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Last Friday I posted a Rubicon Sighting! One of the dividend stocks on Credit Suisse's Buy List was taken out behind the woodshed today.
Kimberly-Clark’s Profit Declined 19% in Quarter
The results fell short of analysts’ expectations, and shares of the company, which makes Kleenex tissues, fell nearly 6 percent.
Costs for crucial materials like pulp and oil-based materials rose $265 million in the quarter, the highest quarterly increase the company has ever seen.
Way to go Ben Bernanke! Let's hear it for the man driving up the highest quarterly increase in costs the company has ever seen. Surely that deserves a round of applause.
If you look really close you can spot Kimberly Clark Kleenex between the garbage bags and the paper towels in the following picture. I have expanded my Kleenex hoard since that picture was taken (as new coupons appeared).
Unfortunately for Kimberly Clark, each and every package was bought with a coupon at Costco, which does not exactly scream high profit margins for the company itself. Further, I'm reaching a natural limit on just how much Kleenex I can actually hoard. Perhaps Kimberly Clark should have found a way to pass on their costs directly to me, but it would seem their competition is just too intense these days.
Competition from less expensive store brands has increased during the economic downturn, and promotional prices have hurt the company’s profits.
I must admit that I've been a big fan of those promotional prices. No doubt about it.
All is not lost though.
Toilet Paper Economics for the win!
Q1 GDP Tracking: Movin' on Up
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From BofA:
Since our update last week, *1Q GDP tracking is up two-tenths to 2.1% q/q
saar*. [Apr 19th estimate]
emphasis added
From Goldman:
We left ou...
4 hours ago
15 comments:
I should also point out the toilet paper in the picture. There was a time when it was Kimberly Clark brand. It came in cardboard boxes and represented a pretty good value at Costco. I paid $17.99 a case if memory serves.
It is now Marathon brand. It's a bit more expensive due to inflation but nothing at all to be alarmed about.
Most people do not buy Marathon brand at Costco though. They opt for Kirkland brand. I think they are making a mistake. If you actually do the math, Marathon is a cheaper product of similar quality. It just doesn't appear that way due to its higher cost (but far more sheets per package).
In order to cut costs, Marathon brand recently lowered the number of rolls from 45 to 40 while simultaneously making each roll even bigger than they already were. There was virtually no net change in the total number of sheets.
I suspect that most Costco shoppers are even further turned away by it now. It's a shame. The "productivity miracle" was worth it and they did not even raise the price when they did it. They saved 5 cardboard tubes per package and it reduces the labor by about 10% when I have to change the rolls out for new ones. Win win.
I saw no Marathon brand at my last trip to Costco. I hope that's not a permanent condition. If it is, I'll be even more thankful that I hoarded a great deal of it while it was there.
One more thought.
The garbage bags are now $11.99 at Costco. They were $12.49 recently but the price dropped a bit.
The return on investment of those garbage bags is now 20.7%. There be oil in those bags! Arr!
Mark,
Nice catch on Kimberly Clark. I wonder how many more of those stocks are going to perform poorly in the upcoming months.
So, again we see PPI and CPI squeezing companies.
Yes, using a store brand brings some relief, for now.
Perhaps you could consider not using any TP at all? I have done that when I lived in Indonesia. It was not that bad.
Coba
remy,
I owned Kimberly Clark once and was tempted to own it again. It is difficult to watch my IRA sit in cash. Fortunately, I did not "yield" to temptation last week.
Get it? Yield? Hahaha! Gallows pun humor. Sigh.
Coba,
Clearly the "squeeze" is not sustainable long-term. Something will most likely break again at some point. It is my belief that China is getting seriously squeezed as well, which would explain their recent unexpected interest rate hike.
Just opinions of course.
Request -
Could you update this post?
http://illusionofprosperity.blogspot.com/2009/12/monetary-printing-press-vs-mining.html
Also, could you add a "mining" tag?
A number of your posts have great information on historic mining trends.
Thanks!
- jus me
jus me,
Unfortunately, I cannot update the post since M3 was discontinued.
I can say that M2 has increased a modest 2.6% from 12/28/2009 to 10/11/2010.
Gold was $1085.25 on 12/23/2009 and now trades at $1325.20. That's a 22% increase.
I will add a "mining" tag. Hopefully I can find most of the posts that deserve it.
Thanks for the mining tag. Very cool!
-jus me
jus me,
I cleaned it up a bit. I noticed I snagged some false positives.
"Mining" is also found in "examining", "determining", and "data mining". My search for the mining word to determine mining topics wasn't 100% successful, lol.
I did a variety of searches to find the posts. "USGS" was probably the most reliable, since that meant I was referring to actual mineral statistics directly.
It's kind of interesting that the Fed could in theory reduce the money supply, if inflation got out of hand.
No one is charged with putting gold back in the ground, if gold-mining enthusiasm gets out of hand ...
- jus me
jus me,
I've seen people cash out their 401k out of laziness upon losing a job.
Do I Have 90 Days to Roll Over My 401k?
Probably best not to ask that question at the 61 day point!
Further, 60 days is not enough time for procrastinators, but then again no amount of time is enough for procrastinators. ;)
Mark,
Your measurement of "sheets" is the wrong measurement. It should be square footage if the number if plies is the same.
K-C recently reduced the width of their toilet paper. So you still get 1000 sheets, but you get about 55 sq ft LESS per roll.
Charles Kiting,
"Your measurement of "sheets" is the wrong measurement."
It was the only measurement offered though. Also keep in mind that this was BEFORE K-C reduced the size of the sheets.
Further, K-C is the exception. I'm not seeing a reduction in the size of sheets in my toilet paper hoard.
Marathon moved from 45 rolls to 40 rolls while simultaneously increasing the number of sheets.
The total square feet has remained a constant at 2,812.5. I do look. No change.
I should clarify that my "It was the only measurement offered though." was in reference to a previous heckle of Kimberly Clark math as seen here.
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