Kimberly-Clark Falls On Weaker Guidance as Inflation Hits Input Costs

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Investing.com – Kimberly-Clark (NYSE:KMB) slipped by 6% after lowering guidance as raw material prices rise.

The company now believes its 2021 sales could grow at a slower pace while adjusted operating profit is now seen falling from 2020 levels. They were earlier expected to grow by 2%

The company is targeting full-year 2021 sales growth of 0 to 1%, compared to a previous forecast of 1 to 2%. Profit is expected at $7.30 to $7.55, versus the prior view of $7.75 to $8.00. The updated earnings outlook reflects significantly higher input cost inflation and lower sales volumes, partially offset by higher net selling prices and additional cost savings, the company said in a statement.

Higher cost of polymer-based materials and pulp are seen driving the company’s key cost inputs to increase $900 million to $1 billion, which means costs could even be double of the previously estimated figures of $450 million to $600 million.