Personal care, consumer tissue and sanitizing cleaning products company Kimberly-Clark Corp. (KMB:NYSE), today announced financial results for the first quarter of 2022 ended March 31, 2022.
The company reported that during Q1/22 net sales increased by 7% to $5.1 billion, compared to $4.7 billion in Q1/21. The firm mentioned that during the period organic sales grew 10% year-over-year due to a combination of higher prices, volume growth and a more favorable product mix.
The company stated that adjusted operating profit in Q1/22 decreased to $629 million, versus $804 million in Q1/21. The firm noted that results were impacted mainly by higher input costs of $470 million due to significant increases in costs of pulp and polymer-based materials, distribution and energy.
Kimberly-Clark advised that for Q1/22 it posted net income of $523 million, or $1.55 per diluted share, versus $584 million, or $1.72 per diluted share in Q1/21.
The company reported that adjusted earnings in Q1/22 decreased by 25% to $1.35 per share, compared to $1.80 per share in Q1/21 in part due to its acquisition of a majority and controlling share in Thinx Inc.
Kimberly-Clark's Chairman and CEO Mike Hsu commented, "I'm pleased with our team's continued excellent execution during this volatile and highly inflationary environment. We delivered double-digit organic sales growth with strong increases across all our segments in the first quarter…Our growth strategy is working and we are continuing to invest in our business. Additionally, we continue to take the necessary actions to mitigate macro headwinds and remain committed to improving our margins over time."
The company provided a breakdown of activity by business segment during the most recent quarter and stated that sales in its Personal Care segment increased by 11% to $2.7 billion, mostly due to an 8% increase in net selling prices. The company saw sales growth of 16% in North America, while Developed and Emerging (D&E) markets sales increased 8%.
The firm advised that net sales in its Consumer Tissue business segment increased by 4% to $1.6 billion and added that sales in North America rose by 9% and D&E markets increased 3%.
The company's smallest business segment, K-C Professional (KCP), posted $0.8 billion in sales, which is 4% higher than sales reported in Q1/21.
The company advised that during Q1/22 it completed its acquisition of a majority and controlling interest in Thinx Inc., which it said is "an industry leader in the reusable period and incontinence underwear category." The company stated that in aggregate it has invested $181 million in Thinx since 2019 when it made its first initial minority investment in the company.
The company offered some forward guidance and stated that for FY/22 it expects net sales will increase by 2-4% over FY/21. The firm said these estimates were adjusted upward from its prior estimates of 1-3%.
The company noted that it now expects organic sales in FY/22 will increase 4-6% versus its previous estimates of 3-4% due to higher expected net selling prices which is expected to positively impact operating profit.
Kimberly-Clark advised that in line with prior unadjusted earnings per share (EPS) guidance, it expects adjusted EPS of $5.60-6.00 for FY/22.
Kimberly-Clark Corp. is a large, diversified consumer products company based in Dallas, Tex. that employs more than 46,000 people worldwide and manufactures and sells a broad range of products in over 175 countries. The company is a well-known maker of household products including disposable diapers, training youth and swim pants, baby wipes, feminine and incontinence care products marketed under numerous everyday brands including Huggies, Pull-Ups, GoodNites, Kotex, Depend, Poise and many others. The firm's facial and bathroom tissue, paper towels and napkins products are sold under the Kleenex, Scott, Cottonelle, Viva and other brand names. The company's KCP line sells products such as wipes, tissue, towels, apparel, soaps, and sanitizers under its Kleenex, Scott, KleenGuard and other brand names.
Kimberly-Clark started Friday with a market cap of around $42.6 billion with approximately 336.9 million shares outstanding and a short interest of about 2.6%. KMB shares opened more than 8% higher at $138.72 (+$10.62, +8.29%) over Thursday's $128.10 closing price. The stock traded Friday between $137.20 and $141.20 per share and closed at $138.51 (+$10.49, +8.19%).
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