Kimberly-Clark Delivers Solid Results in First Year of Transformation

Mike Hsu

Kimberly-Clark Chairman and CEO, Mike Hsu

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  • 2024 established foundation for Powering Care strategy while delivering an above-algorithm year

  • 2025 outlook reflects continued organic growth and operating momentum as transformation progresses

DALLAS, Jan. 28, 2025 - Kimberly-Clark Corporation (NYSE: KMB) today reported fourth quarter and full year 2024 results that illustrated the strength of its innovation-led growth model, driving volume gains, improving product mix, and generating significant efficiencies enabling reinvestment in its brands, new capabilities, and generating attractive returns to its shareholders.

"2024 was a breakthrough year for Kimberly-Clark with the launch of our transformative, multi-year Powering Care strategy and successfully rewiring our organization into three powerhouse segments with world-class functional support," said Kimberly-Clark Chairman and CEO, Mike Hsu. "Our full-year results exceeded our new long-term growth algorithm - supported by consistent execution across the organization - and we established a strong foundation to accelerate our strategy in 2025 and beyond." 

"We delivered organic top-line growth with an upward inflection in volume-plus-mix. This, coupled with improved productivity, has driven strong adjusted profit growth and fueled investments to advance our competitive advantage." Hsu continued. "We're excited about this new chapter of Kimberly-Clark, and we look forward to building on our momentum and enhancing value for all stakeholders."

Quarter Highlights

  • Delivered net sales of $4.9 billion, down 0.8 percent, with organic sales growth of 2.3 percent.
  • Gross margin was 34.0 percent. Adjusted gross margin was 35.4 percent, up 50 basis points versus the prior year with strong productivity gains partly offset by investments and manufacturing cost headwinds.
  • Operating profit for the quarter was $548 million, while adjusted operating profit was $684 million up 2.1 percent versus the prior year with higher adjusted gross margin enabling higher investments.
  • Diluted earnings per share were $1.34; adjusted earnings per share were $1.50, down 0.7 percent versus prior year driven primarily by lower equity income offset by higher adjusted operating profit.

Fourth Quarter 2024 Results

Fourth quarter sales of $4.9 billion were down 0.8 percent, with organic sales up 2.3 percent, driven by the highest quarterly volume growth of the year at 1.5 percent, a 0.6 percent increase in price from ongoing revenue growth management programs and a 0.1 percent contribution from favorable product mix. All segments grew volume in the quarter. Changes in foreign currency exchange rates reduced sales by approximately 1.7 percent and the divestiture of the Personal Protective Equipment (PPE) business reduced sales by approximately 1.4 percent.

Gross margin was 34.0 percent in the quarter, inclusive of $68 million, or approximately 140 basis points, of charges related to the 2024 Transformation Initiative. Excluding these charges, adjusted gross margin was 35.4 percent, up 50 basis points versus the prior year driven by strong productivity savings and volume gains that were partly offset by higher manufacturing costs and supply chain investments, as well as unfavorable pricing net of input cost inflation due to the timing of price and cost realization.

Fourth quarter operating profit was $548 million, inclusive of 2024 Transformation Initiative charges and other items not reflective of our underlying operations totaling $136 million, compared to $670 million last year. Excluding these items, adjusted operating profit was $684 million up 2.1 percent versus the prior year including an unfavorable impact from currency translation of 1.8 percent and an unfavorable impact from divestitures of 1.8 percent. This reflected the increase in adjusted gross profit dollars that was partly offset by planned increases in marketing, research, selling and general expenses.

Net interest expense was $53 million, 39.5 percent higher than prior year driven by lower interest income.

Fourth quarter effective tax rate was 14.8 percent. On an adjusted basis, the effective rate in the fourth quarter was 25.2 percent, in line with the prior year.

Net income of equity companies was $44 million compared to $53 million last year, primarily driven by the adverse impact of currency translation on earnings related to Kimberly-Clark de Mexico.

Diluted EPS in the quarter were $1.34 on a reported basis, down from $1.50 the prior year due to charges related to the company's 2024 Transformation Initiative. On an adjusted basis, EPS decreased 0.7 percent to $1.50 as benefits from the growth in adjusted operating profit and lower diluted shares outstanding were offset by the reduction in income from equity companies.

Full Year 2024 Results

2024 net sales of $20.1 billion were 1.8 percent lower than the prior year due to negative impacts of approximately 3.8 percent from foreign currency translation and 1.2 percent from divestitures. Organic sales grew 3.2 percent, driven by an approximately 1.9 percent increase in price, primarily in hyperinflationary economies, a 0.8 percent increase in volume and a 0.4 percent benefit from favorable product mix.

2024 gross margin was 35.8 percent, inclusive of $144 million, or approximately 70 basis points, of charges related to the 2024 Transformation Initiative. Excluding these charges, 2024 adjusted gross margin was 36.5 percent, a meaningful expansion of 200 basis points versus the prior year driven by strong productivity savings, favorable pricing net of cost inflation, volume and mix led gains partly offset by manufacturing cost headwinds.

2024 operating profit was $3.2 billion, including $565 million of gains from the divestiture of the company's PPE business, and $456 million of charges related to the company's 2024 Transformation Initiative.

2024 adjusted operating profit was $3.2 billion versus $3.0 billion in the prior year. This was an increase of 9.4 percent versus prior year and included an unfavorable impact of 6.2 percentage points from currency translation, primarily driven by hyperinflationary economies. Excluding these impacts, the growth in adjusted operating profit was driven by a combination of organic growth, strong productivity savings, and favorable pricing net of input cost inflation that were partly offset by supply chain related investments and planned increases in marketing, research and general expenses.

In 2024, diluted earnings per share were $7.55 compared to $5.21 last year. 2024 adjusted earnings per share were $7.30 compared to $6.57 last year, an increase of 11.1 percent, primarily reflecting the strong growth in adjusted operating profit.

Link to full report

Source: Kimberly-Clark