Kimberly-Clark Corp raised its full-year profit forecast on Tuesday as consistent price hikes helped the company post better-than-expected sales in the first quarter, despite weak volumes across all its segments.
Like several other consumer goods companies, Kimberly-Clark has been bumping up the prices of its products to offset spiralling costs associated with labour, supply chains and raw materials.
Kimberly-Clark's gross margin increased 340 basis points to 33.2% in the quarter ended 31 March.
The maker of personal care products like toilet paper and sanitary napkins raised prices across all its categories by 10% in the quarter, but saw volumes fall by only 5%.
"While inflationary pressures have yet to subside, we drove continued improvement in our gross margin this quarter," Mike Hsu, chief executive officer said.
Last week, peer Procter & Gamble also lifted its annual sales forecast after it reported upbeat third-quarter results and higher margins, similarly benefiting from consistent price increases.
Kimberly-Clark now expects 2023 profit between 6% and 10%, compared with its earlier forecast of 2% to 6%.
However, it maintained its annual net sales and organic sales growth expectations.
The Huggies nappy maker's revenue rose 2% to about $5.20 billion in the first-quarter, beating analysts' average estimate of $5.06 billion, according to Refinitiv data.
Net income attributable to Kimberly-Clark came in at $566 million, or $1.67 per share, compared to $523 million, or $1.55 per share, a year ago.
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