Kimberly Clark’s Q2 Results Miss Estimates, Guidance Lowered

Multinational personal care products maker Kimberly Clark (KMB) reported lower-than-expected financial results for the second quarter of 2021. The company produces surgical and medical instruments and sanitary paper products.

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Adjusted earnings per share (EPS) declined to $1.47 from $2.20 reported in the second quarter of 2020 and missed the Street’s estimate of $1.74. Quarterly net sales rose 2% year-over-year to $4.7 billion, slightly lower than analysts’ expectations of $4.78 billion.

Personal Care Segment’s sales grew 13% year-over-year to $2.5 billion; sales of Consumer Tissue Segment declined 13% to $1.4 billion; and K-C Professional (KCP) Segment’s sales climbed 6% to $800 million. (See Kimberly stock chart on TipRanks)

The Chairman and CEO of Kimberly, Mike Hsu, said, “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.”

Following the second-quarter results, the company lowered its guidance for full-year 2021. It expects net sales to grow by 1% to 4%, compared to the earlier outlook for 3% to 5%. Adjusted EPS is likely to range from $6.65 to $6.90, down from the previous guidance of $7.30 to $7.55.

Last week, RBC Capital analyst Nik Modi maintained a Hold rating on the stock with a price target of $137 (1% upside potential). The analyst expects the company to report EPS of $1.73 in the third quarter.

Overall, the stock has a Hold consensus based on 3 Buys, 4 Holds and 1 Sell. The average Kimberly Clark price target of $142.86 implies 5.3% upside potential. The company’s shares have lost nearly 8% over the past year.