Kimberly-Clark Withdraws FY20 Outlook; Suspends Share Buyback Program

(RTTNews) - While reporting its financial results for the first quarter on Wednesday, Kimberly-Clark Corp. (KMB) said it is withdrawing its previous guidance for fiscal 2020 and not providing any additional outlook at this time.

The company the rapidly evolving situation and the high degree of uncertainty related to the duration and potential impacts of COVID-19 and the overall environment as reasons for withdrawing its outlook. The company previously issued its full-year 2020 outlook on January 23, 2020.

Kimberly-Clark also said it is temporarily suspending its share repurchase program effective April 24, 2020, for at least the remainder of the second quarter to enhance flexibility in the current environment. The company will continue to monitor the environment and further assess its share repurchase program later in the year.

In January 2018, Kimberly-Clark initiated the 2018 Global Restructuring Program in order to reduce the company's structural cost base and enhance its flexibility to invest in its brands, growth initiatives and capabilities critical to delivering future growth. As part of the program, the company expects to exit or divest some low-margin businesses that generate about 1 percent of company net sales.

As a result of the outbreak of COVID-19 and the related uncertainty, Kimberly-Clark now expects that some restructuring activity and the related charges will extend into 2021 rather than being completed at the end of 2020 as previously planned.

The company expects total restructuring charges to implement the program to be toward the high end of the previously estimated range of $1,700 million to $1,900 million pre-tax, or $1,300 million to $1,400 million after tax. The company continues to expect the program will generate annual pre-tax cost savings of $500 million to $550 million.

Kimberly-Clark continues to expect to achieve those savings by the end of 2021, but noted it is possible the full realization could occur in 2022 because of the uncertainties related to COVID-19.