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Kimberly-Clark to Boost Prices as Commodity Costs Rise -- Update

03/31/2021 | 09:44am EDT

By Dave Sebastian and Colin Kellaher

Kimberly-Clark Corp. on Wednesday said it would raise selling prices across the bulk of its North America consumer-products business to help counter rising costs of raw materials.

The maker of Huggies diapers and Scott paper products said it would raise prices by a percentage in the mid- to high-single digits, and the increases will go into effect in late June.

The moves will affect its baby- and child-care, adult-care and Scott bathroom-tissue businesses, Kimberly-Clark said.

The Irving, Texas, company said the increases, which it will implement almost entirely through changes in list prices, are needed to help offset significant commodity cost inflation.

The company in January guided for a commodity inflation of $450 million to $600 million in 2021, expecting costs to rise for materials like pulp, recycled fiber and resin. At that time, Chief Executive Michael Hsu said the company wasn't planning for broad-based increases to list prices.

"The pricing plans we outlined in January were based on the commodity inflation outlook we provided at that time, so it's fair to say that we wouldn't be announcing these price increases if the commodity environment hadn't worsened," a company spokesman said Wednesday.

Since then, global supply chains, which were already experiencing a crunch due to the Covid-19 pandemic, have seen additional disruptions. The February freeze that triggered mass blackouts in Texas led to chemical plant shutdowns and caused a shortage of the raw materials needed for everything from medical face shields to smartphones. As a result, prices for polyethylene, polypropylene and other chemical compounds reached their highest levels in years in the U.S. as supplies tighten.

Inflation is poised to leap higher in the next few months due to a sharp dip in prices a year ago, Federal Reserve Chairman Jerome Powell said in March.

"We could also see upward pressure on prices if spending rebounds quickly as the economy continues to reopen, particularly if supply bottlenecks limit how quickly production can respond in the near term," Mr. Powell said. "However, these one-time increases in prices are likely to have only transient effects on inflation."

Meanwhile, shipowners, exporters and importers are now racing to secure berths and containers at ports while warning of delays and higher costs for cargoes after engineers freed the Ever Given, a 1,300-foot container ship that had been stuck in the Suez Canal. In the U.S., container ships anchored off the Southern California coast are waiting for space at the ports of Los Angeles and Long Beach. The ships are carrying tens of thousands of boxes holding millions of dollars' worth of washing machines, medical equipment, consumer electronics and other goods that make up global ocean trade.

A raft of consumer-facing companies, including Cheerios maker General Mills Inc. and Olive Garden parent Darden Restaurants Inc., have also recently signaled concerns about rising commodity prices.

Write to Dave Sebastian at dave.sebastian@wsj.com and Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

03-31-21 1144ET

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Financials (USD)
Sales 2021 19 693 M - -
Net income 2021 2 393 M - -
Net Debt 2021 8 176 M - -
P/E ratio 2021 19,0x
Yield 2021 3,36%
Capitalization 45 277 M 45 277 M -
EV / Sales 2021 2,71x
EV / Sales 2022 2,64x
Nbr of Employees 46 000
Free-Float 89,0%
Duration : Period :
Kimberly-Clark Corporation Technical Analysis Chart | MarketScreener
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Technical analysis trends KIMBERLY-CLARK CORPORATION
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 18
Average target price 139,96 $
Last Close Price 134,18 $
Spread / Highest target 19,2%
Spread / Average Target 4,30%
Spread / Lowest Target -8,33%
EPS Revisions
Managers and Directors
Michael D. Hsu Chairman & Chief Executive Officer
Maria G. Henry Chief Financial Officer & Senior Vice President
Robert Long Chief Research & Development Officer
Manoj Kumbhat Global Chief Investment Officer
Robert William Decherd Independent Director
Sector and Competitors