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Kimberly-Clark Corp Earnings: Sales Fall as Forex Weighs

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

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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


Q1 2016

Q1 2015

Growth (YOY)


$4.476 billion

$4.691 billion


Net income

$545 million

$468 million


Earnings per share




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."

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