Kimberly-Clark Reports 2Q Results, Offers Guidance -- Commodity Comment
July 23 2021 - 02:14PM
Dow Jones News
Kimberly-Clark Corp. reported second-quarter 2021 results Friday
and offered guidance.
Supply-chain disruption:
"We have also experienced incidents of supply-chain disruption
and increased currency and commodity volatility," the company
said.
Targets:
The company is now targeting full-year 2021 organic sales
decline of 0% to 2% and adjusted earnings per share of $6.65 to
$6.90. The prior outlook was for organic sales growth of 0% to 1%
and adjusted earnings per share of $7.30 to $7.55.
"The updated earnings outlook reflects significantly higher
input cost inflation and lower sales volumes, partially offset by
additional cost savings and reduced discretionary spending," the
company said.
CEO says 2Q reflects pandemic-driving volatility:
"Our second-quarter reflects continued pandemic-driven
volatility. We are facing significantly higher input costs and a
reversal in consumer tissue volumes from record growth in the
year-ago period as consumers and retailers in North America
continued to reduce home and retail inventory," said Chairman and
Chief Executive Mike Hsu.
"While we look forward to a return to a more normalized
environment, we have moved decisively to take pricing actions to
mitigate inflationary headwinds and continue to prudently manage
costs."
K-C Strategy 2022 continues:
"We will continue to execute K-C Strategy 2022," Mr. Hsu said.
"While our updated outlook reflects a more challenging near-term
environment, we are taking appropriate actions and remain confident
in our strategies to create long-term shareholder value."
2018 Global Restructuring Program continues:
In January 2018, Kimberly-Clark initiated the 2018 Global
Restructuring Program "to reduce the company's structural cost base
and enhance the company's flexibility to invest in its brands,
growth initiatives and capabilities critical to delivering future
growth."
As part of the program, Kimberly-Clark expects to exit or divest
some low-margin businesses that generate about 1% of company net
sales.
Restructuring expected completed in 2021:
The restructuring is expected to be completed in 2021. The
company said it expects the program will generate annual pre-tax
cost savings of $540 million to $560 million by the end of
2021.
2021 outlook and planning assumptions:
The company updated planning and guidance assumptions for
full-year 2021:
Net sales increase 1% to 4%, prior assumption 3% to 5%. Foreign
currency exchange rates favorable between 1% and 2%, no change.
Softex Indonesia acquisition expected to increase sales 2% in
2021 while exited businesses in conjunction with the 2018 Global
Restructuring Program anticipated to reduce sales slightly, no
change.
Adjusted operating profit expected to decline 11% to 14%
year-on-year, prior assumption decline of 3% to 6%, according to
the company.
Cost savings of $520 million to $560 million, including $400
million to $420 million from the FORCE program and $120 million to
$140 million from the 2018 Global Restructuring Program, prior
estimate was for total savings of $460 million to $520 million.
Net income from equity companies similar, to down somewhat,
year-on-year, prior outlook similar to up somewhat.
Share repurchase:
Share repurchase in 2021 of $400 million to $450 million, prior
outlook $650 million to $750 million, the company said.
Write to Matt Walker at matthew.walker@wsj.com
(END) Dow Jones Newswires
July 23, 2021 14:04 ET (18:04 GMT)
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