Kimberly-Clark Corporation KMB has reported fourth-quarter 2024 results, wherein earnings came in line with the Zacks Consensus Estimate and declined year over year. Meanwhile, sales surpassed the consensus mark but declined year over year. The company announced a quarterly dividend increase.
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Adjusted earnings were $1.50 per share, in line with the Zacks Consensus Estimate. The bottom line inched down 0.7% year over year, courtesy of reduced income from equity companies. These were somewhat offset by increased adjusted operating profit and reduced diluted shares outstanding.
Kimberly-Clark’s sales totaled $4,928 million, surpassing the consensus estimate of $4,834.6 million. However, the metric inched down 0.8% compared with the year-ago period’s figure. Unfavorable foreign currency exchange rates negatively impacted sales by roughly 1.7%, while the divestiture of the Personal Protective Equipment (PPE) business reduced sales by around 1.4%.
Kimberly-Clark’s results highlight the effectiveness of its innovation-driven growth model, which boosted volume, enhanced product mix and delivered significant efficiencies that supported reinvestment in its brands, new capabilities and shareholder returns. The company achieved organic top-line growth, driven by an increase in volume and mix. Combined with improved productivity, this growth led to robust adjusted profit performance and fueled strategic investments to strengthen its competitive position.
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A Closer Look at KMB’s Q4 Results
The company’s organic sales increased by 2.3%, driven by quarterly volume growth of 1.5%. This was complemented by a 0.6% rise in prices from ongoing revenue growth management initiatives and a 0.1% boost from a favorable product mix. All business segments experienced volume growth during the quarter.
The adjusted gross margin reached 35.4%, marking a 50-basis point (bps) increase, on the back of solid productivity savings and volume gains. However, this was partially offset by increased manufacturing costs, supply chain investments, and negative pricing, net of input cost inflation, stemming from the timing of price and cost realizations.
The adjusted operating profit totaled $684 million, reflecting a 2.1% increase, despite an unfavorable impact from currency translation of 1.8% and a 1.8% decline from divestitures. This growth was driven by an increase in adjusted gross profit dollars, which was partially offset by planned higher expenses in marketing, research, selling and general operations.
KMB Provides Fourth-Quarter Insights by Segment
Kimberly-Clark unveiled its transformative, multi-year "Powering Care" strategy and successfully restructured its organization into three key segments, outlined below.
North America (NA) segment net sales reached $2,722 million, marking a 0.5% decline, while organic sales increased by 1.1%, primarily driven by 1.9% growth in volume. The growth was fueled by strong performance in Adult Care and Baby and Child Care, with innovation and effective commercial execution contributing to share gains during the quarter.
The segment operating profit was $548 million, reflecting a 10% decrease. This was primarily due to a planned double-digit rise in marketing expenses, higher strategic capability investments and additional manufacturing and distribution costs linked to temporary supply chain disruptions. In addition, negative pricing and net of cost inflation were a downside. These challenges were partially offset by productivity gains.
The International Personal Care (IPC) segment net sales were $1,375 million, down 1.3%, while organic sales rose 5.3%. This increase was driven by a 4.1% rise in pricing and 0.9% volume growth. The pricing gains were largely attributed to hyperinflationary economies, while volume growth was led by double-digit increases in China.
The segment's operating profit reached $155 million, marking a 36% increase. This growth was primarily driven by a reduced impact from monetary losses in hyperinflationary economies. In addition, solid productivity savings and positive pricing, net of cost inflation, supported higher investments in advertising and selling expenses.
The International Family Care & Professional (IFP) segment reported net sales of $831 million, a 1.2% decline. Organic sales grew by 0.7%, driven by a 1% volume increase, partially offset by a 0.5% negative pricing impact. Volume growth was primarily supported by strong performance in Family Care across Western & Central Europe and Australia.
The segment’s operating profit reached $89 million, reflecting a 30.9% increase. This growth was fueled by productivity savings, higher volume and improved asset utilization, which more than offset investments in advertising and a planned increase in research, selling and general expenses.
Kimberly-Clark Corporation Price, Consensus and EPS Surprise
Kimberly-Clark Corporation Price, Consensus and EPS Surprise
This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $1,021 million, long-term debt of $6,875 million and total stockholders’ equity of $975 million.
For the 12 months ended Dec. 31, cash provided by operations was $3,234 million. Management incurred capital spending of $721 million in the same time frame. It returned $2.6 billion to its shareholders via dividends and share buybacks during 2024. The company repurchased 7.2 million shares for a total cost of $1 billion.
In a separate press release, the company announced a quarterly dividend hike of 3.3% to $1.26 per share. The dividend will be paid out on April 2, 2025, to its shareholders of record as of March 7. This marks the company’s 53rd consecutive year of increasing its dividend.
What to Expect From KMB in 2025
In line with its long-term growth strategy, Kimberly-Clark expects 2025 organic sales growth to exceed the weighted average growth in the markets and categories it operates in, which are presently growing at around 2%.
For 2025, the company’s net sales are projected to be adversely impacted by almost 300 bps due to unfavorable currency rates and a 240 bps decline resulting from the divestiture of its PPE business and the exit from its private label diaper operations in the United States.
The adjusted operating profit is anticipated to increase at a high single-digit rate on a constant-currency basis, which includes a 320-bps negative impact from the PPE divestiture and the exit from the private label diaper business. Operating profit growth will also face a negative impact of about 300 bps from unfavorable currency rates.
For 2025, adjusted earnings per share (EPS) are forecasted to increase at a mid-to-high single-digit rate on a constant-currency basis, including a 320-bps adverse impact from the divestitures and a 100-bps negative impact from factors below operating profit, such as increased net interest expense, a higher effective adjusted tax rate and lower shares outstanding. In addition, EPS is likely to reflect an adverse impact of 350-400 bps from currency translation, including the effect on income from equity interests.
KMB’s stock has dropped 2.3% in the past three months compared with the industry’s decline of 2.9%.
Here’s How Better-Ranked Stocks Fared
We have highlighted some better-ranked stocks from the broader Consumer Staples space, namely Energizer ENR, Ollie's Bargain Outlet OLLI and Helen of Troy HELE.
Energizer is one of the world’s leading manufacturers and distributors of batteries and lighting products. It currently has a Zacks Rank #2 (Buy). ENR has a trailing four-quarter earnings surprise of 8.3%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Energizer’s current financial-year sales and EPS suggests growth of 1.3% and 7.8%, respectively, from the year-ago reported numbers. The consensus mark for ENR’s EPS has been unchanged in the past 30 days.
Ollie's is a value retailer of brand-name merchandise at drastically reduced prices. The company currently carries a Zacks Rank #2. OLLI has a trailing four-quarter earnings surprise of 5%, on average.
The Zacks Consensus Estimate for Ollie's current financial year’s sales and EPS suggests growth of 8.3% and 13.1%, respectively, from the year-ago reported numbers. The consensus mark for OLLI’s EPS has been unchanged in the past 30 days.
Helen of Troy, a leading consumer products player that operates through a diversified portfolio of renowned brands, currently carries a Zacks Rank #2. HELE has a trailing four-quarter negative earnings surprise of 4.3%, on average.
The Zacks Consensus Estimate for Helen of Troy’s current fiscal-year sales and earnings suggests declines of almost 5% and 18.9%, respectively, from the year-ago quarter’s reported figures.
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