Kimberly-Clark +5% After Q1 Results - Here's Why

Kimberly-Clark Corporation KMB shares are gaining in the premarket session on Tuesday.

The company reported first-quarter adjusted earnings per share of $2.01, beating the analyst consensus of $1.63.

Quarterly revenues of $5.149 billion topped the street view of $5.085 billion. Net sales were down 1%, with organic sales growth of 6% versus the prior year.

Gross margin was 37.1%, up 390 basis points versus the prior year, driven by organic net sales growth and gross productivity gains.

Price-led gains reflected necessary pricing actions to address higher local costs in hyperinflationary economies, mainly in Argentina. 

Volume and mix were positive across North America, developing and emerging (D&E), and developed markets (represented Australia, South Korea, and Western/Central Europe).

Adjusted operating profit increased by 14% despite an unfavorable impact of 12 percentage points from currency translation, primarily driven by hyperinflationary economies.

Year-to-date capital spending was $194 million compared to $201 million last year. 

The company returned $452 million to shareholders through dividends and repurchases of common stock. 

Total debt was $8 billion as of March 31, 2024, consistent with December 31, 2023.

Outlook: Organic net sales is now expected to grow mid-single digits (prior view: low-to mid-single-digit growth). 

The company now expects reported net sales to be negatively impacted by 400 basis points of currency translation and 120 basis points from divestitures (prior view: 300 basis points and 60 basis points, respectively).

Adjusted EPS is now expected to grow at a low-teens percentage rate on a constant-currency basis (prior view: high-single-digit growth).

Price Action: KMB shares are trading higher by 5.5% to $136.02 premarket at the last check Tuesday.

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