KMB Kimberly Clark Corp

By Kimberly Chin 

Kimberly-Clark Corp. said it was switching chief executives in the midst of a restructuring program intended to boost profits as the maker of Kleenex tissues, Scott toilet paper and Huggies diapers struggles with weak sales.

Current President and Chief Operating Officer Michael Hsu is set to become chief executive officer effective Jan. 1, succeeding CEO Thomas Falk, who has served in this position since 2002. Mr. Falk, who has been chairman since 2003, will become executive chairman, the company announced.

Before his promotion to COO last year, Mr. Hsu was group president of the company's personal care and consumer tissue business in North America. He remains a member of the company's board.

Earlier this year, the company launched a restructuring program aimed at reducing between $500 million and $550 million in costs by the end of the year by slashing its workforce and slimming its manufacturing supply chain. It also said it would exit or divest from some of its low-margin businesses.

The company also reported Monday that third-quarter sales fell 2% to $4.58 billion from the same period a year ago, compared with the $4.53 billion forecast of analysts polled by Refinitiv. Excluding foreign exchange rates, organic sales rose 1%, due to adjustments in prices and product mix. In North America, organic sales rose 3%.

Kimberly-Clark reported its profit fell 20% to $451 million, or $1.29 a share, from a year earlier. Excluding special items, it reported earnings of $1.71 a share, topping analysts' expectations of $1.63 a share, according to a Refinitiv poll.

The Dallas-based company said it would further cut its earnings guidance for the full year. It expects to earn between $3.29 and $3.79 a share, compared with the $3.37 to $3.87 a share it previously forecast. It maintained its organic sales growth target of about 1%.

The company said its profit was hurt by $120 million in higher input costs in the latest quarter.

Kimberly-Clark has raised prices on its products in a competitive pricing environment, with rising costs for pulp, oil and other raw materials. In August, Kimberly-Clark said it would increase its list prices and change package counts in the U.S. and Canada for several brands, including Cottonelle bathroom tissue and Huggies diapers, to offset commodity cost inflation.

Several consumer-products makers, including rival Procter & Gamble Co., have also raised prices on diapers, paper towels and other products in North America.

Write to Kimberly Chin at kimberly.chin@wsj.com

(END) Dow Jones Newswires

October 22, 2018 09:35 ET (13:35 GMT)

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