01—Abstract
Summary
Summary of the 8-K filed January 24, 2024. Cited figures are marked; the original filing is the authoritative source.
Kimberly-Clark Corporation (NYSE: KMB) reported fourth-quarter and full-year 2023 results on January 24, 2024, per Exhibit 99.1, a press release that is furnished under Item 2.02 rather than filed.
For full-year 2023, net sales were $20.4 billiona ($20,431 million), up 1 percent, with organic sales up 5 percent driven by price. Reported operating profit fell 13 percent to $2,344 million, reflecting a $658 million impairment of intangible assets, while adjusted operating profit rose to $2,958 million from $2,617 million. Diluted EPS was $5.21 versus $5.72, and adjusted diluted EPS was $6.57 versus $5.63.
Cash provided by operations was $3.5 billionb, and the company returned $1.8 billion to shareholders through dividends and share repurchases. Fourth-quarter net sales were $4.97 billion, flat versus the prior year, with organic sales up 3 percent. Gross margin improved 210 basis points to 34.9 percent, and reported diluted EPS was $1.50, flat year over year, while adjusted EPS was $1.51, down 2 percent.
Personal Care and K-C Professional were the main contributors to full-year results, with Consumer Tissue also showing operating profit growth. For 2024, the company expects low-to-mid single digit organic net sales growth, with reported net sales affected by roughly 300 basis points of negative currency translation and 60 basis points from the Brazil Tissue divestiture.
Adjusted operating profit and adjusted EPS are expected to grow at high single-digit to low double-digit and high single-digit rates, respectively, on a constant-currency basis. The company plans an Investor Day in New York City in late March to present its strategic priorities and a long-term financial algorithm.
02—Key points
Key Highlights
- Full-year 2023 net sales of $20.4 billion, up 1 percent, with organic sales up 5 percent driven by approximately 6 percent price increases and 1 percent favorable mix, offset by a 2 percent volume decrease.
- Reported full-year operating profit declined 13 percent to $2,344 million, including a $658 million impairment of intangible assets (Softex Indonesia and Thinx); adjusted operating profit rose to $2,958 million from $2,617 million.
- Diluted EPS was $5.21 for 2023 versus $5.72 in 2022; adjusted diluted EPS was $6.57 versus $5.63, with the company's 2023 results exceeding its initial outlook.
- Fourth-quarter net sales of $4,970 million were flat, with organic sales up 3 percent and gross margin up 210 basis points to 34.9 percent.
- Personal Care full-year operating profit increased 6 percent to $1,890 million; Consumer Tissue operating profit rose 21 percent to $976 million; K-C Professional operating profit rose 46 percent to $665 million.
- Cash provided by operations was $3,542 million in 2023 versus $2,733 million in 2022; total debt was $8.0 billion at December 31, 2023 versus $8.4 billion a year earlier.
- 2024 outlook calls for low-to-mid single digit organic net sales growth and high single-digit to low double-digit adjusted operating profit growth on a constant-currency basis, with about 400 basis points of currency drag on reported operating profit and EPS growth.
03—Questions
Frequently Asked Questions
How did Kimberly-Clark perform in the fourth quarter of 2023?
Fourth-quarter net sales were $4.97 billion, in line with the prior year, with organic sales up 3 percent driven by a 2 percent price increase and a 1 percent favorable mix. Reported operating profit was $670 million, down 6 percent, with currency impacts of $170 million. Reported diluted EPS was $1.50, flat year over year, and adjusted EPS was $1.51, down 2 percent.
Why did reported operating profit decline in 2023 when adjusted operating profit increased?
Reported full-year operating profit was $2,344 million versus $2,681 million, reflecting a $658 million non-cash impairment of intangible assets related to Softex Indonesia and Thinx. Adjusted operating profit excludes this charge and the net benefit from the Brazil divestiture, and rose to $2,958 million from $2,617 million on organic sales growth and cost savings.
What is the company's 2024 outlook?
The company expects low-to-mid single digit organic net sales growth in 2024. Reported net sales growth is expected to reflect roughly 300 basis points of negative currency translation and 60 basis points from the Brazil Tissue divestiture. Adjusted operating profit and adjusted EPS are expected to grow at high single-digit to low double-digit and high single-digit rates, respectively, on a constant-currency basis.
What is the Investor Day and what will it cover?
Kimberly-Clark plans to host an Investor Day in New York City in late March. Presentations by Chairman and CEO Mike Hsu and CFO Nelson Urdaneta will detail strategic priorities and key initiatives and provide a long-term financial algorithm. The event will be webcast.
How much did the company return to shareholders and how is its balance sheet positioned?
The company returned $1.8 billion to shareholders through dividends and share repurchases in 2023, including repurchases of 1.8 million shares at a cost of $225 million. Total debt was $8.0 billion at December 31, 2023, down from $8.4 billion at the end of 2022, and cash and cash equivalents rose to $1,093 million from $427 million.
04—Continue