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Kimberly-Clark Corporation (KMB - Free Report) posted first-quarter 2024 results, with the bottom line increasing year over year and surpassing the Zacks Consensus Estimate. The top line also surpassed the consensus mark but declined year over year. Taking into account a solid start to fiscal 2024, management raised its annual guidance.
Quarter in Detail
Adjusted earnings came in at $2.01 per share, surpassing the Zacks Consensus Estimate of $1.61. The bottom line increased 20% year over year, courtesy of higher adjusted operating profit. Reduced net interest, effective tax rate as well as increased equity income were upsides.
Kimberly-Clark’s sales totaled $5,149 million, surpassing the consensus estimate of $5,075.8 million. The metric inched down 1% compared with the year-ago period’s figure. Unfavorable foreign currency rates affected sales by nearly 5% and the divestiture of KMB’s tissue and K-C Professional business in Brazil dented sales by about 1%.
Organic sales increased 6% on the back of a 4% rise in price stemming from pricing actions undertaken to tackle increased local costs in hyperinflationary economies, especially across Argentina. Product mix and volume were favorable by 1% each, with strength across North America, Developing and Emerging (D&E) markets, and Developed Markets.
In North America, organic sales rose 3% year over year, which included 2% growth in Personal Care and a 6% increase in Consumer Tissue. These were somewhat offset by a 1% decline in the K-C Professional.
Outside North America, organic sales rose 15% in developing and emerging markets. In the developed markets (Australia, South Korea and Western/Central Europe), the metric fell 2%.
Kimberly-Clark Corporation Price, Consensus and EPS Surprise
The gross margin expanded 390 basis points (bps) to 37.1%. The upside can be attributed to organic growth and gross productivity gains. However, cost inflation, mainly in developing markets and supply chain-related investments, remained concerning.
The operating profit came in at $853 million, up from $787 million reported in the year-ago quarter. Adjusted operating profit jumped 14% despite the adverse impact of unfavorable currency translations to the tune of 12 percentage points stemming from hyperinflationary economies.
Segment Details
Personal Care: Segment sales of $2,713 million remained flat year over year, surpassing our estimate of 0.6% decline. Organic sales rose 10% on a favorable price, mix and volumes. Management highlighted that innovation, strong commercial execution and better supply trends led to volume growth.
Consumer Tissue: Segment sales of $1,599 million dropped 2% year over year. The downside can be attributed to divestitures and business exits. Our model suggested a sales decline of 5.7% in the segment. Organic sales remained flat year over year.
K-C Professional: Segment sales fell 3% to $823 million due to divestitures and business exits. Our model suggested a sales decline of 5.3% in the segment. Organic sales increased 2%. Favorable price realization and product mix countered reduced volumes.
Other Financial Updates
Kimberly-Clark ended the quarter with cash and cash equivalents of $853 million, long-term debt of $7,161 million and total stockholders’ equity of $1,184 million.
Cash provided by operations was $438 million for three months ended Mar 31, 2024. Management incurred capital spending of $194 million in the same time frame. It returned $452 million to shareholders via dividends and share buybacks.
Image Source: Zacks Investment Research
2024 Guidance
Management now anticipates organic net sales to increase in mid-single-digit percentage compared with the earlier view of low-to-mid single-digit growth. Reported net sales growth is likely to reflect an unfavorable currency impact to the tune of nearly 400 bps and a 120-bps headwind from divestitures.
The adjusted operating profit is projected to grow at a low-teens percentage rate at a constant-currency (cc) basis in 2024. Earlier, the company had projected the metric to grow at a high single-digit to low double-digit rate on a cc basis. Adjusted earnings per share (EPS) is now anticipated to grow at a low-teens percentage rate at cc compared with the previous expectation of a high single-digit growth.
This Zacks Rank #3 (Hold) stock has increased 9.2% in the past three months against the industry’s decline of 2.6%.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 18.7% and 30.5%, respectively, from the year-ago reported numbers.
Utz Brands Inc. (UTZ - Free Report) manufactures a diverse portfolio of salty snacks, currently carrying a Zacks Rank #2. UTZ has a trailing four-quarter earnings surprise of 2.6% on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year earnings suggests growth of 19.3% from the year-ago reported numbers.
Celsius Holdings (CELH - Free Report) , which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2. CELH has a trailing four-quarter earnings surprise of 67.4%, on average.
The Zacks Consensus Estimate for Celsius Holdings’ current financial-year sales and earnings suggests growth of 41.6% each from the year-ago reported figures.
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Kimberly-Clark (KMB) Tops Q1 Earnings Estimates, Ups FY24 View
Kimberly-Clark Corporation (KMB - Free Report) posted first-quarter 2024 results, with the bottom line increasing year over year and surpassing the Zacks Consensus Estimate. The top line also surpassed the consensus mark but declined year over year. Taking into account a solid start to fiscal 2024, management raised its annual guidance.
Quarter in Detail
Adjusted earnings came in at $2.01 per share, surpassing the Zacks Consensus Estimate of $1.61. The bottom line increased 20% year over year, courtesy of higher adjusted operating profit. Reduced net interest, effective tax rate as well as increased equity income were upsides.
Kimberly-Clark’s sales totaled $5,149 million, surpassing the consensus estimate of $5,075.8 million. The metric inched down 1% compared with the year-ago period’s figure. Unfavorable foreign currency rates affected sales by nearly 5% and the divestiture of KMB’s tissue and K-C Professional business in Brazil dented sales by about 1%.
Organic sales increased 6% on the back of a 4% rise in price stemming from pricing actions undertaken to tackle increased local costs in hyperinflationary economies, especially across Argentina. Product mix and volume were favorable by 1% each, with strength across North America, Developing and Emerging (D&E) markets, and Developed Markets.
In North America, organic sales rose 3% year over year, which included 2% growth in Personal Care and a 6% increase in Consumer Tissue. These were somewhat offset by a 1% decline in the K-C Professional.
Outside North America, organic sales rose 15% in developing and emerging markets. In the developed markets (Australia, South Korea and Western/Central Europe), the metric fell 2%.
Kimberly-Clark Corporation Price, Consensus and EPS Surprise
Kimberly-Clark Corporation price-consensus-eps-surprise-chart | Kimberly-Clark Corporation Quote
The gross margin expanded 390 basis points (bps) to 37.1%. The upside can be attributed to organic growth and gross productivity gains. However, cost inflation, mainly in developing markets and supply chain-related investments, remained concerning.
The operating profit came in at $853 million, up from $787 million reported in the year-ago quarter. Adjusted operating profit jumped 14% despite the adverse impact of unfavorable currency translations to the tune of 12 percentage points stemming from hyperinflationary economies.
Segment Details
Personal Care: Segment sales of $2,713 million remained flat year over year, surpassing our estimate of 0.6% decline. Organic sales rose 10% on a favorable price, mix and volumes. Management highlighted that innovation, strong commercial execution and better supply trends led to volume growth.
Consumer Tissue: Segment sales of $1,599 million dropped 2% year over year. The downside can be attributed to divestitures and business exits. Our model suggested a sales decline of 5.7% in the segment. Organic sales remained flat year over year.
K-C Professional: Segment sales fell 3% to $823 million due to divestitures and business exits. Our model suggested a sales decline of 5.3% in the segment. Organic sales increased 2%. Favorable price realization and product mix countered reduced volumes.
Other Financial Updates
Kimberly-Clark ended the quarter with cash and cash equivalents of $853 million, long-term debt of $7,161 million and total stockholders’ equity of $1,184 million.
Cash provided by operations was $438 million for three months ended Mar 31, 2024. Management incurred capital spending of $194 million in the same time frame. It returned $452 million to shareholders via dividends and share buybacks.
Image Source: Zacks Investment Research
2024 Guidance
Management now anticipates organic net sales to increase in mid-single-digit percentage compared with the earlier view of low-to-mid single-digit growth. Reported net sales growth is likely to reflect an unfavorable currency impact to the tune of nearly 400 bps and a 120-bps headwind from divestitures.
The adjusted operating profit is projected to grow at a low-teens percentage rate at a constant-currency (cc) basis in 2024. Earlier, the company had projected the metric to grow at a high single-digit to low double-digit rate on a cc basis. Adjusted earnings per share (EPS) is now anticipated to grow at a low-teens percentage rate at cc compared with the previous expectation of a high single-digit growth.
This Zacks Rank #3 (Hold) stock has increased 9.2% in the past three months against the industry’s decline of 2.6%.
Appetizing Food Picks
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2 (Buy). VITL has a trailing four-quarter average earnings surprise of 155.4%. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 18.7% and 30.5%, respectively, from the year-ago reported numbers.
Utz Brands Inc. (UTZ - Free Report) manufactures a diverse portfolio of salty snacks, currently carrying a Zacks Rank #2. UTZ has a trailing four-quarter earnings surprise of 2.6% on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year earnings suggests growth of 19.3% from the year-ago reported numbers.
Celsius Holdings (CELH - Free Report) , which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2. CELH has a trailing four-quarter earnings surprise of 67.4%, on average.
The Zacks Consensus Estimate for Celsius Holdings’ current financial-year sales and earnings suggests growth of 41.6% each from the year-ago reported figures.