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Kimberly-Clark reports sales down 5% in Q1 2020

Kimberly-Clark Corporation has released its first-quarter 2021 results, citing a five per cent decrease of sales compared to the year-ago period.

First-quarter 2021 net sales were $4.7 billion, and diluted net income per share for the first quarter was $1.72 in 2021 and $1.92 in 2020.

“Our first-quarter results and updated outlook reflect a volatile and challenging environment. First-quarter comparisons were impacted by COVID-19 related stock up in the year-ago period, consumer tissue category softness and commodity inflation,” says Mike Hsu, chair of Kimberly-Clark Corporation, in a statement.

“We also experienced temporary supply chain disruptions related to severe weather conditions in the southern part of the United States. Nonetheless, our market shares remain healthy overall as we leverage our enhanced commercial capabilities. In addition, we continue to achieve strong cost savings, return cash to shareholders and are taking decisive actions to mitigate commodity headwinds.

“While our updated outlook reflects a more challenging near-term environment, our business remains fundamentally healthy and we are confident in our strategies to create long-term shareholder value.”

Q1 2020 operating results

Sales of $4.7 billion in the first quarter of 2021 decreased five per cent versus the prior year. The Softex Indonesia acquisition increased sales two per cent and changes in foreign currency exchange rates increased sales slightly.

Volumes declined 10 per cent compared to an increase of more than eight per cent in the year-ago period, while net selling prices and product mix each improved one per cent.

The volume comparison reflects increased shipments in the year-ago period to support consumer stock-up related to the outbreak of COVID-19. The stock up impacted all business segments, in particular consumer tissue, and all major geographies.

In addition, volumes in North American consumer products in 2021 were negatively impacted by supply chain disruptions related to severe weather conditions that occurred in February in the southern part of the United States. The disruptions included the temporary shutdown of several company manufacturing facilities and reduced availability of raw materials from suppliers, mostly impacting the company’s personal care segment.

In North America, organic sales decreased 10 per cent in consumer products and eight per cent in K-C Professional. Outside North America, organic sales were down one per cent in developing and emerging (D&E) markets and 14 per cent in developed markets.

Consumer tissue segment

First-quarter sales of $1.5 billion decreased 12 per cent. Volumes declined approximately 14 per cent while changes in currency rates increased sales about one per cent.

The volume comparison reflects increased shipments in the year-ago period to support consumer stock up related to the outbreak of COVID-19, along with category softness in 2021.

First-quarter operating profit of $269 million decreased 26 per cent. The comparison was impacted by lower organic sales, higher input costs and other manufacturing cost increases. Results benefited from cost savings, lower advertising spending and reduced general and administrative costs.

Sales in North America decreased 14 per cent. Volumes fell 14 per cent and product mix was down two per cent, while net selling prices improved two per cent. The volume decline reflects stock up in the year-ago period and category softness in 2021, primarily in bathroom and facial tissue.

For the full Q1 2020 financial report from Kimberly-Clark Corporation, including personal care and 2021 outlook, click here.