Kimberly-Clark (NYSE:KMB) reported fourth-quarter results on Jan. 25. The maker of Kleenex tissues and Huggies diapers saw its revenue and profits hurt by negative foreign exchange rate fluctuations but was still able to deliver higher adjusted EPS thanks to its cost-cutting initiatives.

Kimberly-Clark results: The raw numbers 


Q4 2015

Q4 2014

Growth (YOY)


$4.539 billion

$4.828 billion


Net income

$333 million

($83) million


Earnings per share




Data source: Kimberly-Clark Q4 2015 earnings press release.

What happened with Kimberly-Clark this quarter?

  • Organic sales rose 5% year over year -- including a 9% increase in developing markets -- as volumes increased 4% and net selling prices improved 1%. However, foreign exchange fluctuations reduced sales by 11%, which led to an overall year-over-year sales decline of 6%.
  • Excluding restructuring costs and other nonrecurring items, adjusted operating profit rose 1% to $779 million, as cost savings related to Kimberly-Clark's FORCE program (that stands for "Focused on Reducing Costs Everywhere") and lower raw-material costs boosted results.
  • Adjusted earnings per share, which benefited from a lower share count thanks to the $800 million in share repurchases Kimberly-Clark conducted during 2015, rose 5%.

What management had to say
"For the full year of 2015, we achieved 5% organic sales growth, highlighted by 10% growth in developing and emerging markets and a 5% volume increase in our North American consumer products business," said Chairman and CEO Thomas Falk. He continued:

We also improved adjusted operating profit margin by 120 basis points, including benefits from $365 million of FORCE cost savings. In addition, we grew adjusted earnings per share from continuing operations 5%, toward the high end of our original guidance for the year despite significantly more currency headwinds. Finally, we improved return on invested capital considerably and returned $2.1 billion to shareholders through dividends and share repurchases.

Looking forward
Management expects full-year 2016 net sales to be in the range of down 3% to even with 2015 sales, with a 5% to 6% negative impact from foreign exchange more than offsetting organic sales growth of 3% to 5%.

It is also projecting adjusted operating profit growth of 2% to 5% and adjusted earnings per share of $5.95 to $6.15.

"Despite another year of significantly unfavorable currencies, we also expect to further improve our margins and deliver 3% to 7% growth in adjusted earnings per share," Falk said. "We are very optimistic about our future and our ability to generate attractive returns to shareholders through successful execution of our global business plan."

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