Kimberly-Clark Announces Third Quarter 2024 Results

"Our third quarter results reflect strong execution across the business as we transform our organization." –Mike Hsu, Chairman and CEO of Kimberly-Clark.

Oct. 22, 2024 - Kimberly-Clark Corporation (NYSE: KMB) today reported third quarter 2024 results driven by market-leading consumption growth from pioneering, innovative new products, and leveraging sustained productivity momentum.

"Our third quarter results reflect strong execution across the business as we transform our organization," said Kimberly-Clark Chairman and CEO, Mike Hsu. "I'm very proud of our teams' ability to deliver organic top-and-bottom-line growth, driven by market share gains and improved productivity, even against the backdrop of a dynamic consumer environment."

Hsu continued, "With our Powering Care strategy in full swing, we are accelerating our innovation pipeline and reducing costs to deliver higher-quality consumer solutions for every price point, and simplifying our operational structure so that we can be faster and more responsive in our markets. We are on track to deliver strong operating profit, margin, and EPS growth in 2024 while investing to maintain our business momentum into 2025."

Third Quarter 2024 Results

Third quarter sales of $5.0 billion were 4 percent lower than the prior-year period, including negative impacts of approximately 3 percent from foreign currency translation and approximately 1 percent from the divestiture of the K-C Professional Personal Protective Equipment (PPE) business completed in July 2024. Organic sales increased 1 percent, driven by a 1 percent increase in price while volume and mix were in line with a year ago. Price-led gains reflected necessary pricing actions to address higher local costs in hyperinflationary economies, mainly in Argentina. Volume and mix were positive in Developed Markets (representing Australia, South Korea and Western/Central Europe) offset by a decline in North America while volumes in Developing and Emerging (D&E) markets were in line with year ago.

In North America, organic sales decreased 1 percent versus the prior year, driven by a  3 percent decline in K-C Professional and 1 percent in Consumer Tissue while Personal Care was in line with year ago.

In D&E markets, organic sales rose 8 percent reflecting pricing gains primarily in hyperinflationary economies.  Organic sales for Developed Markets were 2 percent lower, driven by lower pricing that primarily reflected comparisons with temporary, energy surcharge-related price increases in Western Europe in the prior-year period partially offset by low single digit volume led gains.

Third quarter operating profit was $1.2 billion, including $565 million of gains from the divestiture of the PPE business. Adjusted operating profit increased by 5 percent despite an unfavorable impact of 4 percentage points from currency translation that was primarily driven by hyperinflationary economies. Excluding currency impacts, growth in adjusted operating profit reflected gross productivity gains, relatively neutral pricing net of cost inflation, supply chain related investments, as well as planned increases in marketing, research and general expenses.

Personal Care Segment

Personal Care sales of $2.6 billion decreased 2 percent in the quarter, while organic sales increased 3 percent from a combination of pricing actions in hyperinflationary economies as well as mix gains while volume was in line with year ago across all markets. Product innovation and solid commercial execution resulted in Baby and Child Care gaining global weighted market share on a year-to-date basis.

Third quarter operating profit of $482 million decreased 4 percent driven by a step up in advertising investment partially offset by optimization in overheads while gross profit was broadly in line with year ago.

Consumer Tissue Segment

Consumer Tissue sales of $1.5 billion decreased 2 percent, with a decline in organic sales of 1 percent. Organic decline was driven by retailer inventory reductions in North America as well as expected lower pricing in Western Europe due to lapping of temporary pricing related to energy surcharges in the prior year period.

Third quarter operating profit of $265 million decreased 1 percent, with gross productivity gains offset by higher manufacturing costs and increased advertising levels.

K-C Professional (KCP) Segment

KCP sales of $767 million decreased 10 percent due to divestitures and business exits as well as unfavorable currency impacts. Organic sales decreased 1 percent driven by 1 percent unfavorable price impact due to lapping of energy surcharges in Western Europe.

Third quarter operating profit of $161 million decreased 4 percent primarily impacted by the divestiture of the PPE business, underlying operating profit benefited from productivity gains partially offset by volume softness.

Cash Flow and Balance Sheet

Year-to-date cash provided by operations was $2.4 billion compared to $2.3 billion last year driven primarily by stronger operating results. Year-to-date capital spending was $512 million compared to $549 million last year. The company returned $2.0 billion to shareholders through dividends and repurchases of common stock. Total debt was $7.5 billion as of September 30, 2024, down from $8.0 billion as of December 31, 2023.

2024 Outlook

Based on its year-to-date results, the company has updated its 2024 outlook, with all factors compared to 2023, as follows:

Organic Net Sales are expected to grow between 3%-4% versus a mid-single digit rate previously, primarily reflecting discrete headwinds from changes in retail inventory levels. Reported Net Sales are still expected to be negatively impacted by 400 basis points of currency translation and 120 basis points from divestitures.

Adjusted Operating Profit and Adjusted Earnings Per Share are still expected to grow at a mid-to-high teens percentage rate on a constant-currency basis.

Reported Operating Profit and Reported Earnings Per Share are now expected to be negatively impacted by approximately 650 basis points from currency translation versus a previous expectation of 700 basis points.

This outlook reflects assumptions subject to change given the macro environment.

Kimberly-Clark and its trusted brands are an indispensable part of life for people in more than 175 countries and territories. Its portfolio of brands, including Huggies, Kleenex, Scott, Kotex, Cottonelle, Poise, Depend, Andrex, Pull-Ups, GoodNites, Intimus, Plenitud, Sweety, Softex, Viva and WypAll, hold No. 1 or No. 2 share positions in approximately 70 countries.

SOURCE: Kimberly-Clark Corporation