Kimberly-Clark (NYSE:KMB) shares are climbing today following the unveiling of a new operating model by the company, known for brands like Kleenex and Huggies. The model targets long-term growth through a strategic emphasis on accelerating innovation, optimizing margins, and focused execution.
Focus on Growth and Efficiency
The company aims to grow 12 major brands that hold top positions in their respective categories and boost 80% of net sales in five categories with a combined addressable market of $240 billion. The focus areas include Baby & Child Care, Feminine Care, Adult Care, Family Care, and Professional segments.
Furthermore, Kimberly-Clark is leveraging technology and data analytics to enhance its supply chain and drive margin improvements. This initiative targets achieving more than $3 billion in gross productivity gains and $500 million in working capital savings.
Over the upcoming months, Kimberly-Clark plans to restructure its operations into three business segments: North America, International Personal Care (IPC), and International Family Care and Professional (IFP). This transition, scheduled for completion by year-end, is expected to generate SG&A savings of approximately $200 million in the following years.
Interestingly, KMB’s goal is to achieve 100% natural forest-free product offerings. By 2030, the company anticipates being more than halfway towards this objective.
Long-Term Outlook
In the long term, KMB is aiming to grow its adjusted operating profit and adjusted EPS in the mid-to-high single digits. For 2024, KMB anticipates organic net sales growth in the low-to-mid single digits. Adjusted EPS for the year is seen increasing in the high single digits. At the same time, KMB expects to incur $1.5 billion in restructuring and reorganization charges over the next three years.
What Is the Price Target for KMB?
KMB’s stock price has inched up by nearly 5% so far this year. Overall, the Street has a Hold consensus rating on Kimberly-Clark alongside an average KMB price target of $124.60.
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