Kimberly Clark Stock Falls On Q2 Earnings Miss, Slashed FY21 Outlook

Kimberly Clark Corp KMB reported second-quarter FY21 net sales growth of 2% year-on-year to $4.72 billion, missing the analyst consensus of $4.78 billion.
Organic sales decreased 3% as volumes declined 4%. In North America, organic sales fell 11% in consumer products and 4% in K-C Professional.
Volumes in North America, particularly consumer tissue, were negatively impacted by consumer and retailer destocking following the stock up that occurred in prior periods related to the global outbreak of COVID-19.
Gross profit contracted by 17% Y/Y to $1.48 billion.
Marketing, research, and general expenses rose 1% Y/Y to $854 million.
Operating income fell 34% to $613 million, with an operating margin of 13%.
Cash provided by operations declined 64.2% to $565 million, driven by higher working capital, lower earnings, and higher tax payments.
The company held $306 million in cash and equivalents as of June 30, 2021.
Adjusted EPS of $1.47 missed the analyst consensus of $1.74.
"We are facing significantly higher input costs and a reversal in consumer tissue volumes from record growth in the year-ago period as consumers and retailers in North America continued to reduce home and retail inventory," said Chairman and CEO Mike Hsu.
Outlook: Kimberly has cut FY21 adjusted EPS guidance to $6.65 - $6.90 from the prior view of $7.30 - $7.55, versus a consensus of $7.35.
It sees organic sales decline of 0% to 2%, versus prior view for organic sales growth of 0% to 1%. It expects a net sales increase of 1% to 4%, versus the previous assumption of 3% to 5%.
Price action: KMB shares are trading lower by 3.67% at $130.0 in premarket on the last check Friday.

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