Yahoo Finance Kimberly-Clark (KMB) Up More Than 15% in 6 Months: Here's Why
Kimberly-Clark Corporation KMB is benefiting from the effective implementation of revenue growth management strategies. The company is progressing with its long-term strategy aimed at achieving sustainable growth by leveraging its strengths and sharpening its strategic focus.
Focus on innovation, consumer-centric approach and strategic investments in product development are leading to successful launches and market expansion. The company is prioritizing long-term growth opportunities, such as maximizing brand investments, improving its product mix and boosting volume growth through a consumer-centric approach.
Management anticipates fiscal 2024 organic net sales to increase in mid-single-digit percentage. The annual adjusted operating profit is projected to grow at a low-teens percentage rate at a constant-currency (cc) basis. Adjusted earnings per share are anticipated to rise at a low-teens percentage rate at cc during the fiscal 2024.
This Zacks Rank #2 (Buy) company’s shares have risen 19.2% in the past six months compared with the industry’s 0.0%. The stock has increased the Zacks Consumer Staples’s growth of 3.3% during this time. Let’s delve deeper.
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Revenue Growth Management on Track
Effective implementation of revenue growth management strategies (like pricing) and ongoing productivity initiatives have been aiding Kimberly-Clark’s organic sales and gross margin amid cost inflation. In first-quarter 2024, the company’s organic sales increased 6% on a 4% rise in price stemming from pricing actions undertaken to tackle increased local costs in hyperinflationary economies, especially across Argentina. Product mix and volume were favorable by 1% each. Gross margin expanded 390 basis points (bps) to 37.1% on organic growth and gross productivity gains. Management anticipates pricing in hyperinflationary economies to contribute approximately 300 bps to organic growth for the year.
Kimberly-Clark is undertaking robust steps to lower costs. In the first quarter, management generated nearly $120 million in gross productivity through its integrated, end-to-end approach to margin management. The company realized incremental savings from enhanced procurement capabilities and deepened relationships with strategic suppliers, positioning the company to navigate future cost challenges better.
Key Growth Strategies
KMB is on track with its multi-year strategy aimed at achieving sustainable growth by leveraging its strengths and refining its strategic focus. The company is accelerating pioneering innovation to address unmet consumer needs via groundbreaking technologies. In the past three years, its new product launches contributed more than 50% to net sales in the Consumer businesses, playing a major role in driving almost 60% of incremental Consumer organic growth in first-quarter 2024.
Management is focused on optimizing its margin structure. The company emphasizes a robust and continuous stream of cost savings to drive investments in innovation and capabilities. The company’s wiring organization for growth strategy is based on strengthening and streamlining the enterprise to enhance agility and efficiency.
Management is refining its portfolio focus by concentrating on businesses that bolster market positions. This ensures that resources and investments are directed towards key competitive areas and core categories.
Kimberly-Clark’s emphasis on these advantages is likely to keep it in investors’ good books.
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