Coca-Cola, Kimberly-Clark Increase Profits After Raising Prices

Profits of Coca-Cola and Kimberly-Clark jumped in the third quarter after they increased prices of their products at a rate that surpassed inflation.

Coca-Cola's net income attributable to shareholders rose 9% from a year earlier to $3.09 billion, the company said Tuesday.

At Kimberly-Clark, the increase was of 26% to a net income of $587 million, according to its earnings statement.

Coca-Cola raised its overall prices by 9% from the third quarter of 2022. In Europe, the adjustment was 19%, while in the U.S. prices rose 5%. Despite the increase, consumers still bought more products as sales volume gained 2%.

Annual inflation in the U.S. in the 12 months ended in September was 3.7%, the Labor Department said on Oct. 12.

Women's World Cup

The company highlighted its marketing campaigns related to the FIFA Women's World Cup to promote the Coca-Cola and Powerade brands. The initiative boosted sales in Asia and in Latin America. The tournament, held in Australia and New Zealand in July and August, was won by Spain.

"We delivered an overall solid quarter and are raising our full-year topline and bottom-line guidance in light of our year-to-date performance," Chairman and Chief Executive Officer James Quincey said in a statement. "Our leading portfolio of brands, coupled with an aligned and motivated system, positions us to win in the marketplace today while also laying the groundwork for the long term."

Coca-Cola expects organic revenue growth of 10% to 11% this year, an increase from the range of 8% to 9% predicted in July.

Margin Recovery

Kimberly-Clark, the maker of Kleenex tissues, Cottonelle toilet paper, and Huggies diapers, increased by 5% in the third quarter. The adjustment helped the company to return to margins of the years before the Covid-19 pandemic.

"We delivered another strong quarter, with organic growth across all segments and continued margin progress," Chairman and CEO Mike Hsu said in the earnings statement. "Our innovation and commercial capabilities continue to enhance the value proposition of our brands, while strong execution of our revenue growth management and ongoing productivity programs enabled us to restore gross margin to pre-pandemic levels."

Kimberly-Clark now expected organic growth of 4% to 5% this year and earnings per share increase of 15% to 17%. Previously, the company expected organic growth of 3% to 5% and EPS increase of 10% to 14%.

Procter & Gamble, another major U.S. consumer products company, also reported higher profits for the third quarter after increasing prices.