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K-C reports “excellent” third quarter results and strong profit margin improvements

Kimberly-Clark Corporation (K-C) has reported a third quarter year-on-year net sales increase of 1% to $4.6bn.

Organic sales increased 4% and the company is now targeting full-year 2019 organic sales growth of 3 – 4%.

The prior outlook was for organic sales growth of 3% and adjusted earnings per share of $6.65 to $6.80.

Chief executive Mike Hsu said: “We delivered excellent third quarter results and we are raising our full-year outlook.

“We achieved strong improvements in organic sales, profit margins and earnings per share in the quarter.

“In addition, we continued to launch innovations, pursue our growth priorities and increase investments in our brands.”

The company generated $95m of cost savings and returned approximately $570m to shareholders through dividends and share repurchases.

“I’m encouraged by the progress we’re making this year while we invest more for longer-term success,” Hsu added.

“We continue to be optimistic about our opportunities to deliver balanced and sustainable growth through execution of K-C Strategy 2022.”

Changes in foreign currency exchange rates reduced sales by 2% and business exits in conjunction with the 2018 Global Restructuring Programme reduced sales slightly.

In North America, organic sales increased 4% in consumer products and 5%in K-C Professional.

Outside North America, organic sales rose 5% in developing and emerging markets and 1% in developed markets.

Third quarter operating profit was $915m in 2019 and $669m in 2018.

Results in both periods include charges related to the 2018 Global Restructuring Programme.

In the Consumer Tissue segment, third quarter sales of $1.5bn increased 1%.

Net selling prices increased 5%., while volumes declined 2% and changes in currency rates reduced sales 2%.

Third quarter operating profit of $26 m increased 25%.

Results benefited from higher net selling prices, cost savings and lower input costs.

The comparison was impacted by other manufacturing cost increases, lower volumes and increased selling, general and administrative costs.

Sales in North America increased 3% compared to a 5% decline in the year-ago period. Net selling prices rose 8%, while volumes fell 4 percent and product mix was off 1%.

Sales in developing and emerging markets increased 1%.In the K-C Professional (KCP) segment, third quarter sales of $0.8bn decreased 1%.