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Why KMB’s Sales Are Projected to Fall in the Near Term

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Nov. 20 2020, Updated 4:53 p.m. ET

Consensus estimate

Wall Street expects Kimberly-Clark’s sales (KMB) to remain weak in the near term, at least over the next couple of quarters. Analysts expect Kimberly-Clark’s net sales to decline 2.7% in the fourth quarter of 2018. Meanwhile, its top line is forecast to fall 4.1% in the first quarter of 2019.

Kimberly-Clark’s fourth-quarter top line is expected to take a hit from lower pricing and volumes in China. Adverse currency rates are likely to remain a drag. Top-line challenges are likely to persist during the first quarter of 2019 and expected to hurt sales. Also, the first quarter of 2019 faces tough YoY (year-over-year) comparisons. Kimberly-Clark’s net sales increased 5.1% during the first quarter of 2018.

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In comparison, Wall Street expects Procter & Gamble’s (PG) top line to decline over the next couple of quarters, reflecting adverse currency rates. Colgate-Palmolive (CL) could continue to disappoint on the sales front. On the contrary, innovation and acquisitions are expected to drive the top lines at Clorox (CLX) and Church & Dwight (CHD) in the near term.

Recent performance

Kimberly-Clark hasn’t impressed with its recent sales performance. During the last reported quarter, Kimberly-Clark’s net sales decreased about 2% YoY. Unfavorable currency rates and lower volumes took a toll on the top-line growth rate.

However, organic sales increased 1% on a YoY basis, reflecting benefits from higher pricing and a favorable mix.

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