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K-C Reports Q2 Details



Published July 25, 2011
Related Searches: K-C
For the quarter, net sales increased 11.2% to $5 billion, a new quarterly record. Sales were higher in all four of the company's business segments, highlighted by continued strong performance across developing and emerging markets and double-digit sales growth for Personal Care products in North America. Organic sales growth exceeded 7%, including improvements of about 3% in both sales volumes and net selling prices. Changes in currency exchange rates also benefited sales by approximately 4%.

According to the company, the top-line growth and cost savings contributed positively to results; however, those improvements were not sufficient to overcome an increased level of inflation, as input costs climbed about $180 million and a planned higher investment in strategic marketing of nearly $25 million.

"Our second quarter results reflect continued progress with our top-line growth strategies as well as the significant challenges we are facing on the cost front," explained chairman and CEO Thomas Falk. "Although we have delivered organic sales growth of more than 6% through the first half of the year, the reality is that the rapid run-up in commodity costs has outpaced our ability to offset inflation in the near-term with price increases and other actions. As a result, we have increased our emphasis on improving revenue realization and during the second quarter implemented or announced new price increases in the U.S. and other markets around the world. These moves should lead to sequentially better bottom-line results in the fourth quarter, as we announced last week."

Sales of personal care products climbed 15.1% in the second quarter. Sales volumes rose 9%, net selling prices improved about 2% and currency effects added approximately 4% to sales.