What to Expect from Kimberly-Clark’s Sales in 3Q17
Analysts project a slight improvement
Analysts estimate Kimberly-Clark (KMB) to post sales of $4.7 billion in 3Q17, up 1.4% YoY (year-over-year). The company’s 2H17 sales are expected to benefit from the launch of innovative and renovated products. Besides, the planned increase in marketing and promotional spending could further boost the demand for the company’s products and in turn drive volumes.
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Factors that could impact sales
As we discussed, Kimberly-Clark’s top line is expected to rise marginally driven by new product launches supported by promotions. However, softness in the domestic market is likely to restrict its sales growth. Notably, Kimberly-Clark is struggling in the US as low consumer demand and increased competition is hurting its sales.
The company’s Personal Care and Consumer Tissue segments are witnessing volume declines, reflecting low demand. Meanwhile, lower pricing on account of heightened competition further restricts the upside. Internationally, China (FXI), South Korea, Western and Central Europe, and Australia are witnessing soft volume trends coupled with lower pricing.
Given the challenges, the company’s management lowered its 2017 sales guidance. Kimberly-Clark now projects organic sales to remain flat or rise marginally. Earlier, the company expected sales to improve in the range of 1.0% to 2.0%.
In comparison, the company’s peers including Procter & Gamble (PG) and Colgate-Palmolive (CL) are also expected to post soft sales. Analysts expect Procter & Gamble to report a 0.9% improvement in its upcoming quarter. Moderating category growth, a tough retail environment, and increased competition in North America are projected to affect the sales of these companies.
On the contrary, both Church & Dwight (CHD) and Clorox (CLX) are seeing increased volumes on their home turf thanks to their focus on innovation and a balanced portfolio, which includes value and premium brands.