CEO Reports Progress Amid Challenges
- Kimberly-Clark’s stock falls 1.5% after Q2 sales miss estimates
- CEO Mike Hsu: ‘We have made strong progress’
- Net income up to $544 million, EPS at $1.96 (beats consensus of $1.71)
- Sales down 2% to $5.029 billion (below $5.098 billion estimate)
- Organic sales up 1% in North America, 12% in developing markets
- Developed market organic sales down 3%, hit by pricing and energy surcharges
- Full-year adjusted EPS growth now expected at mid-to-high teens
- Organic sales growth forecast at mid-single digits, reported sales impacted by currency and divestitures
Kimberly-Clark Corp.’s stock fell 1.5% early Tuesday after the consumer goods company posted weaker-than-expected sales for its second quarter, despite beating earnings estimates. CEO Mike Hsu said in prepared remarks that the company has made strong progress navigating dynamic consumer and retail environments. The maker of Huggies, Kleenex, and Scott toilet paper reported a net income of $544 million ($1.61 EPS) compared to $102 million ($0.30 EPS) in the year-ago period, with adjusted EPS at $1.96 (beating the $1.71 FactSet consensus. Sales fell 2% to $5.029 billion, below the $5.098 billion FactSet estimate. Sales were weighed down by currency moves and the divestiture of the Tissue and K-C professional business in Brazil last June. In North America, organic sales rose 1%, driven by 5% growth in personal care, partially offset by a 4% decline in K-C Professional and 2% in consumer tissue. In developing and emerging markets, organic sales rose 12%, due to higher prices and volume gains. Developed market organic sales were down 3%, hurt by lower pricing and the impact of temporary energy surcharge-related price increases in Western Europe in the year-ago period. The company now expects full-year adjusted EPS growth at a mid-to-high teens percentage rate, up from previous expectations of low-teens growth. Organic sales are still expected to grow at a mid-single digit rate, while reported sales are impacted by 400 basis points of currency translation and 120 basis points from divestitures. The stock has gained 18.6% year-to-date, outpacing the S&P 500’s 16.7% rise.
Factuality Level: 9
Factuality Justification: The article provides accurate and objective information about Kimberly-Clark Corp.’s financial performance, including specific numbers and comparisons to previous periods and market benchmarks. It also includes quotes from the CEO and guidance for future expectations.
Noise Level: 3
Noise Justification: The article provides relevant information about Kimberly-Clark’s financial performance and outlook, with a focus on sales, net income, and earnings per share. It also mentions the impact of currency fluctuations and divestitures. However, it lacks in-depth analysis or exploration of long-term trends or consequences of decisions. The article does not delve into antifragility or accountability, but it is factual and stays on topic without diving into unrelated territories. It supports its claims with evidence (numbers) and provides some actionable insights for investors.
Public Companies: Kimberly-Clark Corp. (KMB)
Key People: Mike Hsu (Chief Executive)
Financial Relevance: Yes
Financial Markets Impacted: Kimberly-Clark Corp.’s stock
Financial Rating Justification: The article discusses the financial performance of Kimberly-Clark Corp., including its sales, net income, and earnings per share, as well as its impact on the company’s stock price and expectations for future growth. This is relevant to financial topics and directly impacts the company’s stock in financial markets.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.
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