(Reuters) – Kimberly-Clark slashed its annual profit forecast on Tuesday as the Kleenex tissue maker warned that U.S. President Donald Trump’s broad-based trade tariffs would push up its supply-chain costs.
The company now expects adjusted earnings per share to be flat to positive on a constant-currency basis in 2025, compared to its prior expectations of profit growth in a mid-to-high single-digit percentage range.
Shares of the company were down about 3% in premarket trading.
“The current environment will now mean greater costs across our global supply-chain versus our expectations at the beginning of the year,” Kimberly-Clark CEO Mike Hsu said. However, he also said the company would be able to offset these costs over time.
Trump has ratcheted up efforts to impose import taxes on goods from major U.S. trading partners and many core products, which is expected to lead to a surge in prices for American consumers.
Kimberly-Clark, which sells tampons, diapers and baby wipes, manufactures a vast majority of its products domestically, with imports from Canada, Mexico and China representing less than 10% of the U.S. cost of its sold goods, company executives have said earlier.
Price reductions and a demand slowdown led to revenues in its biggest North America segment declining 3.9% in the first quarter ended March 31, while International Personal Care sales slumped 8.9%.
The company has exited its U.S. private-label diaper business to focus on its core personal care technologies, such as those used in sanitary napkins. It initiated a business restructuring last year to control costs.
The Irving, Texas-based consumer goods maker missed analysts’ estimates for quarterly sales, posting a steep 6% drop to $4.84 billion, compared to estimates of $4.88 billion, according to data compiled by LSEG.
On an adjusted basis, it earned $1.93 per share, compared with analysts’ expectations of $1.89 per share.
Kimberly-Clark is one of the first U.S. consumer goods makers to report results this quarter, throwing light on how an escalating global trade war could impact the sector. Industry bellwether Procter & Gamble is scheduled to report quarterly earnings on Thursday.
(Reporting by Savyata Mishra and Neil J Kanatt in Bengaluru; Editing by Pooja Desai)
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