cost savings”.
Sales for the segment in North America decreased 3%, while volumes fell 10% compared to a 9% increase a year earlier due to lower promotion activity and the impact of price increases.
Sales in developing and emerging markets decreased 4%.
Currency rates were unfavourable by 8%, primarily in Latin America.
Sales in developed markets outside North America decreased 5%.
K-C’s previously announced 2018 Global Restructuring Programme is expected to generate annual pre-tax cost savings of $500 to $550m by the end of 2021, driven by workforce reductions along with manufacturing supply chain efficiencies.
As part of the programme, K-C expects to exit or divest “some low-margin businesses” that generate approximately 1% of company net sales.
It said the sales are concentrated in the consumer tissue business segment.
The company continues to target full-year 2019 organic sales growth of 2%.
