Replies to post #76 on The Global Demographic Tailwind

[DewDiligence]

KMB 4Q09 Results, 2010 Outlook Miss Street’s Estimates

[Modestly priced consumer-staples companies who are direct beneficiaries of TGDT are looking better these days relative to such riskier holdings as mining and energy stocks, IMO.]

http://www.reuters.com/article/idAFN2215202420100122

›Jan 22 2010 10:48 am ET
By Jessica Wohl

CHICAGO, Jan 22 (Reuters) - Kimberly-Clark Corp <KMB.N> posted a lower-than-expected quarterly profit and gave a disappointing 2010 forecast as consumers' preference for cheaper items pressured margins on its paper goods.

The maker of Kleenex tissues and Huggies diapers is planning for a "slow and modest" economic recovery in 2010, Chief Executive Officer Thomas Falk said in a statement.

Sales topped expectations, and shares of Kimberly-Clark, whose results kicked off the earnings season for U.S. household products makers, recovered a bit after falling 1.8 percent.

Margins, however, came in lower than analysts expected.

"We think spending and brutal performance in consumer tissue drove the weakness in margins," said JPMorgan analyst John Faucher. Gross margin was 33.4 percent, below his estimate for 34.7 percent.

Consumer tissue product sales in North America fell nearly 6 percent, with a double-digit drop in volume for paper towels such as Scott and Viva. Operating profit in the consumer tissue unit, which includes tissues, paper towels and toilet paper, plunged 18.1 percent.

"There seems to be a lot more promotion in this sector than I think I expected," Fitch Ratings Director Grace Barnett said. "I hope they are not going to get crazy here."

Kimberly-Clark competes with Procter & Gamble Co <PG.N>, whose paper products brands include Bounty, Charmin and Puffs.

Still, Barnett does not expect the pressure to pose as big of a threat to P&G, which will report its results next week.

"Procter has so many other sectors that the paper side or the tissue side is important, but it is much less relevant to their overall results than say for Kimberly," she said.

Kimberly-Clark shares were down 0.5 percent at $60.83 in morning trading, while P&G rose 1 percent to $60.41.

OUTLOOK BELOW EXPECTATIONS

Kimberly-Clark said fourth-quarter profit rose to $492 million, or $1.17 per share, from $419 million, or $1.01 per share, a year earlier.

Analysts on average expected $1.25 per share, according to Thomson Reuters I/B/E/S.

Sales rose 8.4 percent to $4.98 billion, beating Wall Street expectations of $4.92 billion, while the volume of goods sold rose about 2 percent. The acquisitions of I-Flow Corp and Jackson Safety added a percentage point of sales growth.

One bright spot was sales of healthcare products such as gloves and face masks, which jumped 22.1 percent as people try to protect against the H1N1, or swine flu, virus. The unit has done well recently, but is still the company's smallest.

Kimberly-Clark forecast 2010 earnings of $4.80 to $5.00 per share, compared with analysts' estimates of $5.14. The company expects sales to rise 5 percent to 6 percent, with volume up 2 percent to 3 percent.

Kimberly-Clark said it would resume share repurchases this quarter, with a goal of $500 million to $600 million in buybacks in 2010. It also expects its board to approve a high single-digit to low double-digit percentage increase in its dividend.

The company is still evaluating the rate it will use to translate its sales in Venezuela into U.S. dollars after the bolivar devaluation earlier this month. [ID:nN11158065] About 3 percent of its 2009 sales came from that country.

Kimberly-Clark expects to take a one-time charge of 14 cents to 22 cents per share in the first quarter for the currency issue, but does not expect the devaluation to materially affect 2010 earnings.

The company stood by its annual goals of 3 percent to 5 percent net sales growth and mid-to-high single-digit increases in earnings per share. It will detail more of its plans in March.‹

[DewDiligence]

Kimberly-Clark Introduces Depend Underwear in Colors and Prints

http://finance.yahoo.com/news/KimberlyClark-Introduces-New-prnews-924882068.html?x=0&.v=1

›Male and female variety packs provide an unprecedented, underwear-like experience for millions of Americans managing incontinence

March 9, 2010, 8:15 am EST

DALLAS, March 9 /PRNewswire-FirstCall/ -- For approximately 38 million Americans who will experience some form of incontinence this year(1), protection, discretion and normalcy remain of the utmost importance when selecting a product solution. Today, most absorbent garments are not seen as very underwear-like, and consumers have a strong desire for products that provide greater normalcy. Responding to this growing need, Kimberly-Clark Corporation (NYSE:KMB - News) today announced that beginning in April 2010, it will begin offering its market-leading Depend Underwear for Men and Depend Underwear for Women products in new colors and prints.

The new offering, available in male and female-specific variety packs, will provide the same level of superior fit and protection the Depend brand is known for, but with an assortment of colors and prints along with a new finished waistband – now providing users with a more underwear-like experience to help them maintain a normal, active lifestyle.

"Our consumer's desired experience is to stay in their own underwear. Therefore, we want to make our Depend products as much like underwear as possible," said Andrew Meurer, vice president of Kimberly-Clark North American feminine and adult care brands. "The introduction of new Depend Underwear in Colors and Prints builds on our brand's commitment to our users by providing the superior protection the Depend brand is known for in a product form that is much more like underwear."

Each variety pack comes with six pairs of colored and printed underwear, ranging from solid and striped masculine patterns for men, to pastel solid and floral, feminine patterns for women. Additionally, the line debuts new packaging that is distinctly different from the traditional packaging found within the category. A transparent product window showcases the prints and colors, creating a discreet product that resembles a multi-pack of traditional underwear normally found in the intimates section.

"Our shopper insights show that men and women often experience significant anxiety and stress when shopping for these products, predominately due to the stigma that continues to exist with incontinence," added Meurer. "Our innovative new packaging looks just like a package of underwear. It is a significant step towards delivering a more underwear-like product and a more dignified shopping experience."

Providing a Fashion-Forward Solution to an Aging Population

The aging U.S. population, including the 78 million Baby Boomers who are rapidly approaching their senior years, have increasingly high expectations for the products they purchase. And as these Boomers continue to age, they are becoming progressively more susceptible to the conditions that commonly cause incontinence – including diabetes, Benign Prostatic Hyperplasia (BPH), prostate cancer, Alzheimer's, hysterectomies, neurologic diseases and other chronic conditions.

"Boomers' expectations for products they purchase are infinitely greater than those of past generations," said Mark Cammarota, Depend brand director. "This group of consumers has enjoyed products created specifically to suit their unique style and preferences. As they begin to personally engage with the Depend brand for the first time, we've responded by introducing a line of more fashionable, underwear-like products."

"As we've talked to women who buy our products, they tell us that they want to feel feminine and attractive," Cammarota added. "For some women, white absorbent products simply do not deliver the normalcy of underwear that they desire. This new lineup affords women fashionable options and an opportunity to maintain confidence and experience a more normal lifestyle."

Unlike women, men often enter the category as a result of prostate health issues and are not eased into using adult incontinence products like their female counterparts. Men consider incontinence products to be unisex, bland and institutional; however, the introduction of Depend Underwear for Men with colors, prints and a finished waistband gives men the ability to maintain normalcy with a solution that looks and fits more like the regular underwear briefs they are used to wearing.

Coming in April

This April, Depend Underwear for Men and Depend Underwear for Women in Colors and Prints will begin rolling out across North America in four sizes. For women, the new offering will be available in Extra absorbency in Small/Medium and Large sizes. Male products will be available in Small/Medium or Large/Extra Large in Super Plus absorbency.

Also beginning in April, the Depend brand will roll out a comprehensive integrated marketing campaign to support the product's availability on store shelves featuring television, print and online advertising, direct mail, special coupon offers and more.

The Depend brand is the number one brand in the approximately $1.3 billion adult incontinence category in North America. For more information on Depend Underwear for Men and Depend Underwear for Women in Colors and Prints, visit www.Depend.com.

About Kimberly-Clark

Kimberly-Clark and its well-known global brands are an indispensable part of life for people in more than 150 countries. Every day, 1.3 billion people - nearly a quarter of the world's population - trust K-C brands and the solutions they provide to enhance their health, hygiene and well-being. With brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend, Kimberly-Clark holds No. 1 or No. 2 share positions in more than 80 countries. To keep up with the latest K-C news and to learn more about the company's 138-year history of innovation, visit www.kimberly-clark.com.‹

[DewDiligence]

Kimberly-Clark Promises Cost Cuts, Dividend Hikes

[Example of the kinds of premium-margin products KMB plans to bring to market are Depend adult diapers packaged to look like regular underwear on the store shelf (#msg-47619675) and toddler diapers designed to look like a pair of jeans. (KBM turned the new Depend product into a sick joke at the Investor Day presentation this week: #msg-48121544.)

Note the emphasis on The Global Demographic Tailwind in the second-to-last paragraph below. This theme pervaded the Investor Day presentation to a degree that rivaled any company I’ve followed.]

http://finance.yahoo.com/news/KimberlyClark-backs-outlook-apf-2662836925.html?x=0&.v=8

›March 22, 2010, 10:37 am EDT

NEW YORK (AP) -- The maker of Kleenex and Huggies reiterated its full-year adjusted profit forecast and expects to save more money through cost-cutting than initially anticipated. Shares climbed $1.44, or 2.3 percent, to $62.87 in morning trading. Over the past year, the stock has traded in a range of $45.19 to $67.03.

Kimberly-Clark Corp. said Monday that it still sees 2010 adjusted earnings between $4.80 and $5 per share. That excludes an expected charge for the reworking of its local currency balance sheet in Venezuela to account for the country's currency devaluation.

Analysts polled by Thomson Reuters, whose estimates generally remove one-time items, predict a profit of $4.87 per share.

The consumer products maker also said its cost reduction program will likely result in savings of $400 million to $450 million for 2008 through 2010. It previously anticipated savings of $350 million to $450 million. A new three-year plan predicts an additional $400 million to $500 million in savings for 2011 to 2013.

The announcements came as part of Kimberly-Clark's investor day meeting in New York on Monday.

The company, based in Dallas, has weathered the recession well, according to some analysts, by guarding its profits through price increases that helped buffer rising costs for key components like pulp.

Chairman and CEO Thomas J. Falk said in a statement that Kimberly-Clark will still pour money into supporting its brands, as well as continue to focus on trimming costs in the future.

"We will continuously improve the effectiveness and efficiency of our organization as we create a leaner, stronger and faster company," he said.

Long term, Kimberly-Clark expects earnings-per-share growth in the mid- to high-single digits through 2015 and a sales increase of 3 percent to 5 percent.

The consumer products maker also plans to roll out several new and updated products during the first half of the year, including a disposable Kleenex hand towel [already available in stores], improved Cottonelle bathroom tissue and Viva paper towels, and new Poise and Depend products.

Kimberly-Clark will also spend more on research and development that will concentrate on producing more innovative products, improving margins, providing a better mix of products and expanding its brands.

The efforts will help Kimberly-Clark remain competitive against rivals such as Procter & Gamble Co., which is pouring more money into its tissue promotions and launching a new diaper line. Procter & Gamble's products include Pampers diapers and Gillette shavers.

Overseas will remain a key focus for Kimberly-Clark, with the company emphasizing high-potential, fast-growing markets like China, Russia and Latin America.

The consumer products maker also said it will maintain a "top-tier dividend payout." Kimberly-Clark expects its dividend increases to be in line with its long-term earnings-per-share growth forecast. The company said in January that it expects a high single-digit to low double-digit increase in its 2010 dividend.‹