Kimberly-Clark (K-C) has reported second quarter sales of $1.5bn for its consumer tissue segment, a decrease 8% year-on-year.
The tissue giant explained the result on currency rates that were “unfavourable by 9% and net selling prices were down 2% while volumes were up 3%”. However, the division’s second quarter operating profit of $260m increased 8%. It benefited from “cost savings, lower manufacturing-related costs and reduced marketing, research and general expenses, partially offset by unfavourable currencies and lower net selling prices.”
Sales in North America were even with the year-on-year period and volumes increased 5%.
Volumes rose high-single digits in bathroom tissue, with benefits from increased promotion shipments on Cottonelle. Volumes increased low-single digits in facial tissue and paper towels.
Sales in developing and emerging markets decreased 20% including a 23 point negative impact from currency rates.
Net selling prices increased 2% and volumes advanced 1%
Sales in developed markets outside North America decreased 13% driven by unfavourable currency rates.
As a group, the company reported second quarter 2015 net sales of $4.6bn that decreased 6% compared to the year-ago period, a result of changes in foreign currency exchange rates which reduced sales 10%.
Organic sales rose 4% including a 10% increase in developing and emerging markets.
Chairman and chief executive Thomas J. Falk said: “We continue to execute our Global Business Plan strategies well.
“In the second quarter, we delivered mid-single digit growth in organic sales and adjusted earnings per share from continuing operations. We also achieved significant cost savings and improvements in adjusted gross and operating margins.
“In addition, we made further progress with targeted growth initiatives, launched product innovations and allocated capital in shareholder-friendly ways. In terms of our full-year earnings outlook, we are raising the low end of our previous guidance by 5 cents per share.
“This reflects our strong performance in the first half of the year, additional cost savings and more investments behind our brands and growth initiatives than we previously planned. We continue to be optimistic about our prospects to generate attractive returns to shareholders.”
