Kimberly-Clark reports quarterly sales record

The makers of Huggies and Kleenex reported an increase in sales of 9.7 percent to $4.6bn for the three months ending September, 30, setting a quarterly record for the company. The weak dollar, which is benefiting US-based manufacturers in international markets, helped push sales figures up three percent. Operating margins widened to 14.8 percent from 12.5 percent in the same period last year and operating profit rose by 29.7 percent to $682.7bn, which was above analyst expectations. The increase in operating profit was helped in part by a litigation settlement gain of $16m. The company said savings from a cost reduction program of $40m and strategic cost cuts of $27m enabled the company to accommodate $70m of cost inflation, driven primarily by high oil prices. The combination of high sales and successful cost cutting led Kimberly-Clark to invest an additional $10m in marketing spend. Sales of personal care products were particularly strong, advancing 12 percent in the quarter to $1.92bn. In Europe, personal care sales increased eight percent largely due to favorable currency, effects while North American sales rose by a similar amount on the back of organic growth. Product innovations spurred growth in the region with Huggies baby wipes being mentioned as a brand that grew at double-digit rates. Personal care sales were highest in developing and emerging markets where growth was higher than 20 percent for the second straight quarter. Most of Latin America, South Korea, China and Russia experienced strong gains. Reflecting on the results, CEO Thomas Falk said: "We're focused on driving our targeted growth initiatives and continually improving our capabilities and cost effectiveness. ​ "As a result, we have generated better than expected top-line growth and a solid improvement in adjusted operating profit at a time when cost inflation has pressured our margins." ​ Looking to the future, Falk added: "We expect top-line momentum will remain positive, paced by continued strong performance in developing and emerging markets and success of our other targeted initiatives, particularly in personal care and K-C professional."​