Kimberly-Clark posts record profits in Q1
DALLAS — First quarter 2013 net sales at Kimberly-Clark Corporation rose by a little more than 1% to $5.3 billion compared to the same period last year. The company posted record profits, up 12% to $783 million from $700 million in the same quarter last year.
Organic sales, which exclude the impact of changes in foreign currency rates and lost sales as a result of European strategic changes and pulp and tissue restructuring actions, rose 3% for the first quarter 2013. The company’s adjusted operating profit for the quarter was up 16% to $850 million from $735 million in the same quarter last year. Adjusted results in 2013 exclude a $36 million charge for the re-measurement of the local currency-denominated balance sheet due to the February 2013 devaluation of the Venezuelan bolivar and $31 million of restructuring costs for European strategic changes. Adjusted results in 2012 exclude $35 million of costs for pulp and tissue restructuring actions.
"We are off to an excellent start to the year. We achieved solid organic sales growth compared to a strong year-ago result, including benefits from targeted growth initiatives and product innovations. We improved adjusted gross margin by 140 basis points and adjusted operating profit margin by 200 basis points. We delivered all-time record adjusted earnings per share, reflecting continued momentum in K-C International, $85 million of cost savings from our ongoing Focused on Reducing Costs Everywhere program and above-plan volume growth in North American consumer tissue. Finally, we improved cash flow and returned $0.8 billion to shareholders through dividends and share repurchases. As a result of our strong first quarter performance, we are raising our full-year outlook for adjusted earnings per share while we continue to invest for long-term success. We are optimistic about our plans and believe that execution of our global business plan strategies will generate attractive returns to shareholders," said Kimberly-Clark chairman and CEO Thomas J. Falk.
The increase in year-over-year adjusted operating profit included benefits from organic sales growth and $85 million in cost savings from the company's FORCE program. Input costs were $35 million higher overall versus 2012, with $15 million of higher fiber costs, a $10 million increase for other raw materials and $10 million of higher distribution costs. Overall marketing, research and general expenses increased versus the same period last year, driven by higher administrative costs, while strategic marketing was down slightly compared to a high level of spending in the same period last year.
Kimberly-Clark’s brands are sold in more than 175 countries.