Financial Reports & Markets
Kimberly-Clark sees decrease in net sales in Q1 2019 results
By P&PC Staff
By P&PC Staff
April 22, 2019 – Kimberly-Clark Corporation has reported its first-quarter 2019 results, citing a two per cent decrease in net sales over Q1 2018.
First quarter 2019 net sales of $4.6 billion decreased two per cent compared to the year-ago period. Changes in foreign currency exchange rates reduced sales by five per cent, while organic sales increased three per cent including higher net selling prices of four per cent.
Diluted net income per share for the first quarter was $1.31 in 2019 and $0.26 in 2018.
First quarter adjusted earnings per share were $1.66 in 2019 and $1.71 in 2018. Adjusted earnings per share exclude certain items.
The company continues to target full-year 2019 organic sales growth of two per cent and adjusted earnings per share of $6.50 to $6.70.
“I’m encouraged with our first quarter results. We made excellent progress driving higher selling prices to help offset commodity and currency headwinds,” says Mike Hsu, chief executive officer of Kimberly-Clark Corporation. “We also continued to launch innovations, pursue our growth priorities and invest in our brands. In addition, we generated $115 million of cost savings and returned $510 million to shareholders through dividends and share repurchases. We are confirming our previous full-year outlook while we maintain a strong focus on executing K-C Strategy 2022 for long-term success.”
In the consumer tissue segment, first-quarter sales of $1.5 billion decreased three per cent. Changes in currency rates reduced sales three per cent. Net selling prices increased six per cent, while volumes decreased six per cent compared to a seven per cent increase in the base period. First quarter operating profit of $241 million decreased three per cent. The comparison was impacted by lower volumes, input cost inflation, other manufacturing cost increases and unfavorable currencies, while results benefited from increased net selling prices and cost savings.
Sales in the North America consumer tissue segment decreased three per cent. Net selling prices rose seven percent, while volumes fell 10 per cent compared to a nine per cent increase in the prior year. The volume decline reflects lower promotion activity, the impact of price increases and a severe cold and flu season in the year-ago period that benefited facial tissue sales.
In January 2018, Kimberly-Clark initiated the 2018 Global Restructuring Program, which it expects will generate annual pre-tax cost savings of $500 to $550 million by the end of 2021, driven by workforce reductions along with manufacturing supply chain efficiencies. As part of the program, Kimberly-Clark expects to exit or divest some low-margin businesses that generate approximately one per cent of company net sales. The sales are concentrated in the consumer tissue business segment.
Read the full Kimberly-Clark Q1 2019 financial report.