European cuts denting sales at Kimberly-Clark
TEARING up its business structure has pushed tissue maker Kimberly-Clark’s revenues lower in the first quarter of the year.
The company behind Kleenex and Andrex said restructuring and foreign exchange costs had sent sales down one per cent to $5.3bn (£3.16bn).
While organic sales were up four per cent, currency movements knocked off three per cent and restructuring charges wiped out a further two per cent.
Net income rose 1.3 per cent to $538m as the firm trimmed costs to offset the weakness in sales.
Kimberly-Clark pulled out of lower margin businesses across Europe last year, taking Huggies off the shelves and closing factories. The New York-listed group said yesterday that pre-tax charges for the alterations will be slightly higher than the previous range of $350m to $400m.
“Although we face continued headwinds from currency exchange rates and cost inflation, we’re maintaining our full-year guidance for adjusted earnings per share,” said chairman and chief executive Thomas Falk.
Kimberly-Clark said it expects earnings of between $6.00 and $6.20 per share this year.
The company hopes to complete its plan to spin off its healthcare unit by the third or fourth quarter of the year. The business posted sales of $400m in the first three months of 2014, driven by double-digit growth in medical products such as feeding tubes.
Meanwhile a “soft cold and flu season” dented tissue sales in North America, offset somewhat by growing sales in Brazil and Venezuela, where the company expanded last year to help tackle a national toilet paper shortage.
Shares in Kimberly-Clark dropped more than two per cent as the US markets opened yesterday but later recovered.