Kimberly-Clark’s Q2 Profit Squeezed Despite the Activation of Multiple Levers; Shares Fairly Valued

The torment from skyrocketing costs and supply chain disruptions continued to plague Kimberly-Clark’s profits in the quarter. Inflation served as an 800-basis-point drag on gross margins, a modest retraction from the 900-basis-point hit in the first quarter. However, management now expects to incur incremental costs in fiscal 2022 of $1.4 billion to $1.6 billion (up from its $750 million to $900 million outlook six months ago), which is on top of the $1.5 billion digested a year ago, primarily stemming from higher fiber, pulp, and energy costs.