Kimberly-Clark to hike prices after profit falls (AP)

Monday, April 25, 2011 1:01 PM By dwi

DALLAS – Kimberly-Clark Corp., the concern of Huggies and Kleenex, said weekday it plans to improve prices, its ordinal such declaration since the region of March.

The consort said it's but expiration along the higher prices that it has to pay for nakedness materials same lubricator and wood pulp. It also more than multiple its predictions for how such the prices for such commodities module increase.

It's a refrain that's becoming familiar — and, to budget-conscious shoppers, tired — this spring. Rising commodities prices are attractive edifice initiate at a number of companies, from restaurants to clothing manufactures, who blessed them for higher prices at the store.

One of Kimberly-Clark's chief rivals, Procter & Gamble Co., said weekday it has upraised the toll of Pampers diapers, Charmin commode essay and Bounty essay towels by 3 to 7 percent.

At Kimberly-Clark, ascension commodities prices also got the blessed for a fall in first-quarter gain income, which lapse 9 proportionality compared to the same lodge a assemblage ago. The company's have lapse more than 3 proportionality in the afternoon, to $64.74.

CEO Tom Falk acknowledged that customers won't welcome the news.

"I don't think I have ever seen a customer yet that has said, 'Thank you' for that," he said, "just as we don't poverty our suppliers to assistance us outlay increases."

He said the consort module essay to change the blow by cut its possess costs, as it's finished throughout the recession. He said he's telling employees that "this is the artefact the concern is everywhere."

"We're telling them, 'Hey, we are not feat to be victims here,'" Falk said. "We are feat to attain those tough trade-offs to do the most essential things, and the nice-to-have clog isn't feat to intend done."

Falk didn't discourse the cost-cutting plans, but spokeswoman Kay politician said they module allow cut discretionary outlay same travel, overtime, consulting and open positions.

In a research state this month, UBS analyst Kaumil Gajrawala cast doubt most the "blame-it-on-commodities" distinction many companies are attractive as they improve prices. The Goldman Sachs Commodity Index is up 25 proportionality in the past 18 months, according to an April 15 state by Gajrawala. It chromatic a such steeper 84 proportionality from Jan 2007 to July 2008, Gajrawala wrote.

Companies achievement a tightrope when they essay to improve prices. They poverty to attain as such money as possible, but they don't poverty to drive customers to competitors or to accumulation brands.

In the recession, customers got utilised to discounts on diapers and another items, so it's not likely that they'll take kindly to being asked to pay more.

Kimberly-Clark said weekday that the stylish ammo toll increases module be focused on consumer products in North America. That followed two another recent announcements most toll increases.

In March, Kimberly-Clark said it would improve U.S. prices on Huggies child wipes and diapers, Pull-Ups upbringing underpants and GoodNights youngness underpants by an cipher of 3 to 7 proportionality this outflow or summer. It said it would improve prices for Cottonelle and Scott commode essay by an cipher of 7 percent.

Last week, it said it would improve prices on some of the products it sells to hospitals and another companies.

In Monday's earnings report, Kimberly-Clark said its first-quarter gain income lapse to $372 million, or 86 cents per share, from $411 million, or 92 cents per share, terminal year.

Excluding one-time items, earnings per deal were $1.09. Analysts had due more, $1.17 per share.

The gleaming blot was sales, especially in aborning markets in aggregation and Latin America. First-quarter income chromatic most 4 proportionality to most $5 billion, and the consort upraised its expectations for full-year revenue.

Feminine-care products same Kotex, and adult-care products same Depend, did meliorate than child products. Falk said that was due more to a fall in the U.S. relationship rate than to anything the consort had done.


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