Kimberly-Clark Lowers Guidance as Sales Slip

Kimberly-Clark Corp. lowered its guidance Monday, sending shares lower as third-quarter organic sales were flat and currency rates continued to hurt the top line.

The maker of Kleenex tissues and Huggies diapers dropped its current-year forecast for organic sales growth, a metric that excludes the impact of foreign currency rates, to 2% compared with its previous expectation of growth between 3% and 5%. The company also narrowed its earnings guidance to $5.95 to $6.05 per share compared with the previous range of $5.95 to $6.15.

Dallas-based Kimberly-Clark reported that organic sales increased 3% in developing and emerging markets but decreased in all other markets, making growth flat companywide for the quarter.

Foreign currency rates reduced sales by more than 2% in the quarter.

Kimberly-Clark, like other consumer product rivals, had targeted emerging markets, such as Venezuela and Russia, to help counter sluggish growth in developed markets. But higher inflation and political turmoil have challenged operations, even causing some plants to halt production entirely.

Over all for the quarter, Kimberly-Clark reported a profit of $550 million, or $1.52 a share, up from $517 million, or $1.41 a share, a year earlier. Excluding certain charges, earnings were $1.52 a share compared with $1.51 a share last year. Revenue fell 2.6% to $4.59 billion.

Analysts polled by Thomson Reuters had forecast earnings of $1.54 on $4.73 billion in revenue.

Gross margin rose to 36.4% from 35.7%.

Shares fell 3.9% to $114.88 in premarket trading. The stock has fallen 11% in the past three months through Friday's close.

Write to Imani Moise at [e-mail]

(END) Dow Jones Newswires

October 24, 2016 09:05 ET (13:05 GMT)

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