Kimberly-Clark (KMB) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 25, 2023 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks：

Operator

Good day, everyone, and welcome to the Kimberly-Clark First Quarter 2023 Earnings Call. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation.

It is now my pleasure to turn the floor over to your host, Christina Cheng. Ma'am, the floor is yours.

Christina Cheng

Welcome, everyone, to our first quarter 2023 earnings conference call. Before we begin, please note, today's presentation will include forward-looking statements. Our actual results may vary materially from those expressed or implied in our forward-looking statements and you should not place undue reliance on any forward-looking statements. Please refer to our SEC filings for a list of factors that could cause our actual results to deviate materially from our expectations. Our remarks today refer to adjusted results, which exclude certain items described in our news release. We use non-GAAP financial measures to help investors understand our ongoing business performance. Please consult our press release for a discussion of our non-GAAP financial measures and reconciliations to comparable GAAP financial measures. We have published supplemental material, which can be found in the Investor Relations section of our website.

Participating in today's call are Chairman and CEO, Michael Hsu; and our Chief Financial Officer, Nelson Urdaneta. Mike will start the discussion with our strategic priorities and provide an overview of our performance for the quarter. Nelson will provide a detailed discussion of our Q1 results and our outlook before we open the floor for Q&A.

With that, I turn the call over to Mike.

Mike Hsu

Thank you, Christina.

I'm encouraged by our solid start to the year. We delivered organic growth of 5%, cycling 10% growth in the year-ago quarter. Category growth remain healthy, pricing execution was strong, and costs have begun to stabilize. These primary factors enabled us to continue improving gross margin resulting in a 25% increase in adjusted operating profit and a 24% increase in adjusted earnings per share.

Given our Q1 performance and increasing confidence in our underlying operating plan assumptions, we're raising our 2023 EPS outlook to 6% to 10% growth. Margin recovery continues to be a top priority, and I'm pleased with the strong progress we're making. This quarter we expanded gross margin by 340 basis points versus year ago building on our momentum from the second half of 2022. While we are encouraged with our progress, we're still operating in a challenging environment, input costs have stabilized, but continue to trade well-above 2019 levels.