Kimberly-Clark Unveils First Quarter 2024 Performance and Upgrades 2024 Projections

Kimberly-Clark Corporation (NYSE: KMB) announced its first-quarter 2024 results today, marked by positive volume and mix gains attributed to innovative new products. This growth, coupled with sustained productivity momentum, led to robust earnings growth compared to the previous year. Mike Hsu, Chairman and CEO of Kimberly-Clark, expressed gratitude for the company’s global teams’ strong execution in achieving these results.

Hsu highlighted the significant contribution of their innovation pipeline to the sequential improvement in volume-plus-mix gains. He also emphasized the company’s continuous efforts to enhance productivity and optimize margin structures, alongside progress in implementing a new operating model, which positions Kimberly-Clark for future growth opportunities on a global scale.

Key Highlights of the Quarter:

  • Net sales amounted to $5.1 billion, with organic sales growing by 6 percent compared to the prior year.
  • Gross margin increased by 390 basis points to 37.1 percent, driven by organic net sales growth and gross productivity gains.
  • Diluted earnings per share were $1.91, while adjusted earnings per share stood at $2.01, marking a 20 percent increase from the prior year.

First Quarter 2024 Results:

Despite a 1 percent decrease in first-quarter sales compared to the prior year, organic sales saw a 6 percent increase. This growth was driven by a 4 percent rise in price, a 1 percent favorable product mix, and a 1 percent increase in volume. Notably, positive volume and mix trends were observed across North America, Developing and Emerging (D&E) markets, as well as Developed Markets.

In North America, organic sales grew by 3 percent, with Personal Care and Consumer Tissue segments driving the growth, partially offset by a decline in K-C Professional. D&E markets saw a remarkable 15 percent increase in organic sales, reflecting both pricing gains and volume/mix improvements. However, organic sales for Developed Markets decreased by 2 percent, primarily due to lower pricing.

Gross margin improvement to 37.1 percent was attributed to organic growth and gross productivity gains, which offset cost inflation, particularly in developing markets and supply chain-related investments.

First-quarter operating profit reached $853 million, including $45 million in transformation-related costs, compared to $787 million the previous year. Adjusted operating profit increased by 14 percent despite currency translation impacts, driven by gross profit gains partially offset by planned expense increases.

Net interest expense decreased to $57 million from $66 million in the prior year. The effective tax rate for the first quarter was 23.6 percent, down from 24.5 percent in the prior year, both on a reported and adjusted basis.

Diluted EPS increased by 14 percent to $1.91, with adjusted EPS rising by 20 percent to $2.01, primarily driven by increased adjusted operating profit, lower net interest, a reduced effective tax rate, and higher equity income.

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