Andrex maker Kimberly-Clark notched up its strongest volume growth in five years through the second quarter, leading it to raise its profit forecast for the full year.
Organic sales rose 3.9% driven by 5% volume growth in the three months to 30 June. This helped push up operating profit by 10% to $592m.
The US company now expects annual profits to grow at a “low-to-mid single-digit rate” on a constant currency basis versus last year.
“This was a very active quarter and one of the strongest in our recent history,” said Mike Hsu, chairman and CEO.
“We delivered strong organic sales growth, fuelled by the highest volume growth we’ve achieved in five years.”
The maker of Huggies and Kleenex has broadened its portfolio by offering products at a wide range of price points and introducing features from premium products into other value items.
CFRA analyst Ana Garcia said: “Strong volume demonstrates the effectiveness of KMB’s innovation … with value positioning attracting demand across product tiers.”
The company cut the predicted impact of US tariffs to about $170m for the year year after warning in April that Donald Trump’s taxes on China, in particular, would drive $300m in additional costs and reduce its profits.
While net sales fell 1.6% to $4.2bn in the second quarter, this was primarily due to the divesture of its personal protective equipment business and the exit from its US private label diaper arm.
Kimberly-Clark also sealed a $3.4bn deal to sell a majority stake in its international tissue business to Suzano in June, part of an effort to streamline its business and drive growth in more profitable brands.
As part of this, it is investing $2bn in expanding its US manufacturing capabilities over the next five years. This will be its largest domestic expansion in about 30 years and allow it to speed up plans to develop new products such as nappies with “blowout blockers”.
In its international arm, which includes the UK, net sales grew 0.4% to $1.4bn in the second quarter.
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