Kimberly-Clark 2Q 2018 Results: Net Sales up 1 percent from Year ago

Kimberly-Clark Corporation today reported second quarter 2018 results.

Second quarter 2018 net sales of $4.6 billion increased 1 percent compared to the year-ago period. Changes in foreign currency exchange rates benefited sales by 1 percent while organic sales were even year-on-year. 

Chairman and CEO Thomas J. Falk said, "Our second quarter results reflect a challenging environment, particularly with commodity inflation. Nonetheless, we continue to manage our company with financial discipline, as we generated $150 million of cost savings, reduced discretionary spending and returned approximately $575 million to shareholders through dividends and share repurchases."

Falk added, "For the full year, we are maintaining our organic sales growth target and reducing our earnings outlook because of significantly higher commodity costs and the recent weakening of most foreign currencies. Given these headwinds, we will continue to aggressively manage costs and evaluate further opportunities to increase net selling prices. While the near-term environment has become more difficult, we continue to execute our long-term strategies to grow our brands and deliver cost savings while we implement our restructuring that will make Kimberly-Clark an even stronger company."

Second quarter operating profit was $674 million in 2018, including charges related to the 2018 Global Restructuring Program. Second quarter adjusted operating profit was $774 million in 2018 compared to operating profit of $814 million in 2017. Results were impacted by $200 million of higher input costs, driven by $125 million in pulp and $45 million in other raw materials. The operating profit comparison was also affected by lower net selling prices and volumes. On the other hand, results benefited from $110 million of cost savings from the company's FORCE (Focused On Reducing Costs Everywhere) program and $40 million of cost savings from the 2018 Global Restructuring Program. In addition, the comparison benefited from improved product mix and reduced marketing, research and general spending, including lower general and administrative costs.