Kimberly-Clark’s 4Q profit rises 17%

  • Associated Press
  • Friday, January 22, 2010 8:26pm
  • Business

MILWAUKEE — The sluggish retail environment — with shoppers spending sparingly and retailers focusing on top sellers — coupled with fluctuating production costs is forcing Kimberly-Clark Corp. to make cautious predictions for 2010.

The maker of Kleenex, Huggies and Scott paper towels, which has a tissue mill and a pulp mill in Everett, reported Friday that its fourth-quarter profit rose 17 percent, but the results fell short of analyst predictions.

The company said promotions it launched to keep consumers spending cut into profits and it’s likely the trend will continue in 2010, in which the company predicts a “slow and modest economic recovery.”

Overall, Kimberly-Clark has been weathering the recession well, analysts say, by raising prices as far back as 2008 to account for rising costs for key components like pulp. While those hikes helped protect its profit, the company then had to offer promotions on products like Kleenex to stimulate sales, and that in turn hurt profits.

It finished fiscal 2009 with earnings per share of $4.52, an 11 percent rise, but it expects to earn between $4.80 to $5 per share this year. Analysts, meanwhile, are expecting $5.14 a share for fiscal 2010, which ends in December.

Kimberly-Clark’s growth could slow as commodity prices rise, Deutsche Bank-North America analyst Bill Schmitz Jr. said in a note to clients, adding that it remains unclear how shoppers will spend this year.

“Consumer tissue sales and margins remain disappointing as (the) company cedes share and commodities start to rise,” he wrote.

Its overall consumer tissue product revenue — including sales of Scott paper towels — edged up just 0.9 percent to $1.66 billion in the three months that ended Dec. 31.

In North America, those sales fell 6 percent, the net selling price fell 3 percent because of promotions and sales of paper towels tumbled in the double digits because shoppers traded down to less-expensive brands.

But sales of Kleenex tissues rose 7 percent due to a combined boost from the cold and flu season and promotions.

As consumers continue trying to save money, the company must boost its marketing to keep them spending, said Jack Russo, an analyst for Edward Jones.

“It’s hard to distinguish yourself from everybody else, especially at a time when consumers are watching their spending,” he said.

CEO Thomas Falk said Kimberly-Clark plans to come out with new products in the first part of the year to keep shoppers — and retailers — interested.

“I think retailers are continuing to push. They want innovation, they want to make room for innovation, so they’re going to be pushing manufacturers to make sure their product lines are performing,” he told investors on a conference call.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.