Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you explain why the full Q1 beat wasn't passed through in your guidance?
A: Michael D. Hsu, Chairman & CEO of Kimberly-Clark, highlighted the company's strong start to the year, emphasizing that the decision not to pass through the full Q1 beat was strategic, considering the stable business environment despite global challenges. Nelson Urdaneta, Senior VP & CFO, added that the decision was influenced by factors like geopolitical challenges and commodity price upticks, which are expected to contribute to an inflationary impact of around $250 million for the year.
Q: How are you progressing in terms of market share, particularly with the missteps by competitors?
A: Michael D. Hsu noted significant progress in market share, with improvements expected to continue. He mentioned that North America showed strength, recovering from previous supply constraints, and highlighted successful marketing campaigns and restored merchandising as key drivers.
Q: Could you provide more details on the $120 million in productivity realized this quarter and its relation to the $3 billion productivity plan?
A: Nelson Urdaneta explained that the $120 million is part of the broader $3 billion productivity plan, emphasizing the company's new integrated margin management process that enhances visibility and control over costs and productivity across the value chain.
Q: What impact did retail inventory reductions have in Q1, and what are the expectations moving forward?
A: Michael D. Hsu acknowledged an 80 basis point headwind from retail inventory reductions globally, with a 170 basis point impact in North America. He described this as typical retailer behavior for the time of year and something that had been anticipated and factored into their full-year outlook.
Q: Can you discuss the consumer environment and category health, especially given the backdrop of economic pressure?
A: Michael D. Hsu described the consumer environment as resilient, with continued robust category demand. He noted the growth in premium segments across both developed and emerging markets and acknowledged some limited trade-down in categories like adult care and household towels.
Q: What are your strategies for managing through potential reinflation of input costs like pulp?
A: Michael D. Hsu expressed confidence in managing potential cost increases, citing stable input costs and effective productivity plans. Nelson Urdaneta added that the company has improved its risk management and procurement strategies to better anticipate and react to cost fluctuations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
