2023-04-25 08:23:27 ET
Kimberly-Clark Corporation ( NYSE: KMB ) stock gained in early action on Tuesday after a comfortable Q1 earnings topper. Organic sales rose 5% during the quarter, driven by a 10% increase in price and favorable product mix from ongoing revenue growth management programs offset by a 5% decrease in volume. Changes in foreign currency exchange rates decreased sales by approximately 4%.
In North America, sales increased 5%, including increases of 2% in Personal Care, 5% in Consumer Tissue and 12% in K-C Professional. Outside North America, organic sales were up 4% in developing and emerging markets and 10% in developed markets (Australia, South Korea and Western/Central Europe).
Notably, the consumer tissue segment recorded a 40% gain in operating profit to $240M, with organic growth and cost savings partially offset by input cost inflation, other manufacturing costs and higher marketing, research and general expenses.
Overall gross margin increased 340 basis points from a year ago to 33.2% of sales, driven by favorable net revenue realization offsetting inflation. Operating profit was $787M vs. $693M a year ago to result in an operating margin of 15.1%. EPS was up 24% to $1.67 on an adjusted basis.
CEO update: "Revenue growth management initiatives drove continued sales momentum with a better-than-expected elasticity impact on volume. Looking ahead, we have an exciting innovation pipeline that will deliver superior performance in health, wellness and sustainability. With our strong portfolio of trusted brands, we have our sights set on growing our categories and winning with consumers to enable long-term, profitable growth."
Looking ahead, Kimberly-Clark ( KMB ) sees 2023 organic sales growth of 2% to 4% and total sales growth of 0% to 2% unchanged. Adjusted EPS growth of 6% to 10% is anticipated.
Shares of Kimberly-Clark ( KMB ) rose 0.75% premarket.
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Kimberly-Clark rallies after earnings show benefits of strong pricing