Kimberly-Clark Shares Tumble After Missing Revenue Targets Despite Earnings Growth

Kimberly-Clark Corporation KMB shares are trading lower following mixed second-quarter earnings.

Kimberly-Clark reported quarterly adjusted earnings per share of $1.96 (+19%), beating the analyst consensus of $1.71.

Quarterly revenues of $5.029 billion, missing the street view of $5.109 billion.

Sales in the second quarter reflected a 2% decline from the previous year, influenced by a 5% currency translation impact and a 1% decrease due to the divestiture of the Tissue and K-C Professional business in Brazil in June 2023.

Innovation-led volume gains, effective cost management, and productivity drove substantial EPS expansion.

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The company’s adjusted gross margin was 36.9%, up 290 basis points versus the prior year, driven by organic net sales growth and gross productivity gains.

Net interest expense was $63 million versus $67 million in the prior-year period.

The company exited the quarter with cash and equivalents worth $1.163 billion. Inventories totaled $1.915 billion.

Outlook: Kimberly-Clark still expects FY24 organic net sales to grow at a mid-single-digit rate.

Reported net sales are still expected to be negatively impacted by 400 basis points of currency translation and 120 basis points from divestitures.

Adjusted EPS is now expected to grow at a mid-to-high teens percentage rate on a constant-currency basis, an increase from previous expectations of low-teens growth.

“Our focus is to deliver high-quality consumer solutions at every price point, increase our operational scale, and enhance our long-term potential,” said Kimberly-Clark Chairman and CEO Mike Hsu. 

“We’re excited about our opportunities to capitalize on our momentum to deliver our enduring goal of enhancing value for all our stakeholders,” Hsu added.

Price Action: KMB shares are trading lower by 3.9% to $138.51 at last check Tuesday.

Photo via Wikimedia Commons

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