Kimberly-Clark flags potential $170 million cost impact from higher oil prices
By Anuja Bharat Mistry and Alexander Marrow
April 28 (Reuters) - Kimberly-Clark warned on Tuesday that persistently higher oil prices could add up to $170 million in costs in the second half of the year, but kept its annual forecast unchanged as demand for its personal care products held up.
The warning echoes concerns across the consumer goods sector, with peers, including Procter & Gamble, flagging rising input costs as the Middle East conflict drives up oil prices.
"If oil prices were to persist at the $100-per-barrel level for the duration of the second half, we could see additional gross input cost inflation in the range of $150 (million) to $170 million," Kimberly-Clark's Chief Financial Officer Nelson Urdaneta said in prepared remarks.
The potential impact is not reflected in the company's current outlook, and that management is evaluating mitigation measures, he said.
The Huggies maker said it expects a $50 million hit in the second quarter from a fire at a distribution center in California, alongside additional costs related to the conflict.
Kimberly-Clark, which is on track to close its $40 billion acquisition of Tylenol-maker Kenvue in the second half of 2026, weathered a demand slowdown and intense competition thanks to volume growth from product launches and a broader range of affordable offerings.
"Kimberly-Clark appears to be better positioned than some of its peers as its transformation has momentum from its focus on value across their good, better, best tiers," said Brian Mulberry, chief marketing strategist at Zacks Investment Management.
The company expects fiscal 2026 organic sales growth to be in line to ahead of the weighted average growth in the categories and markets it competes in, which for the latest 12 months grew at about 2.5%. It also maintained its annual adjusted profit forecast.
Its shares were up about 1% after it beat first-quarter sales estimates.
Kimberly-Clark reported sales of $4.16 billion, surpassing analysts' average estimate of $4.09 billion, according to data compiled by LSEG.
It posted a quarterly adjusted profit of $1.60 per share, down from $1.62 a year ago, pressured by price cuts and investments in product innovations.
(Reporting by Anuja Bharat Mistry in Bengaluru and Alexander Marrow in London; Editing by Shilpi Majumdar and Devika Syamnath)