Nelson Urdaneta
Chief Financial Officer at Kimberly-Clark
Sure. So first, I mean, to cover the -- to give you a walk-through of the commodity update that we've got right now. And so as we pointed out in the remarks, I mean, we are calling now for the year a range of $1.4 billion to $1.6 billion. At the midpoint, it's $1.5 billion. This is an increase of $300 million.
And what we're seeing is really first on fiber. Fiber, we're hitting all-time highs in Yuke [Phonetic]. As we exited June, we saw sequential growth in prices for Yuke through the month of June, hit historical high in June. We're also seeing, in other pulp grades, elevated prices, and that's one of the key drivers behind what we're calling.
Secondly, it's energy. If we think about energy and natural gas, in particular, we've seen in Europe a 10 times versus a year ago in prices. And in our Western European U.K. business, which has a sizable tissue business, it is energy-intensive and that's bearing in kind of what we're projecting at this stage.
And then the other one is distribution costs. Overall, we're seeing distribution costs also increase. And I'd say this is more largely on the international side of the house, and this is reflecting and bearing on what we're showing in terms of our expectations at the midpoint of our guidance for costs. A green shoot or a benefit we're beginning to see is in resins. I mean, that's probably the only big element within our cost bucket that we're beginning to see prices to come down on a sequential basis. And again, this is the one I'd highlight as I look at it.
Overall, I'd like to -- I think it's also important to highlight that in a two year stack, we're staring at a $3 billion overall incremental cost, which is north of 1,500 basis points of margin that we're taking a hit as a business in 24 months. So it's quite sizable that we're managing through.
And then that takes me to your point around conservatism on the guidance. The first thing is we -- overall, in the bottom line and the EPS, we've made our best estimate based on what we're seeing today and what's playing out in the market. We've also taken into account all of the cost-saving initiatives, as I just talked about before, FORCE, and that's embedded in what we have here. And then lastly, it's also our pricing. We were very encouraged by how our pricing came through. Our teams did pretty well in terms of executing the pricing in the second quarter, which sequentially was much better than what we had in the first quarter. And that's the other element that would bear in how we would see the second half playing out.