Kimberly-Clark posts mixed Q2 results, shares dip slightly

DALLAS – Kimberly-Clark Corporation (NYSE: NYSE:) announced its second-quarter results, surpassing analyst earnings expectations but falling short on revenue forecasts.

The company reported adjusted earnings per share (EPS) of $1.96, which was $0.25 higher than the analyst estimate of $1.71. However, the reported revenue of $5 billion for the quarter did not meet the consensus estimate of $5.09 billion. Despite the earnings beat, shares of Kimberly-Clark dipped by 1.49% as the market reacted to the revenue shortfall.

The company’s performance this quarter demonstrated a robust 19% increase in adjusted EPS compared to the prior year, despite a 2% decline in net sales. Organic sales growth stood at 4%, driven by a combination of price increases and volume growth. Kimberly-Clark’s strategic pricing actions, particularly in hyperinflationary economies like Argentina, and volume and mix improvements across various markets contributed to this growth.

Chairman and CEO Mike Hsu expressed pride in the company’s advancement of its new operating model and delivery of high-quality results. He highlighted the company’s focus on delivering consumer solutions at every price point and enhancing operational scale to boost long-term potential.

Kimberly-Clark’s operating profit for the quarter was $655 million, with adjusted operating profit rising by 16%. This growth was achieved despite a 7 percentage point unfavorable impact from currency translation, primarily due to hyperinflationary economies.

Excluding currency impacts, the growth in adjusted operating profit was attributed to organic growth and productivity gains, which were partially offset by input cost inflation and increased expenses in marketing, research, and general operations.

Looking ahead, Kimberly-Clark has raised its 2024 outlook based on strong first-half results. The company now expects mid-to-high teens percentage rate growth in adjusted operating profit and adjusted EPS on a constant-currency basis, an upgrade from previous low-teens growth expectations. However, reported operating profit and EPS are still anticipated to be negatively impacted by currency translation.

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