Kimberly-Clark Earnings: Tempering Costs Fuel Brand Investments to Support Long-Term Prospects

Kimberly-Clark sought to put to rest questions surrounding the resiliency of consumers with its solid third-quarter marks that included organic sales growth of 5%. The standout was its North American personal care arm (the product segment in aggregate represents about 50% of its business, with North America its largest geographic market, at more than 50% of sales and nearly 80% of operating profits), which chalked up 6% volume growth on a 3% benefit from higher prices and improved mix. And even if industrywide promotions step up to counteract a more precarious consumer spending backdrop, management’s rhetoric suggests a race to the bottom is unlikely given such a path would fail to drive long-term market share gains or support the intangible assets that underpin Kimberly’s narrow moat.