The maker of Kleenex tissues and Huggies diapers is raising prices on a variety of products, including most of its North American consumer goods, to offset the impact of higher costs, Chief Executive Officer Thomas Falk said in a statement.
Shares of Kimberly-Clark fell 2.7 percent to $64.28 in premarket trading.
Kimberly-Clark earned $350 million, or 86 cents per share, in the first quarter, down from $384 million, or 92 cents per share, a year earlier.
Excluding certain items, earnings fell to $1.09 per share from $1.14. Analysts on average had expected $1.17, according to Thomson Reuters I/B/E/S.
Sales rose 4 percent to $5.03 billion, topping the analysts' average forecast of $4.98 billion.
Kimberly-Clark now expects materials costs to rise $450 million to $550 million this year, up from a previous assumption of $200 million to $250 million. It cited increases in everything from pulp to oil-based materials.
The company said in March that it would raise North American prices on products such as diapers and toilet paper by about 3 percent to 7 percent this year.
Kimberly-Clark announced plans in January to exit the pulp making business. It is also cutting spending to help mitigate the impact of higher costs.
The company forecast 2011 earnings of $4.80 to $5.05 per share, excluding special items, compared with its January outlook of $4.90 to $5.05.
It raised its sales growth outlook for the year to a range of 4 percent to 6 percent. In January, it had forecast an increase of 3 percent to 4 percent.
(Reporting by Jessica Wohl, editing by Maureen Bavdek and Lisa Von Ahn)