Coverage: Kimberly-Clark replaces its CEO after disappointing earnings
Michael Hsu will succeed Thomas Falk as chief executive officer of Irving, Texas-based consumer products company Kimberly-Clark, the company announced Monday as it also reported disappointing earnings.
Maria Halkias of the Dallas Morning News had the story:
Falk, 60, who has been CEO since 2002 and chairman since 2003, will become executive chairman of the board of the company that makes Kleenex, Huggies, Pull-ups, Depends, Scott, Viva and other well-known brands.
Hsu, 54, joined Kimberly-Clark in 2012, and has been a career consumer products executive, working with some of the most well-known American brands.
At Kraft Foods, Hsu was executive vice president and chief commercial officer. Previously at H.J. Heinz he was vice president of marketing for Ore-Ida and frozen meals.
Hsu, who takes over Jan. 1, has been on a succession path at Kimberly-Clark, which posted revenue of $18.2 billion last year. He’s been president and chief operating officer since January 2017. Prior to that, he led Kimberly-Clark’s $8 billion North American division.
Kimberly Chin of MarketWatch.com focused on the company’s earnings:
The company also said on Monday profit and sales fell in the third quarter as the maker of Huggies diapers and Kleenex tissues said it was still grappling with higher commodity costs and weakening foreign currency pressures.
Kimberly-Clark reported profit fell 20% to $451 million, or $1.29 a share, from a year earlier. Excluding special items, it reported earnings of $1.71 a share though, topping analysts’ expectations of $1.63 a share, according to a Refinitiv poll.
Sales also fell 2% to $4.58 billion from the same period a year ago, compared with the $4.53 billion forecast of analysts polled by Refinitiv. Excluding foreign exchange rates, organic sales rose by 1% due to adjustments in prices and product mix. In North America, organic sales rose 3%.
The Dallas-based company said it would further cut its earnings guidance for the full year. It expects to earn between $3.29 and $3.79 a share, compared with $3.37 and $3.87 a share as previously guided. It maintained its organic sales growth target of about 1%.
Alistair Gray of the Financial Times reported that the CEO change is in the midst of a corporate restructuring:
The change at the top comes at a time when the consumer goods industry is under pressure from rapidly changing tastes, intense competition and rising costs. Earlier this year, the company said it would cut at least 5,000 jobs as part of plans to reduce expenses by as much as $550m.
Mr Falk led the spin off of Kimberly-Clark’s US-based healthcare business in 2014. Its shares have approximately doubled during his tenure, giving the company a market capitalisation of $38bn.
More recently, however, the company has been hurt by factors from the rise of ecommerce to higher commodity costs. A declining birth rate, which has reduced demand for nappies, has added to the pressure. Shares have lost 11 per cent this year.