By Neil J Kanatt and Alexander Marrow
Aug 4 (Reuters) – Kimberly-Clark cut annual sales and profit forecasts on Tuesday and said false claims about its diaper quality in China will continue to be a problem after hurting second-quarter sales.
The Kleenex maker, whose shares were volatile in early trading, cited independent testing by a government-certified third party to refute Chinese social media claims that its Huggies diapers contained formamide.
Chinese media reported in June, just before the crucial “618” shopping festival, that Huggies and two Chinese brands Babycare and Bibabebe tested positive for the toxic substance that can irritate the skin, eyes and breathing if inhaled.
China’s market regulator launched an inquiry, without naming any company or brand, but has not provided an update on its status.
“While we are cautiously optimistic in some areas, I think these incidents have been occurring with greater frequency, and consumers are pretty smart and getting savvy,” CEO Mike Hsu said. “We’re also realistic that it’s going to take a little time to kind of work through this.”
Kimberly-Clark, on track to complete its roughly $40 billion acquisition of Kenvue by the year-end, now expects 2026 organic sales growth to trail the weighted average growth of its categories and markets by about 100 basis points — down from its previous expectation of in-line growth. Those categories grew about 2% over the past year.
The company expects annual adjusted earnings per share...
By Neil J Kanatt and Alexander Marrow Aug 4 (Reuters) – Kimberly-Clark cut annual sales and profit forecasts on Tuesday and said false claims about its diaper quality in China will continue to be ...