Kimberly-Clark Corp. warned analysts that sustained oil near $100 per barrel through the second half of the year would add between $150 million and $170 million to its input costs, a figure the company said it has not yet built into its guidance.
The consumer products manufacturer - known for Huggies diapers and Kleenex tissues - continues to project double-digit earnings growth in its outlook, but executives told analysts the newly quantified potential oil-related expense remains outside that forecast.
CEO Mike Hsu described the outlook as a moving target, saying management does not yet know what incremental costs might look like beyond current projections. The company is treating the possible $150 million to $170 million range as contingent on oil staying near the $100-per-barrel level through the remainder of the year.
Kimberly-Clark is the second large household-goods company to call out potential effects from higher oil prices tied to the Middle East war. Last week, Procter & Gamble Co. said it could face an after-tax cost of $1 billion from elevated oil prices.
Despite the warning, Kimberly-Clark executives expressed confidence in their ability to mitigate some of the input inflation. Management cited experience handling more severe price increases in recent years as evidence they can offset portions of the burden, though they cautioned that fully reworking supply chains or changing product formulations to eliminate the impact may not be an efficient response.
Chief Financial Officer Nelson Urdaneta said the company's confidence in navigating these cycles has improved, signaling that Kimberly-Clark expects to lean on established levers to manage cost pressure.
For the current quarter, the Texas-based company said it will incur a $50 million hit from incremental costs tied to the Middle East war and a fire at a California distribution center. That amount is a distinct, near-term charge separate from the potential $150 million to $170 million range linked to sustained oil at roughly $100 per barrel.
Executives did not provide additional quantified scenarios beyond the ranges already disclosed, and they indicated that the company’s outlook will remain subject to change as commodity and geopolitical conditions evolve.