Huggies-maker Kimberly-Clark’s shares rise following first quarter results

US personal care company Kimberly-Clark’s shares climbed five per cent yesterday on the back of its first-quarter results, which revealed a slight decline in sales and adjusted earnings.

The Huggies and Kleenex-maker’s net sales fell by two per cent in the first quarter of 2019 compared to a year earlier, while its adjusted earnings per share were $1.66, compared to a 2018 figure of $1.71.

Analysts had been expecting lower figures in both areas for the Dallas-based company, however. Shares in the firm climbed to $130.25 following the release of the results.

Kimberly-Clark said that its sales had been hurt by the effect of changing foreign exchange rates, and that organic sales were up three per cent year-on-year, driven by emerging markets.

Cash provided by operations was $317m in the first quarter of 2019 compared to $542 million in 2018. The decline was driven by increased working capital and payments related to a restructuring programme begun in 2018 that aims to streamline the company and improve its flexibility.

Chief executive Mike Hsu said: “I'm encouraged with our first quarter results. We made excellent progress driving higher selling prices to help offset commodity and currency headwinds.”

“We also continued to launch innovations, pursue our growth priorities and invest in our brands. In addition, we generated $115m of cost savings and returned $510m to shareholders through dividends and share repurchases.”

Hsu said Kimberly-Clark would be sticking with its outlook for 2019, which predicts a one to two per cent decline in net sales and adjusted earnings of $6.50 to $6.70 per share.