Kimberly-Clark's Cost Guidance Is Another Sign That Inflation Is Still Hitting Hard | KMB Message Board Posts


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Msg  90 of 90  at  7/26/2022 4:12:40 PM  by

jerrykrause


Kimberly-Clark's Cost Guidance Is Another Sign That Inflation Is Still Hitting Hard

 

Kimberly-Clark's Cost Guidance Is Another Sign That Inflation Is Still Hitting Hard

 
 

Kimberly-Clark's second-quarter earnings beat Wall Street's estimates, but the stock was falling on Tuesday after the company said it expected input costs to remain high for the rest of the year.

Kimberly-Clark's (ticker: KMB) adjusted earnings per share were $1.34 in the second quarter, narrowly topping estimates for $1.32 a share. Revenue was $5.1 billion, up 7% from the same period a year ago and above projections for $4.99 billion.

Still, the stock fell 1.6% on Tuesday as investors grew skittish that rising costs could hurt future performance. Second-quarter results were affected by $405 million of higher input costs, the company said, noting that factors ranging from higher marketing and general expenses to the effect of moves in exchange rates dragged on its operating profit. Kimberly-Clark said it is expecting "key cost inputs" to increase between $1.4 billion and $1.6 billion, up from previous guidance that ranged between $1.1 billion and $1.3 billion.

"Our results also reflect ongoing market volatility and significant input cost inflation," said CEO Mike Hsu in a press release. "We continue to be thoughtful with our response to inflation, focusing on providing value to our consumers while leveraging price and cost discipline to mitigate macro headwinds for margin improvement over time."

While the company maintained its full-year earnings per share guidance of $5.60 to $6.00, it warned investors to expect earnings to be "at the lower end of the range." Currently, analysts are expecting 2022 EPS to be $5.71, according to FactSet. Kimberly-Clark also updated its organic sales growth outlook to between 5% and 7%, up from 4% to 6%.

"KMB's guidance and results reflect a few themes we have seen so far this earnings season and expect to continue seeing: beats on topline and organic driven by a large magnitude of pricing," wrote RBC Capital Markets analyst Nik Modi in a research note. "We expect softening volume trends in the face of such large pricing increases, though expect continued outperformance vs. historical and internal expectations."

 


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