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Shares of Kimberly-Clark Corporation (NYSE: KMB ) fell more than 1% on Wednesday after the company reported mixed results for the fourth quarter of 2022. The company expects inflation to hurt results next year but remains optimistic about being able to offset some of these headwinds through revenue. and cost management actions.
Quarterly figures
Kimberly-Clark reported sales of $4.96 billion for the fourth quarter of 2022, which is on average compared to the same period a year ago and only about $4.98 billion. Adjusted EPS rose 18% year over year to $1.54, beating the consensus target of $1.51.
Business performance
Organic sales for the fourth quarter increased 5% as net selling prices increased by approx. 10% and product mix increased sales by 1% while volume decreased by 7%. In North America, organic sales increased 1% in consumer products and 18% in KC Professional. Outside of North America, developed markets recorded 11% growth in organic sales while developing and emerging markets (D&E) grew by 3%. The company reported organic sales growth across all segments during the quarter.
According to the report, net sales in the Personal Care segment fell 3% YoY in Q4 2022. Sales in North America were flat, while sales in the D&E market fell 6%. Sales in developed markets outside North America fell 4%.
Sales in the Consumer Tissue segment remained flat in Q4 compared to the prior year. Sales in North America increased 2% while sales in the D&E market and developed markets outside North America decreased 1% and 3%, respectively.
Sales in the KC Professional segment increased 11% during the quarter. Sales in North America increased 17% while sales in the D&E market and developed markets outside North America increased 3% and 1%, respectively.
During the quarter, Kimberly-Clark’s sales benefited from net selling price increases and product mix improvements but volumes declined in all segments.
Outlook
Looking ahead to 2023, Kimberly-Clark expects inflation to have an impact on its business, but also expects gross profit to recover as it continues to implement revenue development and cost management measures that will help offset cost headwinds.
Due to tougher top line comparisons, foreign currency headwinds and higher cost headwinds, the company expects softer top line performance and earnings in the first half of 2023 with a pickup as the year progresses.
For FY2023, KMB expects net sales growth of 0-2% and organic sales growth of 2-4%. EPS is expected to increase by 2-6% over adjusted EPS in 2022.
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