Zinger Key Points
- Kimberly-Clark's Q4 adjusted EPS of $1.50 surpassed estimates, but sales fell 0.8% to $4.90 billion.
- The company faces challenges from manufacturing costs, divestitures, and 240 basis point decline from exiting private label diaper business.
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Kimberly-Clark Corporation KMB shares are trading lower in the premarket session on Tuesday.
The company reported fourth-quarter adjusted earnings per share of $1.50, beating the street view of $1.51. Quarterly sales of $4.90 billion (down 0.8%) outpaced the analyst consensus estimate of $4.86 billion.
In the fourth quarter, North American net sales dropped 0.5% to $2.7 billion, International Personal Care sales fell 1.3% to $1.4 billion, and IFP sales declined 1.2% to $831 million.
Kimberly-Clark’s quarterly organic sales were up 2.3% in the quarter under review, driven by the highest quarterly volume growth of the year at 1.5%, a 0.6% increase in price from ongoing revenue growth management programs, and a 0.1% contribution from a favorable product mix.
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The company’s quarterly adjusted gross margin was 35.4%, up 50 basis points versus the prior year. Strong productivity gains were partly offset by investments and manufacturing cost headwinds.
Adjusted operating profit was $684 million, up 2.1% from the prior year, despite a 1.8% negative impact from currency translation and divestitures.
The company completed share repurchases of 7.2 million shares at a cost of $1 billion in 2024. Total debt was $7.4 billion as of December 31, 2024
Guidance: The company expects currency translation to impact net sales by about 300 basis points. Additionally, it anticipates a 240 basis point decline from its PPE divestiture and exiting the US private label diaper business.
Kimberly-Clark expects Adjusted Earnings Per share to grow at a mid-to-high single-digit rate on a constant-currency basis
Dividend: The company declared an increased quarterly dividend of $1.26 per share, a level 3.3% higher than its previous regular quarterly payout. The dividend is payable on April 2.
Price Action: KMB shares are trading lower by 1.07% to $130.00 premarket at last check Tuesday.
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