Kimberly-Clark Fixates on the Long Term Despite Near-Term Angst; Shares Fail to Offer Much Value

While narrow-moat Kimberly-Clark posted a fair end to the fiscal year (with 5% organic sales growth and 270 basis points of gross margin gain to 32.8%), the firm struck a cautious tone on its prognosis for fiscal 2023. For one, it anticipates costs will remain elevated, forecasting incremental headwinds amount to $200 million-$300 million this year, on top of a $3.0 billion step up over the past two years. In addition, Kimberly is battling unfavorable foreign currency movements, which stand to eat into operating income to the tune of $300 million-$400 million. We don’t believe the firm is sitting still, with additional price hikes slated in the coming months combined with its continued pursuit of inefficiencies to unlock additional savings.