Kimberly-Clark Reports Mixed Sales, Significant Profit Growth in Q3 2024

Kimberly-Clark Corporation reported its financial results for the third quarter and the nine months ended September 30, 2024, reflecting a mixed performance in net sales and significant improvements in profitability metrics compared to the previous fiscal period.

For Q3 2024, net sales totaled $4,952 million, a decrease of 4% from $5,132 million in Q3 2023. For the nine months ended September 30, 2024, net sales were $15,130 million, down 2% from $15,461 million in the same period last year. The decline in sales was attributed to divestitures, particularly the sale of the personal protective equipment (PPE) business, and lower organic sales volumes in North America. However, organic sales growth for Q3 2024 was reported at 1%, driven by higher net selling prices in hyperinflationary markets, notably Argentina.

Despite the drop in sales, Kimberly-Clark experienced a substantial increase in profitability. Gross profit for Q3 2024 was $1,784 million, slightly down from $1,838 million in Q3 2023, while operating profit surged to $1,154 million, a 49% increase from $774 million in the prior year. For the nine-month period, operating profit rose to $2,662 million, up 59% from $1,674 million in 2023. This improvement was supported by gross supply chain productivity savings and effective cost management.

Net income attributable to Kimberly-Clark for Q3 2024 reached $907 million, compared to $587 million in Q3 2023, marking a significant increase. For the nine months, net income was $2,098 million, up from $1,255 million in the previous year. Diluted earnings per share for Q3 2024 were $2.69, compared to $1.73 in Q3 2023, while for the nine months, it increased to $6.21 from $3.70.

Strategically, the company is undergoing a transformation initiative announced in March 2024, aimed at enhancing growth focus and reducing structural costs by reorganizing into three business segments: Personal Care, Consumer Tissue, and K-C Professional. This initiative is expected to result in workforce reductions of 4% to 5% and is projected to incur total costs of approximately $1.5 billion pre-tax, with cash costs primarily related to workforce reductions.

Additionally, Kimberly-Clark completed the sale of its PPE business for $635 million, resulting in a pre-tax gain of $566 million. The company also recognized impairment charges of $97 million in Q3 2024 related to its Personal Care segment, primarily due to revised financial projections for certain brands.

As of September 30, 2024, total assets were $17,165 million, down from $17,344 million at the end of 2023, while total stockholders' equity increased to $1,444 million from $1,068 million. The company reported cash and cash equivalents of $1,111 million, up from $1,093 million at the end of 2023.