Huggies maker Kimberly-Clark warns of rising costs

Diaper sales hit by falling US birthrate
Diaper sales hit by falling US birthrate

The maker of Kleenex tissues and Huggies diapers warned costs are going up.

Kimberly-Clark cut its profit outlook Tuesday, citing higher raw materials prices. Chairman and CEO Thomas Falk hinted that the company may have to start charging customers more to make up some of the difference.

A stronger dollar is also hurting the company.

The combination of higher commodity costs and a strong US dollar is expected to be a drag on sales and profit for other multinational companies as they report their latest results in the coming days and weeks.

Bonnie Herzog, an analyst with Wells Fargo Securities, said in a report Tuesday that expectations for Kimberly-Clark were already "very weak heading into the quarter." She said she remains concerned about intensified pressure because of rising commodity costs.

Shares of Kimberly-Clark (KMB) were flat in midday trading -- and the stock was missing out on a broader market rally. The Dow was up nearly 150 points and the Nasdaq hit a new all-time high.

In addition to Huggies and Kleenex, Kimberly-Clark makes Pull-Ups as well as the Scott and Cottonelle brands of toilet paper.

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