For 2002, the marketer is lowering its outlook by 2% to 3% to between $3.42 and $3.46 a share. The news sent the stock down 11% to $50.45 in mid-day trading.
Kimberly-Clark President-CEO Thomas J. Falk said advertising and promotion expenditures for diapers and training pants are both running ahead of plan for 2002, as the company defends share of its Huggies and Pull-Ups training pants against Procter & Gamble Co.'s Pampers brand.
Price increase rolled back
But the marketer last week
But Mr. Falk said Kimberly-Clark would continue current spending increases on promotion to defend its share. "It's cheaper to defend share than it is to buy it back," he said.
While Kimberly-Clark's marketing support is up across most of its brands, which include Huggies, Depend, Kleenex and Scott tissue and towels, competitive activity has been especially keen in diapers and training pants. Mr. Falk said P&G has been distributing coupons through Catalina Marketing Corp.'s Checkout Coupon system for as much as $4 to $5 off packages of Pampers Easy-Ups training pants.
Kimberly-Clark's third-quarter net income was up 5.2% to $441.2 million, with earnings per share up 7.6% to 87 cents on a 3% sales increase to $3.5 billion. Promotional activity reduced sales by 2%.
WPP Group's Ogilvy & Mather Worldwide, New York, handles Kimberly-Clark's accounts.