Kimberly-Clark warns of up to $170 million cost hit from oil prices

Investing.com -- Kimberly-Clark Corp. said it expects an additional $150 million to $170 million in input expenses if oil prices remain around $100 per barrel through the second half of the year, the company said during a call with analysts.

The maker of Huggies diapers and Kleenex tissues has not yet incorporated these incremental costs into its outlook, which projects double-digit earnings growth.

Chief Executive Officer Mike Hsu said the company does not know what the costs will be beyond current projections. He noted that the outlook remains a moving target.

Kimberly-Clark is the second major household goods manufacturer to warn about business impacts from the Middle East war. Last week, Procter & Gamble Co. said it could face an after-tax cost of $1 billion from higher oil prices.

Both companies said they are confident in their ability to offset some of the input inflation after managing more intense price increases in recent years. However, fully adjusting supply chains and product formulations to avoid the impact may not be efficient.

Chief Financial Officer Nelson Urdaneta said the company's confidence in managing through these cycles has improved.

For the current quarter, the Texas-based company said it will take a $50 million hit from incremental costs related to the Middle East war and a fire at a California distribution center.

You May Also Be Interested In

• Citrini flags overheating concerns as leverage, chip rally weigh on KOSPI
• Morgan Stanley lifts server market TAM to $809B, boosts targets on compute stocks
• Walmart to pay $1.4 billion for Vibe.co acquisition - WSJ