Huggies faced a social‑media firestorm after a Beijing‑based state‑run newspaper reported that its diapers tested positive for formamide. The solvent, used in manufacturing, raised concerns among Chinese consumers.

Kimberly‑Clark, the maker of Huggies, denied the claims, citing an independent, government‑certified test that proved its products were safe. The company called the newspaper’s findings false, but the allegations spread rapidly online.

The backlash “significantly impacted” second‑quarter sales, according to Kimberly‑Clark. The company warned that the situation would likely further hurt revenue and profits in the near term, with organic sales across the group taking a 0.5% hit.

Despite the turmoil, second‑quarter revenue rose 0.6% to $4.19 billion, slightly below analysts’ expectation of $4.22 billion, according to Fact Set.