Kimberly-Clark sales hit tough retail conditions and strong dollar
Sales fell from $4.81bn to $4.49bn during the period, off-setting organic sales growth of 3 percent – a figure that met market expectations from financial analysts on Wall Street.
Sales in the company’s personal care division fell by 3.4 percent, from $2.05bn in the corresponding quarter last year, to $1.97bn for the current quarter – a figure that reflected a marked downturn for the company’s baby personal care division.
North America outshines Europe
Breaking down the performance for personal care on a regional basis, sales climbed in the North American region climbed 2 percent, reflecting increased net selling prices and an improved product mix.
In contrast, sales of personal care products in Europe fell by 22 per cent, reflecting a 19 percent impact from weak European currency exchange rates, combined with a 3 percent dip in sales volumes.
The company said that the organic sales growth was driven by a 6 percent increase in net selling prices, which was partially offset by a decrease of 3 percent in sales volumes.
Gains from developng markets
But despite the poorer performance in developed markets, the company did point out that gains from developed markets contributed to a positive sales growth of approximately 3 percent.
Net profits were directly impacted by the dip in sales, falling 9 percent from $441m in the corresponding quarter last year, to reach $407m for the current quarter.
"Business conditions in the first quarter proved to be somewhat more challenging than we predicted earlier this year, with significant headwinds from weak global economies and volatile currency fluctuations impacting our results,” said Chairman and Chief Executive Officer Thomas J. Falk said.
Developing markets continue to flourish
However, Falk also reiterated hopes that the company will continue to flourish in developing markets as well as underlining the fact that the company’s strong cash flow is continuing to improve working capital.
In view of the falling sales and profits, the company said that it was standing by existing forecasts for the full year, reaffirming that it expects net profit to drop by 6 – 8 percent and full year sales to be in the region of $17.86bn - $18.25bn.
This figures compares to full year sales of $18.43bn in 2008.
