Investors were treated to some attractive operating metrics in Kimberly-Clark's (KMB 0.04%) latest earnings report. Sure, sales slowed from the previous quarter's spike that was induced by panic buying. But the consumer staples giant still managed to gain market share in the key U.S. geography while generating record cash flow.

In a conference call with Wall Street analysts, CEO Michael Hsu and his team broke down that performance for shareholders while explaining their rationale for forecasting more growth in the second half of fiscal 2020.

Let's look at a few highlights.

Winning with diapers

"In North American consumer products, market shares are up or even in five of eight product categories," Hsu said.

Kimberly-Clark saw weak demand in its professional segment, which caters to businesses, and sales also dipped in a few smaller markets in Latin America and Eastern Europe. But the company outperformed in its biggest consumer categories and in the core U.S. business.

A father doing dishes with his children.

Image source: Getty Images.

The 12% organic sales spike in North America was powered by strong demand for tissue products as well as premium child-care offerings in the Huggies diaper franchise. That success implies that Kimberly-Clark gained some ground against its chief rival Procter & Gamble (PG 0.07%), which owns the market-leading Pampers brand. "Overall, we're growing or maintaining market share in approximately 60% of our 80 category/combinations that we track," Hsu said.

Putting cash to work

"While cash flow is expected to decline in the back half of the year, we expect full-year cash flow will be up very nicely year on year," CFO Maria Henry said.

Kimberly Clark's record cash-flow rate this quarter isn't expected to continue into late 2020 because it was inflated in Q2 by some temporary factors like delayed tax payments. But executives still expect to improve upon the $2.7 billion of operating cash they generated in 2019. Enduring gains are coming from its cost-cutting program that's now on pace to save as much as $560 million this year alone.

Management is putting the extra resources to work by boosting investments in marketing and product development. The company has also resumed its stock repurchase program after pausing it during the early days of the COVID-19 pandemic. "Financially, this should be a really good year for Kimberly-Clark," Henry said.

Seeing more clearly

"Our visibility is improving, and we're restoring forward-looking guidance for 2020," Hsu said.

Kimberly-Clark is expecting pressure from destocking over the next six months as consumers work through the excess cleaning and personal-care supplies they've accumulated. The professional segment is on pace to keep declining, too, and there are some economic risks in several markets that are enduring recessionary selling conditions today.

But the overall outlook is positive, mainly thanks to the company's improving market share in key consumer niches like diapers and tissue paper. That's why it's confident enough to restore its 2020 outlook, this time calling for growth between 4% and 5% compared with the prior 2% target.

Investors will get more context for the strength of that forecast when Procter & Gamble announces its updated outlook on July 30. For now, though, it looks like Kimberly-Clark is on track for improving market share, with robust trends in cash flow giving executives plenty of resources to direct toward extending its newfound positive momentum.