01—Abstract
Summary
Summary of the 10-Q filed April 23, 2024. Cited figures are marked; the original filing is the authoritative source.
Kimberly-Clark Corporation's first-quarter 2024 Form 10-Q reports net sales of $5.1 billiona ($5,149 million), down 1 percent from $5,195 million a year earlier, while organic sales grew 6 percent.
Operating profit rose to $853 millionb from $787 million, and net income attributable to Kimberly-Clark was $647 million, compared with $566 million. Diluted earnings per share were $1.91, versus $1.67 in the prior-year period. Excluding $45 million pre-tax ($34 million after tax) of 2024 Transformation Initiative charges, adjusted operating profit was $898 million and adjusted earnings per share were $2.01, an increase of 20 percent.
Results benefited from higher net revenue realization and gross productivity savings of $120 millionc, partially offset by higher marketing, research and general expenses, unfavorable currency effects and supply chain investments. Cash provided by operations fell to $438 million from $613 million, driven by unfavorable changes in operating working capital. Capital spending was $194 million, and management anticipates full-year capital spending of approximately $900 million.
Total debt was $8.0 billiond at both March 31, 2024 and December 31, 2023. The company repurchased 459 thousand shares for $56 million during the quarter.
The filing describes the 2024 Transformation Initiative, announced March 27, 2024, which reorganizes the company into three new business segments, targets workforce reductions of 4 to 5 percent, and has total expected pre-tax costs of approximately $1.5 billion through 2026. The company also agreed on April 7, 2024 to sell its personal protective equipment business within K-C Professional for $640 million, with closing expected in the third quarter of 2024.
02—Key points
Key Highlights
- Net sales were $5,149 million, down 1 percent from $5,195 million, while organic sales grew 6 percent; foreign currency decreased sales by 5 percent.
- Operating profit rose to $853 million from $787 million; adjusted operating profit excluding transformation charges was $898 million.
- Diluted EPS was $1.91 versus $1.67; adjusted EPS was $2.01, an increase of 20 percent.
- Cash provided by operations declined to $438 million from $613 million, driven by unfavorable operating working capital changes.
- The 2024 Transformation Initiative recorded $45 million pre-tax charges in Q1 2024, with total costs expected to be about $1.5 billion pre-tax through 2026 and targeted gross productivity savings of $3 billion.
- On April 7, 2024, the company agreed to sell its personal protective equipment business for $640 million, expected to close in Q3 2024.
- Total debt was $8.0 billion at March 31, 2024, and the company repurchased 459 thousand shares for $56 million in the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, Kimberly-Clark kept $0.15.
- Revenue$4.33B100.0%
- Cost of revenue−$2.64B61.0%
- Gross profit$1.69B39.0%
- Operating costs−$833.0M19.3%
- Operating income$853.0M19.7%
- Interest, other & tax−$206.0M4.8%
- Net income$647.0M15.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 23, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $4.33B$5.20B | −16.7% |
| Cost of Revenue | $3.24B$3.47B | −6.7% |
| Gross Profit | $1.69B$1.73B | −2.3% |
| Operating Income | $853.00M$787.00M | +8.4% |
| Interest Expense | $67.00M$73.00M | −8.2% |
| Net Income | $647.00M$566.00M | +14.3% |
| EPS (Basic) | $1.92$1.68 | +14.3% |
| EPS (Diluted) | $1.91$1.67 | +14.4% |
| Shares Outstanding (Basic) | 336.90M337.50M | −0.2% |
| Shares Outstanding (Diluted) | 338.30M338.60M | −0.1% |
05—Questions
Frequently Asked Questions
What drove the change in Kimberly-Clark's first-quarter 2024 operating profit?
Operating profit increased to $853 million from $787 million. Results benefited from higher net revenue realization and gross productivity savings of $120 million, partially offset by higher marketing, research and general expenses, unfavorable currency effects and supply chain investments. Excluding $45 million of 2024 Transformation Initiative charges, adjusted operating profit was $898 million.
Why did operating cash flow decline in the quarter?
Cash provided by operations was $438 million compared with $613 million in the prior year. The filing attributes the decrease to unfavorable changes in operating working capital, partially offset by the increase in operating profit.
What is the 2024 Transformation Initiative?
Announced March 27, 2024, it is intended to improve focus on growth and reduce the structural cost base by reorganizing into three new business segments, making corporate and regional overhead more efficient and optimizing the global supply chain. Workforce reductions are expected to be 4 to 5 percent, total pre-tax costs are approximately $1.5 billion, and the transformation is expected to be completed by the end of 2026.
What divestiture did Kimberly-Clark announce after the quarter ended?
On April 7, 2024, the company agreed to sell the personal protective equipment business within its K-C Professional segment for $640 million, subject to a customary purchase price adjustment. The transaction includes Kimtech and KleenGuard branded products and is expected to close in the third quarter of 2024, pending customary conditions and regulatory approval.
How did the company's segments perform in the first quarter?
Personal Care net sales were $2,713 million, flat versus the prior year, with operating profit up 12 percent to $545 million. Consumer Tissue net sales fell 2 percent to $1,599 million, while operating profit rose 21 percent to $290 million. K-C Professional net sales decreased 3 percent to $823 million, and operating profit increased 18 percent to $188 million.
06—Continue