Earnings Results: • Strong Q1 results with better-than-expected volume growth • Productivity savings of $120 million in Q1, on track for $3 billion target over 5 years • Improved market share in North America (up or even in 6 of 8 categories) and China (Huggies diapers up a couple hundred basis points) • China volumes up double digits despite category being down 10%
Future Guidance: • Maintaining full-year guidance despite strong Q1, due to uncertainties in geopolitical situation and input cost environment • Expect to further step up investments, with advertising spend increasing 50 basis points for the remainder of the year • Commodities expected to be inflationary for the full year, around $250 million • Plans to exit some private label businesses by end of 2025, reducing exposure from 4% to 2% of global sales • New operating model to go live on October 1, 2024, with $200 million in SG&A savings expected in 2025 and 2026
Kimberly-Clark reported strong Q1 2024 results, with better-than-expected volume growth despite retail inventory reductions. The company saw improved market share in North America and double-digit volume growth in China. Productivity savings of $120 million in Q1 put Kimberly-Clark on track to achieve its $3 billion target over the next 5 years.
Despite the strong start to the year, management is maintaining its full-year guidance due to uncertainties in the geopolitical situation and input cost environment. The company expects commodity inflation of around $250 million for the full year. Kimberly-Clark plans to further increase investments, with advertising spend set to rise 50 basis points for the remainder of the year.
The company also announced plans to exit some private label businesses by the end of 2025, reducing its exposure from 4% to 2% of global sales. This move will allow Kimberly-Clark to focus its technology investments on strategic priorities. Additionally, the company’s new operating model is set to go live on October 1, 2024, with $200 million in SG&A savings expected in 2025 and 2026.
Overall, management expressed confidence in the company’s performance and strategy, with CEO Mike Hsu stating, “We are making the company better, stronger and faster. I’m very, very proud of our progress to date, and I’m confident that we’re going to continue to leverage our core strengths to achieve our potential.”
Notable Quotes: • “We are on an exciting path and are well positioned to deliver durable growth and sustainable shareholder returns.” - Mike Hsu, CEO • “The underlying strength in the quarter was predicated on a couple of good fundamental factors: one, better volume, which you observed, and there’s no pull forward.” - Mike Hsu, CEO • “Overall, first, it’s based on the integrated margin management process that we unveiled in our Investor Day at the end of March. This has really given us a new enterprise-wide visibility, discipline, accountability, end-to-end across the whole value chain.” - Nelson Urdaneta, CFO