- Delivers net sales of $5.0 billion on 1 percent organic sales growth
- Results and outlook reflect strong in-market execution, effective cost management and productivity
DALLAS, Oct. 22, 2024 - Kimberly-Clark Corporation (NYSE: KMB) today reported third quarter 2024 results driven by market-leading consumption growth from pioneering, innovative new products, and leveraging sustained productivity momentum.
"Our third quarter results reflect strong execution across the business as we transform our organization," said Kimberly-Clark Chairman and CEO, Mike Hsu. "I'm very proud of our teams' ability to deliver organic top-and-bottom-line growth, driven by market share gains and improved productivity, even against the backdrop of a dynamic consumer environment."
Hsu continued, "With our Powering Care strategy in full swing, we are accelerating our innovation pipeline and reducing costs to deliver higher-quality consumer solutions for every price point, and simplifying our operational structure so that we can be faster and more responsive in our markets. We are on track to deliver strong operating profit, margin, and EPS growth in 2024 while investing to maintain our business momentum into 2025."
Quarter Highlights
- Net sales of $5.0 billion were down 4 percent, with organic sales growth of 1 percent versus the prior year.
- Reported gross margin was 36.0 percent, adjusted gross margin was 36.7 percent, up 90 basis points versus the prior year, driven by strong gross productivity gains.
- Diluted earnings per share were $2.69; adjusted earnings per share were $1.83, up 5 percent versus prior year including a $0.07 year-on-year headwind from currency translation.
Third Quarter 2024 Results
Third quarter sales of $5.0 billion were 4 percent lower than the prior-year period, including negative impacts of approximately 3 percent from foreign currency translation and approximately 1 percent from the divestiture of the K-C Professional Personal Protective Equipment (PPE) business completed in July 2024. Organic sales increased 1 percent, driven by a 1 percent increase in price while volume and mix were in line with a year ago. Price-led gains reflected necessary pricing actions to address higher local costs in hyperinflationary economies, mainly in Argentina. Volume and mix were positive in Developed Markets (representing Australia, South Korea and Western/Central Europe) offset by a decline in North America while volumes in Developing and Emerging (D&E) markets were in line with year ago.
In North America, organic sales decreased 1 percent versus the prior year, driven by a 3 percent decline in K-C Professional and 1 percent in Consumer Tissue while Personal Care was in line with year ago.
In D&E markets, organic sales rose 8 percent reflecting pricing gains primarily in hyperinflationary economies. Organic sales for Developed Markets were 2 percent lower, driven by lower pricing that primarily reflected comparisons with temporary, energy surcharge-related price increases in Western Europe in the prior-year period partially offset by low single digit volume led gains.
Third quarter operating profit was $1.2 billion, including $565 million of gains from the divestiture of the PPE business. Adjusted operating profit increased by 5 percent despite an unfavorable impact of 4 percentage points from currency translation that was primarily driven by hyperinflationary economies. Excluding currency impacts, growth in adjusted operating profit reflected gross productivity gains, relatively neutral pricing net of cost inflation, supply chain related investments, as well as planned increases in marketing, research and general expenses.
Net interest expense was $49 million versus $56 million in the prior-year.
The third quarter effective tax rate was 20.5 percent. On an adjusted basis, the effective rate in the third quarter was 22.7 percent compared to 22.5 percent in the prior year.
Net income of equity companies was $48 million compared to $50 million in the prior-year period.
Diluted EPS was $2.69 on a reported basis and included a positive $1.34 impact from the sale of the PPE business, a negative $0.31 impact from costs related to the company's Transformation Initiative and a negative $0.17 impact from impairment of intangible assets. On an adjusted basis, EPS increased 5 percent to $1.83, driven primarily by the 5 percent increase in adjusted operating profit.
Source: Kimberly-Clark