Huggies Maker Kimberly-Clark's Q3: 2% Topline Growth, EPS Beat, Revised FY23 Outlook & More

Kimberly-Clark Corp KMB reported Q3 FY23 sales growth of 2% Y/Y to $5.13 billion, missing the analyst consensus estimate of $5.15 billion.

Organic sales increased by 5% driven by a 5% increase in price and favorable product mix and ongoing revenue growth management programs, offset by a 1% decrease in volume.

In North America, organic sales rose 9% in Personal Care, 4% in Consumer Tissue, and 7% in K-C Professional. 

Gross margin expanded 530 bps Y/Y to 35.8%, led by higher net revenue realization, cost savings, and favorable input costs.

Operating income rose 18% Y/Y to $774 million, with an operating margin of 15.1%.

Adjusted EPS of $1.74 beat the analyst consensus of $1.59.

In the first nine months, the company completed share repurchases worth $97 million.

Cash provided by operations year-to-date was $2.3 billion. The company held $814 million in cash and cash equivalents as of September 30, 2023.

"I'm proud of how our teams around the world are executing our growth strategy. Our innovation and commercial capabilities continue to enhance the value proposition of our brands, while strong execution of our revenue growth management and ongoing productivity programs enabled us to restore gross margin to pre-pandemic levels," said Mike Hsu, Chairman and CEO.

FY23 Outlook: Kimberly-Clark narrowed organic sales growth guidance to 4%-5% (from 3%-5%). The Irving, Texas-based company raised its adjusted EPS growth outlook to 15%-17% (from 10%-14%).

It also raised the FY23 operating margin outlook to an expansion of 170 bps from 150 bps earlier.

Also Read: From Caution To Consideration: Why Analyst Is More Optimistic On Kimberly-Clark And Clorox Now

Price Action: KMB shares are trading hgher by 1.15% at $123.21 on the last check Tuesday.