Kimberly-Clark Corporation

Ladies and gentlemen, thank you for your patience and holding. We now have your presenters in conference. Please be aware that each of your line is in a listen-only mode. At the conclusion of this morning's short remarks, we will open the floor for questions. At that time, instructions will be given as to the procedure to follow if you would like to ask a question. It is now my pleasure to introduce today's first presenter, Taryn Miller. Please go ahead.

Thank you, and good morning, everyone. Welcome to Kimberly Clark's second quarter earnings conference call. With me today are Mike Hsu, our chairman and CEO, and Nelson Ordineta, our CFO. Earlier this morning, we issued our earnings news release and published prepared remarks from Mike and Nelson that summarized our second quarter results and 2022 outlook. Both documents are available in the investor section of our website. In just a moment, Mike will share opening comments, and then we'll take your questions. During this call, we may make forward-looking statements. Please see the risk factor section of our latest annual report on Form 10-K and the second quarter 10-Q for further discussion of forward-looking statements. We may also refer to adjusted results and outlook. Both exclude certain items described in this morning's news release. The release has further information about these adjustments and reconciliations to comparable GAAP financial measures. Now, I'll turn the call over to Mike.

Okay, thank you, Taryn. Good morning, everyone. I'm proud of our team's execution as we closed our first half with 9% organic sales growth in the second quarter. We delivered robust gains in all segments, our growth strategy is working, and our teams are executing with excellence. in what continues to be a volatile operating environment. Clearly, our results reflect this ongoing volatility. For the year, we're now anticipating $300 million of additional input cost inflation. We remain committed to recovering and eventually expanding our margins, and thus we've taken further action to realize additional pricing and cost savings to mitigate these headwinds. We continue to expect pricing and cost savings to fully offset the effects of inflation over time. Based on the strength of our top line, we're raising our full year organic sales outlook to increase 5% to 7%. We're maintaining our adjusted EPS guidance. However, based on current conditions, including our updated input cost outlook, we now expect to be in the lower end of that EPS range. We'll continue to manage our business with discipline as we navigate near-term headwinds. Based on the pace and breadth of our pricing actions, we anticipate some volume impact over the balance of the year. Still, we're encouraged by the overall health of our categories and our brands. Our brands remain essential. We also know consumers are seeking greater value and will continue to sharpen our offering to enhance our market position. We remain committed to delivering balanced and sustainable growth. In the near term, we're taking necessary action to recover margins. We're also continuing to invest in our brands to enable us to grow sustainably now and for the long term. Now we'd like to address your questions.