Why Kimberly-Clark’s Margins Are Expected to Decline

Kimberly-Clark’s (KMB) profit margins remained weak in the first nine months of 2018, and the trend is likely to continue as challenges persist, at least in the near term. Kimberly-Clark’s management expects inflation in commodities, including pulp and other raw materials, to continue to hurt its gross margins despite the benefits from a favorable mix, higher pricing, and cost savings. Weak gross margins are likely to hurt operating margins during the fourth quarter.