U.S. consumer brands report stronger growth in overseas markets

Emerging markets offer distribution opportunities as U.S. demand slows

Several companies in the Wall Street Journal report described a split between results in the United States and overseas markets. The pattern was not uniform: some companies reported weaker domestic results alongside international gains, while others reported overseas growth without a comparable U.S. decline.

For consumer-goods companies, emerging markets can provide room to expand distribution. Kraft Heinz reported that net sales in emerging markets rose 10% to $771 million in its most recent quarter. Sales declined in North America and international developed markets, which generate more revenue for the company.

“In the U.S., Kraft Heinz is in every aisle of the grocery store,” Chief Executive Steve Cahillane said in an interview. He said Kraft Heinz products are less available in emerging markets, creating more room for growth through expanded distribution.

Colgate-Palmolive reported that North American net sales fell 3% on July 31. Comparable sales rose 4.9% in the Asia Pacific region and nearly 14% in Latin America in its most recent quarter. The company said its premium products performed particularly well in Brazil and Mexico.

Kimberly-Clark Chief Executive Mike Hsu said, “Consumers are clearly under increased pressure,” on an earnings call last week. Kimberly-Clark reported a slight decline in organic U.S. sales while international sales rose, including gains in Vietnam and India.

Kimberly-Clark has doubled its Huggies e-commerce business in Vietnam so far this year through social-media sales, using a strategy it previously used successfully in China. Sales of its high-end diapers in India are up 67%.

Mondelez International reported that net revenue from emerging markets grew 7.4% in its most recent quarter, while revenue in developed markets increased 1.9%. “We still have a long runway of more consumers consuming more every day,” Chief Executive Dirk Van de Put said on an investor call July 28.

Restaurant companies are also looking abroad for new locations and unit growth. Starbucks closed hundreds of underperforming cafes across North America last year and continues to evaluate its domestic portfolio. Chief Executive Brian Niccol said, “We expect international to be a meaningful contributor to unit growth.”

McDonald’s said sales were growing in Japan, Germany, Australia and the U.K. Chicken offerings performed well abroad, while Red Bull-infused energy drinks and other new beverages performed well in Germany, the company said. In the United States, traffic stalled and customers did not respond to promotions introduced in the spring.

McDonald’s has tapped Skye Anderson to run its U.S. market. Anderson came through the company’s Australia business before holding U.S. and global leadership roles.

Yum Brands said systemwide KFC sales fell 2% in the United States and 1% in Canada during the first six months of the year compared with the same period a year earlier. Sales increased in all nine of its other regions. KFC opens a restaurant somewhere in the world every 3.5 hours on average, with few of those new restaurants in the United States.

Chipotle is also expanding outside the United States. The California-based Mexican-style restaurant chain opened its first Mexico location last month in the Monterrey area. Its local operator plans to open more locations in Nuevo León later this year and expand into Mexico City in 2027.