Kimberly-Clark reports operating profit of $787 million during first quarter

Kimberly-Clark released its results for the first quarter of 2023, reporting operating profit of $787 million – up from $693 million between January and March of 2022 –, with an operating margin of 15.1%. On an adjusted basis, operating profit increased 25%, driven by higher gross profit.

Diluted earnings per share were $1.67, up 8 %; up 24 % versus adjusted earnings per share last year.

First quarter sales of $5.2 billion increased 2%, with organic sales up 5%, driven by a 10% increase in price and favorable product mix from ongoing revenue growth management programs offset by a 5% decrease in volume.

“Our growth strategy continues to deliver behind strong execution of our commercial programs. Revenue growth management initiatives drove continued sales momentum with a better-than-expected elasticity impact on volume. Looking ahead, we have an exciting innovation pipeline that will deliver superior performance in health, wellness and sustainability. With our strong portfolio of trusted brands, we have our sights set on growing our categories and winning with consumers to enable long-term, profitable growth”, said Kimberly-Clark President and CEO Mike Hsu .

“While inflationary pressures have yet to subside, we drove continued improvement in our gross margin this quarter. We will continue to lean into our productivity and cost savings programs to mitigate elevated costs, while strategically investing in future growth platforms that will expand our presence in attractive markets for years to come”, completed Hsu.

Cash provided by operations was $613 million compared to $204 million last year, driven by the increase in operating profit and improvements in working capital. Capital spending was $201 million compared to $253 million last year.

In North America, sales increased 5% over last year, including increases of 2% in personal care, 5% in consumer tissue and 12% in K-C Professional. Outside North America, organic sales were up 4% in developing and emerging (D&E) markets and 10% in developed markets (Australia, South Korea and Western/Central Europe).

 

PERSONAL CARE

Personal care sales of $2.7 billion decreased 1%, while organic sales increased 3%, driven by price and mix, partially offset by lower volume. Organic sales included a 1 percentage point impact from the exit of a private label contract. Successful revenue growth management and commercial execution contributed to favorable trends in net revenue realization and better-than-expected elasticities.

First quarter operating profit of $487 million increased 3%, with organic growth and cost savings partially offset by input cost inflation, higher marketing, research and general expenses and an unfavorable impact from foreign currency.

CONSUMER TISSUE

Consumer tissue sales of $1.6 billion increased 4%, including organic growth of 7%, driven by price partially offset by volume. The segment posted organic growth across all major regions. Successful revenue growth management and improving service levels contributed to top-line growth.

First quarter operating profit of $240 million increased 40 %, with organic growth and cost savings partially offset by input cost inflation, other manufacturing costs and higher marketing, research and general expenses.

KC PROFESSIONAL (KCP)

KCP sales of $847 million increased 9%, including organic growth of 11%, driven by price and mix partially offset by volume. The segment posted organic growth across key categories and regions. Strong revenue growth management contributed to healthy top-line results.

First quarter operating profit of $159 million increased 77%, driven by continued focus on cost discipline and profitable growth.

Following positive results, the company raised its full-year profit outlook as consistent price increases helped the company post better-than-expected first-quarter sales despite weak volumes across all its segments.