Yahoo Finance Kimberly-Clark Corp (KMB) Q1 2024 Earnings: Surpasses Analyst Revenue Forecasts
Reported Revenue: $5.1 billion, a slight decrease of 1% year-over-year, falling short of estimates of $5.085 billion.
Gross Margin: Improved significantly by 390 basis points to 37.1%, driven by organic growth and productivity gains.
Diluted EPS: Reported at $1.91, and adjusted EPS at $2.01, both surpassing the estimated $1.63.
Net Income: Reported at $647 million, showing a robust growth of 14% year-over-year, exceeding the estimated $552.89 million.
Organic Sales Growth: Achieved a 6% increase, driven by a combination of price increases, favorable product mix, and volume growth.
2024 Outlook: Raised, with organic net sales expected to grow mid-single digits and adjusted EPS anticipated to increase at a low-teens percentage rate on a constant-currency basis.
Shareholder Returns: $452 million returned to shareholders through dividends and stock repurchases during the quarter.
On April 23, 2024, Kimberly-Clark Corp (NYSE:KMB) released its 8-K filing, announcing a robust start to the year with first-quarter earnings that surpassed analyst expectations for revenue. The company reported net sales of $5.1 billion, slightly down by 1% year-over-year but ahead of the estimated $5.085 billion, reflecting strong organic sales growth of 6%. This performance was underpinned by a 390 basis point increase in gross margin to 37.1%, driven by organic growth and productivity gains.
Company Overview
Kimberly-Clark, a leading manufacturer in the tissue and hygiene sector, boasts a diverse portfolio that includes well-known brands such as Huggies, Pull-Ups, Kotex, Depend, Kleenex, and Cottonelle. The company operates K-C Professional, which provides safety and sanitary products for workplaces. With over half of its sales generated in North America and significant markets in Europe, Asia, and Latin America, Kimberly-Clark continues to focus on innovation and market expansion.
Financial Highlights and Challenges
The quarter saw diluted earnings per share (EPS) rise to $1.91, with adjusted EPS climbing 20% to $2.01, significantly surpassing the analyst estimate of $1.63 per share. This increase was primarily fueled by a 14% rise in adjusted operating profit and lower net interest expenses. Despite facing headwinds from currency translation and divestitures, notably the sale of its Brazilian tissue and K-C Professional business, the company managed to deliver positive volume and mix gains across most of its markets.
Segment Performance
Kimberly-Clark's Personal Care segment reported stable sales of $2.7 billion, with a 10% increase in organic sales driven by strategic pricing actions in hyperinflationary markets and volume growth in developing and emerging markets. The Consumer Tissue segment, however, experienced a slight decline in sales by 2%, attributed to divestitures, though it achieved a 6% organic growth in North America. The K-C Professional segment saw a 3% decrease in sales due to divestitures but posted a 2% rise in organic sales, benefiting from strong demand for new washroom solutions.
Operational and Financial Strategies
The company's focus on innovation and productivity, along with strategic pricing adjustments, has effectively countered cost inflation and supply chain investments, particularly in developing markets. Kimberly-Clark's transformation initiative, aiming to optimize its business structure, has already started to reflect in its financials, with a significant reduction in net interest expenses and a more efficient tax rate of 23.6%.
Updated 2024 Outlook
Encouraged by its first-quarter performance, Kimberly-Clark has revised its 2024 outlook. It now anticipates mid-single-digit growth in organic net sales, up from its previous forecast of low-to-mid single digits. Adjusted operating profit is expected to grow at a low-teens percentage rate on a constant-currency basis, an optimistic revision from earlier projections. However, reported earnings metrics are expected to face a 700 basis point impact from currency translation.
In conclusion, Kimberly-Clark's first-quarter results not only demonstrate its resilience in a challenging macroeconomic environment but also highlight its strategic focus on growth and efficiency. The company's ability to exceed analyst expectations and its optimistic outlook for the rest of the year position it well to continue delivering value to its stakeholders.
Explore the complete 8-K earnings release (here) from Kimberly-Clark Corp for further details.
This article first appeared on GuruFocus.
