Kimberly-Clark Corporation (NASDAQ:KMB) shares are trading slightly higher on Tuesday after the firm reported first-quarter results with adjusted earnings beating estimates and revenue coming in ahead of expectations.
Sales growth was supported by organic gains and strength in international personal care, even as North America sales faced pressure from the exit of its private label diaper business.
Quarterly Performance Details
The company reported first-quarter adjusted earnings per share of $1.97, beating the analyst consensus estimate of $1.89.
Quarterly sales of $4.163 billion (+2.7% year over year) outpaced the Street view of $4.088 billion. The firm registered organic sales growth of 2.5%.
North America net sales totaled $2.7 billion, down 0.6% in the quarter, driven by a 2.7% impact from the exit of the company’s private label diaper business in the U.S.
International Personal Care net sales were $1.5 billion, up 9.1% year over year.
Adjusted gross margin was 37.9%, down 60 basis points versus the prior year.
Adjusted operating profit was $732 million, up 3.7% versus the prior year, driven by strong productivity savings, lower marketing, research and general expenses reflecting overhead savings and favorable currency translation.
Current quarter results included a $120 million benefit related to the settlement of insurance claims from a previous acquisition, and $99 million of charges related to the 2024 Transformation Initiative and Kenvue acquisition.
Cash provided by operations (inclusive of discontinued operations) was $745 million compared to $327 million last year.
Outlook
Kimberly-Clark expects 2026 organic sales growth to be in line with or ahead of its categories, which grew about 2.5% over the past year.
Reported net sales are projected to reflect a 50 basis point headwind from the exit of its U.S. private label diaper business, offset by a similar benefit from currency.
Adjusted operating profit is expected to grow at a mid-to-high single-digit rate, while adjusted EPS from continuing operations is forecast to rise at a double-digit pace, supported by higher equity income and a roughly 23% tax rate.
Adjusted EPS attributable to the company is expected to be flat on a constant-currency basis, with currency translation providing a favorable impact of about 170 basis points.
KMB Price Action: Kimberly-Clark shares were up 0.76% at $98.99 at the time of publication on Tuesday, according to Benzinga Pro data.
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