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How KMB Stock Could Perform ahead of Q4 Results


Jan. 16 2019, Published 8:08 a.m. ET

What to expect

Kimberly-Clark (KMB) is scheduled to announce its fourth-quarter results on Wednesday, January 23. We don’t expect Kimberly-Clark to impress investors with its fourth-quarter results. Kimberly-Clark’s top line is projected to decline. Meanwhile, margin headwinds are expected to take a toll on its earnings growth rate.

Wall Street estimates paint a gloomy picture on the sales front. Analysts expect Kimberly-Clark’s fourth-quarter sales to decline on a YoY basis as persisting challenges in China, increased competition in the value segment, and adverse currency rates are likely to hurt the company. However, improved pricing and mix could support the fourth-quarter sales.

Projected weakness in sales and continued inflation in commodities are anticipated to negatively affect the company’s profit margins, which could continue to slide. Soft sales and tepid margins are likely to restrict the bottom-line growth rate.

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Analysts are pessimistic about the top-line performance of the major household and personal care product manufacturers in the near term. Unfavorable currency rates and increased competition are expected to hurt the revenues of these companies. Besides Kimberly-Clark, analysts expect net sales to decline for Colgate-Palmolive (CL) and Procter & Gamble in the near term. Meanwhile, acquisitions and innovation are likely to support the top-line growth rate for Clorox (CLX) and Church & Dwight (CHD).

Stock performance so far

Kimberly-Clark stock is up 2.4% so far this year as of January 15. In comparison, the S&P 500 Index is up 4.1%. Meanwhile, shares of Colgate-Palmolive and Church & Dwight are up 4.5% and 2.5%, respectively. Procter & Gamble stock remained roughly flat, while Clorox stock is down about 1% so far this year.


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