MW Kimberly-Clark's dividend hike props up stock despite earnings miss

By Ciara Linnane

2024 was a 'breakthrough' year as company launched a transformation overhaul

Kimberly-Clark Corp.'s stock was flat early Tuesday, after the maker of Huggies diapers, Kleenex tissues and Scott toilet paper raised its quarterly dividend, offsetting a fourth-quarter profit miss.

The company raised the dividend by 3.3% to $1.26, with the new dividend payable April 2 to shareholders of record as of March 7.

Chief Executive Mike Hsu said 2024 was a "breakthrough" year for the company, as it launched a multiyear transformation program and rewired the business into three segments.

"We delivered organic top-line growth with an upward inflection in volume-plus-mix. This, coupled with improved productivity, has driven strong adjusted profit growth and fueled investments to advance our competitive advantage," Hsu said in prepared remarks.

The Dallas-based company $(KMB)$ had per-share earnings of $1.34, down from $1.50 a year ago, due to charges incurred to cover a transformation plan. Adjusted per-share earnings came to $1.50, just below the $1.51 FactSet consensus.

Sales fell 0.8% to $4.928 billion from $4.970 billion a year ago, just ahead of the $4.855 billion FactSet consensus.

Gross margin was 34.% while adjusted gross margin was 35.4%, up 50 basis points from the year-earlier period, as productivity gains were offset by investments and manufacturing-cost headwinds.

The company said it expects 2025 organic sales, which exclude the impact of currency and acquisitions, to outpace the weighted average growth in the categories and countries in which it competes, which are currently growing at about 2%.

Sales will be hit by a roughly 300 basis-point hit from currency translation and a negative 240 basis points from a combination of the divestiture of the company's PPE business and exit of its U.S. private-label diaper business.

Those same factors are expected to shave about 320 basis points off adjusted EPS, while the strong dollar is expected to shave 350 to 400 basis points off EPS.

By segment, North American sales fell 0.5% to $2.7 billion, while international personal care sales fell 1.3% to $1.4 billion.

International family care and professional sales fell 1.2% to $831 million.

The stock has gained 8% in the last 12 months, while the S&P 500 SPX has gained 22.9%.

-Ciara Linnane

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January 28, 2025 07:33 ET (12:33 GMT)

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