DALLAS, Oct. 25, 2021 -- Kimberly-Clark Corporation (NYSE: KMB) today reported third quarter 2021 results.
- Third quarter 2021 net sales of $5.0 billion increased 7 percent compared to the year-ago period, with an organic sales increase of 4 percent.
- Diluted net income per share for the third quarter was $1.39 in 2021 and $1.38 in 2020.
- Third quarter adjusted earnings per share were $1.62 in 2021 compared to $1.72 in 2020. Adjusted earnings per share exclude certain items described later in this news release.
- Diluted net income per share for 2021 is anticipated to be $5.15 to $5.60.
- The company is now targeting full-year 2021 organic sales decline of 1 to 2 percent and adjusted earnings per share of $6.05 to $6.25. The prior outlook was for organic sales decline of 0 to 2 percent and adjusted earnings per share of $6.65 to $6.90. The updated earnings outlook reflects significantly higher input cost inflation.
Chairman and Chief Executive Officer Mike Hsu said, "Our third quarter results reflect a dynamic and challenging macro environment. Our organic sales were strong, including double-digit growth in a number of our personal care markets, and improving performance in tissue and our professional business. Market share performance also remained strong, demonstrating the strength of our innovation and excellent local commerical execution. Our earnings were negatively impacted by significant inflation and supply chain disruptions that increased our costs beyond what we anticipated. We are taking further action, including additional pricing and enhanced cost management, to mitigate these headwinds as it is becoming clear they are not likely to be resolved quickly."
Hsu continued, "We will continue to invest in our brands and capabilities as we navigate through this volatile and difficult macro environment. Our strategy is working, and we remain confident in our future and our ability to create long-term shareholder value."
Third Quarter 2021 Operating Results
Sales of $5.0 billion in the third quarter of 2021 increased 7 percent versus the prior year. Changes in foreign currency exchange rates increased sales 1 percent and the net impact of the Softex Indonesia acquisition and exited businesses in conjunction with the 2018 Global Restructuring Program increased sales 2 percent. Organic sales increased 4 percent as net selling prices rose 3 percent and product mix increased sales 1 percent.
In North America, organic sales increased 3 percent in consumer products and 16 percent in K-C Professional. Outside North America, organic sales were up 6 percent in developing and emerging (D&E) markets and were even with year-ago in developed markets.
Third quarter operating profit was $657 million in 2021 and $666 million in 2020. Results in both periods include charges related to the 2018 Global Restructuring Program. Third quarter adjusted operating profit was $745 million in 2021 and $806 million in 2020. Results were impacted by $480 million of higher input costs, driven by pulp and polymer-based materials, distribution and energy costs. Results benefited from organic sales growth, $115 million of cost savings from the company's FORCE (Focused On Reducing Costs Everywhere) program, $35 million of cost savings from the 2018 Global Restructuring Program and lower marketing, research and general expense.
The third quarter effective tax rate was 21.6 percent in 2021 and 20.1 percent in 2020. The third quarter adjusted effective tax rate was 20.9 percent in 2021 and 22.4 percent in 2020. Kimberly-Clark's share of net income of equity companies in the third quarter was $21 million in 2021 and $31 million in 2020.
Cash Flow and Balance Sheet
Cash provided by operations in the third quarter was $782 million in 2021 and $559 million in 2020. The increase was driven by improved working capital and lower tax payments. Capital spending for the third quarter was $235 million in 2021 and $258 million in 2020. Third quarter 2021 share repurchases were 0.4 million shares at a cost of $58 million. The company now plans for full-year repurchases of approximately $400 million, at the low end of the previous range of $400 to $450 million. Total debt was $8.9 billion at September 30, 2021 and $8.4 billion at the end of 2020.