An unwelcome change in guidance was the development pushing down Kimberly-Clark‘s (KMB -1.96%) share price on Tuesday.
The sturdy consumer goods company released quarterly results that weren’t awful, but the market was concerned about that adjustment. In mid-afternoon trading, Kimberly-Clark’s stock was down by almost 3% as a result. Meanwhile, the bellwether S&P 500 index was rising by just under 2%.
Declines in all three business segments
Kimberly-Clark’s first quarter of 2025 saw the company earn $4.84 billion in net sales, a figure that was down 6% from the same period of 2024. Management attributed the decline to “impacts of currency and divestitures and business exits.” Nevertheless, analysts were collectively estimating a higher figure of $4.88 billion.
On the other hand, non-GAAP (adjusted) net income came in slightly ahead of the consensus pundit projection. It fell by 4% year over year to $1.93 per share.
All three of Kimberly-Clark’s business segments suffered declines in net sales. International personal care, the No. 2 in terms of total sales, saw a nearly 9% year-over-year slide in the quarter to $1.4 million. The No. 1, North America, declined by nearly 4% to $2.7 billion.
No investor likes a guidance cut
Compounding that, Kimberly-Clark cut its full-year guidance. It now believes adjusted earnings per share will be flat to slightly positive over the 2024 result, on the back of an anticipated $300 million in additional costs arising from the current international trade disputes.
Previously it was expecting profitability to rise by at least a mid-single-digit percentage rate.
Personally, I feel as if the current situation with trade is becoming something of an excuse for some underperforming companies. Kimberly-Clark isn’t showing much vibrancy in any of its business, and it seems as if the company needs more than a calm trade environment to get its growth engine restarted.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
