Kimberly-Clark Corporation KMBhas been sailing in troubled waters, thanks to the prolonged struggle with rising commodity costs, lower selling prices and increased competition in the diaper segment. These factors have weighed on the company’s shares that have declined 9.4% in the past three months against the industry’s fall of 8.
8%.Rising Commodity Costs
Higher input costs have been troubling Kimberly-Clark’s performance for a while. Evidently, commodity cost inflation of $175 million, stemming from greater costs of pulp and other raw materials, caused the company’s adjusted operating profit to fall 3% in the first quarter of 2018. Such factors have also been a drag on the gross margin, which contracted roughly 890 basis points (bps) to 28% in first-quarter 2018.