Kimberly-Clark Lowers Guidance as Sales Slip
October 24 2016 - 9:20AM
Dow Jones News
Kimberly-Clark Corp. lowered its guidance Monday, sending shares
lower as third-quarter organic sales were flat and currency rates
continued to hurt the top line.
The maker of Kleenex tissues and Huggies diapers dropped its
current-year forecast for organic sales growth, a metric that
excludes the impact of foreign currency rates, to 2% compared with
its previous expectation of growth between 3% and 5%. The company
also narrowed its earnings guidance to $5.95 to $6.05 per share
compared with the previous range of $5.95 to $6.15.
Dallas-based Kimberly-Clark reported that organic sales
increased 3% in developing and emerging markets but decreased in
all other markets, making growth flat companywide for the
quarter.
Foreign currency rates reduced sales by more than 2% in the
quarter.
Kimberly-Clark, like other consumer product rivals, had targeted
emerging markets, such as Venezuela and Russia, to help counter
sluggish growth in developed markets. But higher inflation and
political turmoil have challenged operations, even causing some
plants to halt production entirely.
Over all for the quarter, Kimberly-Clark reported a profit of
$550 million, or $1.52 a share, up from $517 million, or $1.41 a
share, a year earlier. Excluding certain charges, earnings were
$1.52 a share compared with $1.51 a share last year. Revenue fell
2.6% to $4.59 billion.
Analysts polled by Thomson Reuters had forecast earnings of
$1.54 on $4.73 billion in revenue.
Gross margin rose to 36.4% from 35.7%.
Shares fell 3.9% to $114.88 in premarket trading. The stock has
fallen 11% in the past three months through Friday's close.
Write to Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
October 24, 2016 09:05 ET (13:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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