Kimberly-Clark Corporation hit the top end of its internal guidance in 2023, with net sales of $20.4 billion resulting in 5% year-on-year organic growth on a 34.4% gross margin for the maker of Kleenex and Huggies products.
However, a substantial foreign exchange impact and the exit of its tissue and K-C Professional business in Brazil resulted in 1% actual growth, though this was also within internal guidance.
Full-year operating profit was $2.34 billion in 2023 versus $2.68 billion in 2022, with the decline attributed to impairment charges on intangible assets. On an adjusted basis, operating profit increased 13%, with adjusted earnings per share up 17%.
Specifially looking at the fourth quarter, revenues of $5 billion and a $670 million operating profit slightly undershot Street expectations, though management struck a positive tone.
“We had a solid finish to 2023, delivering strong organic growth as well as cost and earnings recovery above our initial expectations,” said Kimberly-Clark chairman and chief executive Mike Hsu. “Our fourth-quarter results demonstrate topline momentum with more balanced growth across volume, mix and price led by strong personal care results.”
He added: “We enter 2024 having advanced the company’s strategic foundation and financial position, and with confidence this phase of cost recovery and supply chain stabilization is largely behind us.”
Looking ahead to 2024, Kimberly-Clark forecasts adjusted operating profit to grow at a high single-digit to low double-digit rate on a constant-currency basis, with adjusted EPS expected to grow at a high single-digit rate on a constant-currency basis.
In conjunction with today’s results, Kimberly Clark (NYSE:KMB)’s board announced a quarterly dividend of $1.22 per share, a 3.2% quarterly increase.
Despite the dividend bump, Kimberly-Clark shares traded 5% lower when markets opened on Wednesday, likely as a reflection of the fourth-quarter miss.