During the December-quarter, net sales dropped 1% annually to $4.6 billion, hurt mainly by a 2% decline in the personal care segment that more than offset a 2% growth in the sales of K-C Professional products. The top line, which was also impacted by unfavorable foreign exchange rates, topped the estimates. Meanwhile, there was a 3% increase in organic sales during the quarter, supported by an improvement in net selling prices.
There was a 3% increase in organic sales during the quarter, supported by an improvement in net selling prices
Kimberly-Clark’s board of directors approved a 3% increase in quarterly dividend for fiscal 2019, marking the 47th hike in a row. During the quarter, the management repurchased 1.8 million shares for about $199 million.
“We expect the environment in 2019 will remain challenging, although somewhat better than in 2018. In this environment, our teams will continue to execute our strategies for long-term success. We are targeting to deliver a solid operating plan, with higher organic sales growth compared to 2018 and improved margins despite expectations for significant headwinds from commodities and currencies,” said CEO Mike Hsu.
The management is expecting a 1-2% decline in net sales and a 2% increase in organic sales in fiscal 2019. Full-year adjusted earnings are estimated o be in the range of $6.50 per share to $6.70 per share. Operating profit, on an adjusted basis, is forecast to grow between 1% and 4%. During the year, the adjusted effective tax rate is seen increasing to 23-25%. The outlook, however, fell short of market expectations.
Kimberly-Clark’s stock dropped about 2% in premarket trading Wednesday following the earnings report, after closing the previous session lower.