Kimberly-Clark Revenue Falls -- Update
January 25 2016 - 5:26PM
Dow Jones News
By Austen Hufford and Paul Ziobro
Kimberly-Clark Corp. said resilience among U.S. shoppers helped
offset weakness in its businesses in Brazil, China and Russia that
dragged on quarterly sales.
The maker of Huggies diapers and Kleenex tissue said shoppers in
the U.S. are willing to spend more on new products, such as
improved diapers, feeling the benefits of a falling unemployment
rate and lower gas prices. In addition, store brands have stopped
gaining market share in most of the categories Kimberly-Clark sells
in, Chief Executive Thomas Falk said.
"It's another signal that you're not seeing as much trade down
at this level," Mr. Falk said in an interview on Monday. "The U.S.
consumer is in a pretty good place."
Mr. Falk's comments come as Kimberly-Clark saw the stronger
dollar wipe out much of the growth elsewhere in the world. The
company's fourth-quarter sales fell 6% to $4.5 billion, though they
would have been 5% higher without currency fluctuations.
Kimberly-Clark reported gains in organic sales of its adult
incontinence and baby diaper businesses.
Shares of the company fell 3% on Monday, but are up about 10%
over the past 12 months.
Overall, Kimberly-Clark reported a profit of $333 million in the
fourth quarter, up sharply from a loss of $83 million a year
earlier when the company took a charge related to the revaluation
of the Venezuelan currency.
Sales in emerging markets were up 9% on an organic basis, though
that includes slowdowns in some important markets. Mr. Falk said
Kimberly-Clark's business-to-business division experienced a
slowdown in China. It is still opening factories and expanding to
more cities to capitalize on the growing birthrate, which could get
a boost this coming year. he said. Chinese families may have put
off new babies last year, so they could be born during the coming,
more auspicious Year of Monkey.
"Our team views it as a very good year," he said, adding that
the number of births could rise as much as 7%.
Other emerging countries Kimberly-Clark has targeted, such as
Brazil and Russia, are more problematic as higher inflation is
hurting demand and slowing down economic growth.
Kimberly-Clark forecast per-share earnings would rise to between
$5.95 and $6.15 a share this quarter, compared with the average
analyst estimate of $6.14 a share. Sales are expected to either
fall 3% or be flat, owing largely to the stronger dollar.
Write to Austen Hufford at austen.hufford@wsj.com and Paul
Ziobro at paul.ziobro@wsj.com
(END) Dow Jones Newswires
January 25, 2016 17:11 ET (22:11 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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