Kimberly-Clark Optimistic about Long-Term, Despite Present Challenges

The following is part of the transcript of Kimberly-Clark’s second quarter 2017 financial results conference call with CEO Thomas J. Falk.

I thought I would comment on how I see the environment overall and then how we're approaching it. So, while I remain optimistic about our long-term future, the near-term environment has become more challenging than maybe we saw at the beginning of the year. So category growth has slowed broadly in lots of places over the last year or so, and we expect that growth will pick back up over time, but that pickup may not happen quickly. In the meantime, competitive activity has increased, including higher spending in North America over the last 12 months.

Just for perspective, in the categories that we compete in, in North America, the total market declined by about 1% in the quarter. Looking at our businesses in North America, Personal Care volumes were off 1%. In the infant and child care mega category, our volumes were down mid-single digits. Beyond tough comparisons, results were impacted by competitive activity and lower category demand, which is down about 1% year-to-date following last year's 1% decline in the U.S. growth rate. On the other hand, volumes were up mid-single-digits in baby wipes and low single-digits in adult care. In adult care, we're introducing an improved Depend product this quarter, and we're increasing marketing and promotion support to help drive more growth in this category.

Our Consumer Tissue volumes were down 4%, and that compares to a 6% growth in the base period. We'd expect some better performance in Consumer Tissue in the back half of the year as we got a stronger promotional calendar planned and we're making some targeted promotion changes on Kleenex facial tissue.