Kimberly-Clark(KMB) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported net sales of $5.1 billion, an increase of 2$1.74 [36] Business Line Data and Key Metrics Changes - Personal Care segment saw a 7% organic sales increase, with volume growth of 2% for the first time in five quarters [9][34] - Consumer Tissue organic growth was 2%, with North America delivering 4% organic growth [14] - K-C Professional business posted 4% organic growth, with operating margin improving by 550 basis points [35] Market Data and Key Metrics Changes - In North America, organic sales were up 7%, with volume up 3% [30] - China experienced double-digit growth in both organic sales and volume, despite category softness [10] - The company improved market shares in key markets, with significant gains in the U.K. and China [31] Company Strategy and Development Direction - The company is focused on driving innovation and commercial programming rather than outspending competitors [1][2] - Continued investment in brand communications and technology is expected to attract more consumers and increase usage occasions [32] - The company aims to enhance margins through disciplined revenue management and productivity programs [70][79] Management's Comments on Operating Environment and Future Outlook - Management raised the full-year outlook, expecting organic sales growth of 4% to 5% and adjusted earnings per share growth of 15% to 17% [18][37] - The cost environment remains mixed, with input cost headwinds expected to be approximately $50 million [17] - Management remains cautious about currency volatility impacting future performance [70] Other Important Information - The company generated$2.3 billion in cash flow from operations in the first nine months of the year [16] - Capital spending is expected to be approximately $800 million for the year [16] - The company returned$1.3 billion to shareholders through dividends and share repurchases [16] Q&A Session Summary Question: Can you provide insights on carryover pricing into 2024? - Management indicated that while there may be some carryover from pricing actions, it is not expected to be a significant driver for next year [87] Question: What is the outlook for commodity costs? - The company expects modest tailwinds from input costs going forward, with some increases in resin-based materials and energy costs anticipated [62][63] Question: How is the company managing promotional levels in North America? - Management noted that trade promotions are used to drive trial for new items, and promotional levels remain below 2019 levels [74] Question: What is the strategy for margin enhancement moving forward? - The company aims to continue enhancing margins through disciplined commercial programming and innovation, with a focus on sustainable growth [77][79]