Kimberly-Clark (K-C) has reported better-than-anticipated organic sales growth and stronger cost, margin, and earnings recovery in its fourth quarter and full-year 2023 results.
Net sales increased 1% year-on-year to $20.4bn in 2023 and the company said its financial outlook for 2024 reflects the continued momentum.
Chairman and Chief Executive Mike Hsu said: “We had a solid finish to 2023, delivering strong organic growth as well as cost and earnings recovery above our initial expectations.
“Our fourth quarter results demonstrate topline momentum with more balanced growth across volume, mix and price led by strong Personal Care results.
“I’m proud of our team’s outstanding execution, including enhancing the value proposition of our global brands through consumer-centric innovation and stronger, more integrated commercial capabilities.”
In Q4, the company reported net sales of $5.0bn, in line with the prior year, and an organic sales growth of 3%, driven by a 2% increase in price from ongoing revenue growth management programs and a 1% favourable product mix.
Gross margin was 34.9%, which it said was driven by favourable net revenue realisation and productivity.
Changes in foreign currency exchange rates reduced sales by approximately 2% and the divestiture of the tissue and K-C Professional business in Brazil reduced sales by approximately 1%.
In North America, organic sales increased 3% over last year, including increases of 5% in Personal Care and 3% in Consumer Tissue that were partially offset by a 3% decrease in K-C Professional.
Outside North America, organic sales were up 5% in developing and emerging markets.
Fourth quarter operating profit was $670m compared to $712m a year earlier, resulting in an operating margin of 13.5%.
Operating profit decreased by 6%, driven by currency impacts of $170m.
Full-year operating profit was $2.34bn in 2023 compared with $2.68bn in 2022.
In the Consumer Tissue segment, the company reported sales of $1.5bn, a decrease of 1% in the quarter, while organic sales were in line with last year reflecting price gains of 1% offset by volume decrease of 1%.
Sequential improvement in volume trends were led by North America with an increase of 2% in the quarter.
For the full-year, Consumer Tissue sales were up 1% with an organic increase of 3%.
Fourth-quarter operating profit of $269m increased 13% driven by improved revenue realization, lower input costs, and cost savings that were partially offset by higher other manufacturing costs and an unfavourable impact from foreign currency.
Operating profit for the year increased 21 percent to $976m.
Hsu added: “We enter 2024 having advanced the company’s strategic foundation and financial position, and with confidence this phase of cost recovery and supply chain stabilization is largely behind us.
“Moving forward, we will continue to invest in differentiating our brands and enhancing our capabilities while we maintain a disciplined cost structure in our next phase of growth.”
