(Reuters) -Huggies diaper maker Kimberly-Clark topped analysts’ estimates for third-quarter sales on Thursday, as inflation-weary consumers gravitated toward its affordable staples.
Shares of the company, which have lost nearly 11% of their value this year, were up 2.4% before the bell.
With inflation still running high, shoppers have switched to cheaper private-label goods for everyday items such as groceries and paper towels, skipping costlier branded products.
The Dallas-based consumer goods company has tweaked entry-level price points and blended features from its premium products into lower-tier offerings, in a bid to retain cost-conscious consumers, executives said in August.
Kimberly-Clark’s overall volumes jumped 2.4% in the third quarter, while prices dipped 0.2% from a year ago.
Its organic sales jumped 2.7% in North America, along with a 2.1% growth in its international personal care division.
The Kleenex tissue maker has in the past two quarters warned about steep U.S. import duties, especially on Chinese goods, weighing on its margins.
Its adjusted gross margin shrank 170 basis points in the quarter, hurt by higher costs tied to tariffs, pricing actions and efforts to offer better value across its portfolio.
Kimberly has been restructuring its business to control expenses and simplify its operations. In June, it inked a $3.4 billion deal to sell a majority stake in its international tissue business to Brazilian pulp maker Suzano.
It posted net sales of $4.15 billion for the three months ended September 30, compared with analysts’ average expectation of $4.12 billion, according to data compiled by LSEG.
Quarterly profit came in at $1.82 per share on an adjusted basis, beating estimates of $1.76.
The company expects 2025 organic sales growth to be in line with the roughly 2% average growth seen across the categories and markets it competes in, a step down from its August forecast, when it anticipated outperforming those benchmarks.
(Reporting by Savyata Mishra in Bengaluru; Editing by Shreya Biswas)
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