Kimberly-Clark Corporation (KMB) is being harmed by rising costs.

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However, economists have warned about the inflationary consequences of keeping interest rates artificially low to boost the economy since the beginning. KMB has been busy trying to cope with so many challenges. In coping with the headwinds, the massive paper goods firm is only performing so-so.

KMB was able to achieve a 2% increase in top-line revenue in its 2021 full-year results. That isn’t awful, but it isn’t the only figure to consider. For example, organic sales fell 1%. For a consumer staples firm, the difference between these two statistics is critical. In other words, even if customers bought less of the firm’s products, the corporation hiked product pricing sufficiently to boost the top line. That’s the large picture, but when you look at KMB’s businesses, things get much more difficult. For example, through a mix of price increases and volume gains, the firm was able to generate 6% organic growth in personal care. This business accounts for over half of the company’s revenue, which is excellent news. In 2021, the division’s sales increased by 10% year over year. Personal hygiene products and diapers are examples of such personal care items.

The remainder of the company’s operations, on the other hand, did not do as well. For example, its professional division’s organic growth was flat, with increased pricing offset by lower demand. This business accounts for about 15% of total revenue. From a revenue sense, that’s a wash, but if the trend continues, the fact that commercial clients have turned to cheaper options for their paper requirements might become an issue.

For firms in the consumer products sector, the top line is always crucial, but factors further down the earnings statement cannot be overlooked. This is especially critical now because of inflation and supply chain disruptions, which are occurring mostly as a result of the epidemic and the attempts to combat it. In 2021, KMB’s adjusted profits per share were $6.18 per share, down 20% from $7.74 in 2020. That isn’t a good indication.

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