Please ensure Javascript is enabled for purposes of website accessibility

Kimberly-Clark Corp Earnings: Sales Fall as Forex Weighs

By Joe Tenebruso - Apr 25, 2016 at 9:33AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A strong U.S. dollar took a toll on the consumer-goods titan's Q1 results.

Kimberly-Clark (KMB -0.55%) reported first-quarter results on April 22. The maker of Huggies diapers and Kleenex tissues saw its revenue dented by negative foreign exchange movements, but management remains confident that the consumer-products giant can hit its full-year profit forecast.

Kimberly-Clark results: The raw numbers

 Metric

Q1 2016

Q1 2015

Growth (YOY)

Sales

$4.476 billion

$4.691 billion

(4.6%)

Net income

$545 million

$468 million

16.5%

Earnings per share

$1.50

$1.27

18.1%

Source: Kimberly-Clark Q1 2016 earnings press release.

What happened with Kimberly-Clark this quarter?

  • Sales fell 5% to $4.5 billion, as a 7% negative impact from foreign exchange fluctuations more than offset organic sales growth of 2%. The sales weakness was across the board, with Kimberly-Clark's personal care, consumer tissue, and K-C Professional business segments reporting revenue declines of 4%, 5%, and 4%, respectively. 
  • Adjusted operating profit -- which excludes restructuring costs, pension settlement charges, and other nonrecurring items -- rose less than 1% to $818 million, as cost savings related to Kimberly-Clark's FORCE (Focused On Reducing Costs Everywhere) program and lower raw material costs boosted results.
  • Adjusted net income, which benefited from a lower effective tax rate, increased 5.9% to $555 million. And adjusted earnings per share, aided by share buybacks, rose 7.7% to $1.53.

What management had to say
"In the first quarter, organic sales grew more than 2 percent and our adjusted operating profit margin improved by 90 basis points," said Chairman and CEO Thomas Falk in a press release. "We achieved $110 million of total cost savings from our FORCE program and 2014 Organization Restructuring and continued to allocate capital in shareholder-friendly ways."

Looking forward
Kimberly-Clark reiterated its revenue forecast for 2016, including organic sales growth of 3% to 5%, which is likely to be offset by a 5% to 6% negative impact from foreign exchange. In addition, management still expects the company's full-year adjusted earnings per share to be in the range of $5.95 to $6.15. 

"We continue to execute our Global Business Plan strategies for long-term success and we are confirming our previous top- and bottom-line outlook for 2016," added Falk. "In summary, we expect to deliver on our commitments again this year."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Kimberly-Clark Corporation Stock Quote
Kimberly-Clark Corporation
KMB
$128.34 (-0.55%) $0.71

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.