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Kimberly-Clark (KMB) Looks Scrumptious on Cost-Saving Efforts
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Kimberly-Clark Corporation (KMB - Free Report) looks well positioned on the back of its robust growth-oriented strategies. We note that shares of the company have gained 7.7% in the past year against the industry’s decline of 9%. Also, the stock has outperformed the sector’s fall of 6.5% in the same period.
Strategic Initiatives to Boost Growth
Kimberly-Clark is committed toward its three key strategic growth pillars. These include focus on improving its core business in the developed markets; accelerate growth of Personal Care segment in developing and emerging markets and enhance digital and e-commerce capacities. The company expects to meet these objectives through product development across different categories and leveraging capabilities in marketing and sales.
Additionally, management introduced a K-C Strategy 2022 in January 2019. The strategy is focused on generating balanced and sustainable growth to return value to shareholders in a tough environment. The program also concentrates on strengthening the company’s brand portfolio, undertaking efficient capital allocation and executing robust cost discipline.
Cost-Saving Efforts Bode Well
Kimberly-Clark has been undertaking initiatives to save costs for a while. This is evident from the 2018 Global Restructuring Program and Focus on Reducing Costs Everywhere or FORCE Program. The 2018 Global Restructuring Program, which is the company’s biggest restructuring plan, focuses on enhancing its profitability by simplifying the supply chain and manufacturing structures. This enables Kimberly-Clark to compete better and provides it more flexibility to undertake growth-oriented investments. Until the end of first-quarter 2020, Kimberly-Clark generated cumulative savings worth $325 million from the 2018 Global Restructuring Program. Moreover, management is aggressively cutting costs and enhancing supply-chain productivity through its FORCE Program. The program is generating solid cost savings for a while, which are driving adjusted operating profit.
High Demand Amid Coronavirus Woes
Kimberly-Clark is witnessing a spike in demand due to the panic-buying trends amid the coronavirus outbreak. In this regard, the company has been undertaking a number of measures to increase production of essential commodities. Also, Kimberly-Clark has been reallocating inventory to provide consumers with greater access to its products amid the crisis. Impressively, these trends continued in first-quarter 2020, wherein adjusted earnings improved 28% from the year-ago quarter’s reported figure. Further, sales increased 8% year over year. In the first quarter, organic revenues rose 11% owing to a more than 8% rise in volumes from consumer stockpiling amid the coronavirus outbreak.
Wrapping Up
Kimberly-Clark has been seeing a rise in marketing, research and general expenses for the last few quarters. In fact, the metric rose 14% in the first quarter of 2020. Also, softness in K-C Professional segment along with unfavorable foreign currency translation are threats to the company’s performance.
Nevertheless, we believe that the aforementioned upsides are likely to keep aiding this Zacks Rank #2 (Buy) company’s growth in the future.
The Clorox Company (CLX - Free Report) , which sports Zacks Rank #1, has a long-term earnings growth rate of 5.8%.
Nu Skin Enterprises (NUS - Free Report) with a Zacks Rank #2, has a long-term earnings growth rate of 1.7%.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys. Access Zacks Top 10 Stocks for 2020 today >>
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Kimberly-Clark (KMB) Looks Scrumptious on Cost-Saving Efforts
Kimberly-Clark Corporation (KMB - Free Report) looks well positioned on the back of its robust growth-oriented strategies. We note that shares of the company have gained 7.7% in the past year against the industry’s decline of 9%. Also, the stock has outperformed the sector’s fall of 6.5% in the same period.
Strategic Initiatives to Boost Growth
Kimberly-Clark is committed toward its three key strategic growth pillars. These include focus on improving its core business in the developed markets; accelerate growth of Personal Care segment in developing and emerging markets and enhance digital and e-commerce capacities. The company expects to meet these objectives through product development across different categories and leveraging capabilities in marketing and sales.
Additionally, management introduced a K-C Strategy 2022 in January 2019. The strategy is focused on generating balanced and sustainable growth to return value to shareholders in a tough environment. The program also concentrates on strengthening the company’s brand portfolio, undertaking efficient capital allocation and executing robust cost discipline.
Cost-Saving Efforts Bode Well
Kimberly-Clark has been undertaking initiatives to save costs for a while. This is evident from the 2018 Global Restructuring Program and Focus on Reducing Costs Everywhere or FORCE Program. The 2018 Global Restructuring Program, which is the company’s biggest restructuring plan, focuses on enhancing its profitability by simplifying the supply chain and manufacturing structures. This enables Kimberly-Clark to compete better and provides it more flexibility to undertake growth-oriented investments. Until the end of first-quarter 2020, Kimberly-Clark generated cumulative savings worth $325 million from the 2018 Global Restructuring Program. Moreover, management is aggressively cutting costs and enhancing supply-chain productivity through its FORCE Program. The program is generating solid cost savings for a while, which are driving adjusted operating profit.
High Demand Amid Coronavirus Woes
Kimberly-Clark is witnessing a spike in demand due to the panic-buying trends amid the coronavirus outbreak. In this regard, the company has been undertaking a number of measures to increase production of essential commodities. Also, Kimberly-Clark has been reallocating inventory to provide consumers with greater access to its products amid the crisis. Impressively, these trends continued in first-quarter 2020, wherein adjusted earnings improved 28% from the year-ago quarter’s reported figure. Further, sales increased 8% year over year. In the first quarter, organic revenues rose 11% owing to a more than 8% rise in volumes from consumer stockpiling amid the coronavirus outbreak.
Wrapping Up
Kimberly-Clark has been seeing a rise in marketing, research and general expenses for the last few quarters. In fact, the metric rose 14% in the first quarter of 2020. Also, softness in K-C Professional segment along with unfavorable foreign currency translation are threats to the company’s performance.
Nevertheless, we believe that the aforementioned upsides are likely to keep aiding this Zacks Rank #2 (Buy) company’s growth in the future.
Other Consumer Staple Picks
Helen of Troy (HELE - Free Report) which sports a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Clorox Company (CLX - Free Report) , which sports Zacks Rank #1, has a long-term earnings growth rate of 5.8%.
Nu Skin Enterprises (NUS - Free Report) with a Zacks Rank #2, has a long-term earnings growth rate of 1.7%.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>