Kimberly-Clark (NYSE: KMB) reported Q1 EPS of $2.13, $0.16 better than the analyst estimate of $1.97. Revenue for the quarter rose 8% to $5 billion, versus the consensus estimate of $4.89 billion.

Executive Summary

• First quarter 2020 net sales of $5.0 billion increased 8 percent compared to the year-ago period, including organic sales growth of 11 percent.
• Diluted net income per share for the first quarter was $1.92 in 2020 and $1.31 in 2019.
• First quarter adjusted earnings per share were $2.13 in 2020, up 28 percent compared to $1.66 in 2019. Adjusted earnings per share exclude certain items described later in this news release.
• First quarter cash provided by operations was $704 million in 2020 and $317 million in 2019.
• The company is withdrawing its previous full-year 2020 financial outlook due to the uncertainty related to the COVID-19 pandemic.

Chairman and Chief Executive Officer Mike Hsu said, "Since the outbreak of COVID-19, Kimberly-Clark has taken decisive actions to protect the health and safety of our people, customers and consumers, proactively managed our global supply chain to ensure a steady supply of our essential products, and positioned our brands to help support those in need. I am incredibly proud of all the ways our employees are responding to this crisis, all while staying focused on serving consumers who count on Kimberly-Clark."

Hsu continued, "A combination of increased consumer demand for our products and strong execution by our teams is reflected in our first quarter results. We increased investments in our business and our market positions remain broadly healthy. In addition, we generated very strong cash flow and further strengthened our balance sheet by executing two long-term debt transactions in the quarter. Given the lack of visibility and uncertainty about the pandemic and its potential effects on the global economy and our business, we are temporarily suspending our forward-looking guidance. We expect that we will resume guidance when the environment stabilizes and we can provide a clear picture of our expectations. As always, we are prudently managing our business in the near-term while maintaining focus on the long-term health of our company."

First Quarter 2020 Business Segment Results

Personal Care Segment

First quarter sales of $2.4 billion increased 6 percent. Volumes increased approximately 7 percent, product mix improved 2 percent and net selling prices rose 1 percent. Changes in currency rates reduced sales by 3 percent. First quarter operating profit of $527 million increased 9 percent. The comparison benefited from organic sales growth, cost savings and lower input costs. Results were impacted by higher advertising spending, increased selling, general and administrative costs, other manufacturing cost increases and unfavorable currency effects.

Sales in North America increased 10 percent. Volumes increased 7 percent, product mix improved 2 percent and net selling prices rose 1 percent. Volumes increased double-digits in adult care, high-single digits in feminine care and mid-single digits in baby and child care. The changes in product mix and net selling prices were driven by baby and child care.

Sales in developing and emerging markets increased 3 percent despite a 6 point negative impact from changes in currency rates. Volumes increased 6 percent, product mix improved 3 percent and net selling prices rose 1 percent. Volumes increased in Asia-Pacific, Eastern Europe, the Middle East and South Africa.

Sales in developed markets outside North America (Australia, South Korea and Western/Central Europe) increased 5 percent despite a 5 point negative impact from changes in currency rates. Volumes increased 8 percent, driven by Australia and Western/Central Europe, and net selling prices and product mix each improved 1 percent.

Consumer Tissue Segment

First quarter sales of $1.7 billion increased 13 percent. Volumes increased 14 percent and net selling prices rose 1 percent, while changes in currency rates reduced sales 2 percent. The volume increase was driven by increased shipments in all major geographies to support consumer stock up related to the global outbreak of COVID-19. First quarter operating profit of $365 million increased 51 percent. Results benefited from organic sales growth, lower input costs and cost savings. The comparison was impacted by other manufacturing cost increases, higher selling, general and administrative costs, increased advertising spending and unfavorable currency effects.

Sales in North America increased 12 percent. Volumes rose 10 percent and net selling prices improved 3 percent, while product mix was down 1 percent. The volume increase included double-digit gains on bathroom tissue and facial tissue.

Sales in developing and emerging markets increased 10 percent despite a 3 point negative impact from changes in currency rates. Volumes increased 12 percent and product mix improved 2 percent, while net selling prices were down 1 percent. Volumes increased in all major geographies.

Sales in developed markets outside North America increased 17 percent. Volumes rose 21 percent, with significant increases in all markets, and product mix improved 1 percent. Changes in currency rates reduced sales 4 percent and net selling prices fell 1 percent.

K-C Professional (KCP) Segment

First quarter sales of $0.8 billion increased 4 percent. Volumes increased 4 percent, net selling prices rose 2 percent and product mix improved 1 percent. Changes in currency rates and business exits in conjunction with the 2018 Global Restructuring Program reduced sales by 2 percent and 1 percent, respectively. First quarter operating profit of $181 million increased 21 percent. Results benefited from organic sales growth, cost savings and lower input costs. The comparison was impacted by higher selling, general and administrative costs and other manufacturing cost increases.

Sales in North America increased 5 percent. Volumes increased 4 percent and net selling prices and product mix each improved 1 percent. Business exits in conjunction with the 2018 Global Restructuring Program reduced sales 1 percent.

Sales in developing and emerging markets increased 2 percent despite a 4 point negative impact from changes in currency rates. Volumes and net selling prices each increased 3 percent, while product mix was down 1 percent.

Sales in developed markets outside North America were up 5 percent. Product mix improved 4 percent and volumes and net selling prices each increased 3 percent, while currency rates were unfavorable by 4 percent.

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