Toilet Paper Manufacturer Aiming To Raise Prices For Second Time This Year Due To High Inflation

Consumer goods maker Kimberly-Clark plans to raise prices for the second time this year.

After the company released its third quarter earnings report — which referenced inflation concerns multiple times — shares fell by 2% during Monday trading. Kimberly-Clark owns brands like Kleenex, Cottonelle, Huggies diapers, and Scott toilet paper.

“Our earnings were negatively impacted by significant inflation and supply chain disruptions that increased our costs beyond what we anticipated,” explained Kimberly-Clark chief executive Mike Hsu. “We are taking further action, including additional pricing and enhanced cost management, to mitigate these headwinds as it is becoming clear they are not likely to be resolved quickly.”

The company decreased its earnings per share outlook and increased its projected organic sales decline due to “significantly higher input cost inflation.”

Though year-over-year revenue increased by 7%, net income dipped 1% from one year ago. Fox Business reports that Kimberly-Clark was forced to hike prices in June by mid-to-high single digits.

Kimberly-Clark is far from the only consumer-facing firm to sound alarms over rising inflation, which reached 5.4% in September.

John Gessert — who leads American Plastic Toys — said during a CNBC interview that inflation is less transitory than officials acknowledge: “It’s not going to be transitory because … I can’t imagine going back to the people that have stuck with us and saying, ‘Okay, we’re going to take $1 out of your hourly wage.’ I just don’t see wage inflation retreating any time soon.”

Meanwhile, hedge fund manager Carl Icahn asserted that “in the long run we are certainly going to hit the wall” due to rising price levels. “I really think there will be a crisis the way we are going, the way we are printing money, the way we are going into inflation. If you look around you, you see inflation all around you, and I don’t know how you deal with that in the long term.”

In its September 2021 economic outlook, the Organization for Economic Cooperation and Development warned advanced economies to “remain vigilant” for signs of “persistent inflation.” Though economists predict a moderation in consumer price increases by the end of 2022, the intergovernmental organization notes that “sizeable uncertainty remains” — particularly in the United States.

“Near-term inflation risks are on the upside, particularly if pent-up demand by consumers is stronger than anticipated, or if supply shortages take a long time to overcome,” said the report. “The impact of past increases in shipping costs and commodity prices is already sizeable in the G20 economies, accounting for much of the rise in inflation over the past year, and is likely to linger through much of 2022 even if there are no further cost increases.”

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