Kimberly-Clark (K-C) has reported the highest volume growth achieved in five years in its second quarter results, driven by resilient consumer demand and innovation-led volume growth.
Net sales for the quarter were $4.2bn, down 1.6%, driven primarily by divestitures and business exits and unfavourable currency translation, with organic sales growth of 3.9% versus the prior year.
Reported gross margin was 35.0%; adjusted gross margin was 36.9%, down 180 basis points versus the prior year.
Second quarter operating profit was $592m compared to $539m a year earlier.
Mike Hsu, K-C Chairman and Chief Executive, said: “Our second quarter results are indicative of the exceptional progress we are making executing our Powering Care strategy.
“This was a very active quarter and one of the strongest in our recent history.
“We delivered strong organic sales growth, fuelled by the highest volume growth we’ve achieved in five years.”
For the first half of the year, sales of $8.2bn decreased 4.0% primarily due to an approximately 3.4% negative impact from a combination of the PPE divestiture and the exit of the company’s private label diaper business in the US, as well as an approximately 1.7% negative impact from foreign currency translation.
Organic sales grew 1.2 percent primarily from a 2.3 percent increase in volume, partially offset by price investments of 1.2 percent, while portfolio mix was broadly in line with a year ago.
Year-to-date operating profit was $1.2bn, including $196m of costs related to the company’s transformation initiative.
Hsu added: “Our durable brands, differentiated value propositions and innovation investments enabled us to enhance and maintain leading market share positions across categories and price tiers.
“We took decisive actions to set Kimberly-Clark up for enhanced, sustainable growth and profitability.”
*Reported results are based on continuing operations and exclude the International Family Care and Professional (“IFP”) business, which is reported as discontinued operations.
