reported weaker-than-expected earnings on Friday, sending its stock falling. The consumer products maker also warned of rising input costs as it lowered its full-year outlook.
Kimberly-Clark (ticker: KMB) said it earned $584 million, or $1.72 a share, in the first quarter, down from $1.92 a share in the year-ago period. On an adjusted basis, earnings were $1.80 a share. Revenue slipped 5% to $4.74 billion. Analysts were looking for EPS $1.93 on revenue of $4.975 billion.
Kimberly-Clark slid 4% to $134.75 in recent trading. The shares are up just over 4% year to date, but have fallen nearly 1% in the past 12 months.
It isn’t surprising that the shares are down after the results. The company’s recent inflation warning and lapping the first anniversary of the pandemic had already lowered investor expectations, but Kimberly-Clark still fell short on both the top and bottom line.
Volumes were 10% lower in the quarter, compared with an 8% gain a year ago, when consumers were stocking up at the start of the Covid-19 pandemic. Kimberly-Clark also cited severe winter weather that disrupted production and supply chains. Sales of personal care products rose 2%, boosted by overseas expansion, but sales at its consumer tissue segment and its professional business declined 12% and 11%, respectively.
In addition, Kimberly-Clark said input costs, which it had previously flagged, rose $135 million in the quarter, and would likely be elevated for the year. The company is now modeling for $900 million to $1.05 billion in input costs for 2021, from $450 million to $600 million previously.
To that end, the company lowered its full-year forecast. It now expects earnings between $7.30 and $7.55 a share on sales growth of 3% to 5% for 2021—down from its prior guidance for earnings of $7.75 to $8.00 a share and sales growth of 4% to 6%. It sees organic growth flat to up 1%, down from a prior range of 1% to 2% growth. Analysts are looking for earnings of $7.72 a share and revenue of $19.97 billion for the year.
A more modest outlook for the year means that consensus estimates will likely come down further. In addition, the increased commodity price forecast won’t help other consumer staples stocks, which have lagged behind as they face similar costs.
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