Kimberly-Clark tops quarterly profit estimates on cost cuts, essential products demand

Jan 27 (Reuters) - Kimberly-Clark KMB.N exceeded quarterly profit expectations on Tuesday, helped by cost controls and steady demand for its products including Huggies diapers and Kleenex tissues.

The Dallas-based company has cut jobs and sold low-margin and non-essential businesses such as its private-label diaper and personal protective equipment segments in recent months.

That has shielded margins as Kimberly-Clark expands its affordable ranges and offers lower-priced products that still carry premium features to attract cost-conscious customers and fight competition.

Prices declined 1.1% while organic sales rose 2.1% in the fourth quarter, driven by a 2.7% growth in overall volumes as consumers stocked up on essential products such as surface cleaning agents, disinfectants and paper napkins at warehouse-style club stores that sell larger, value packs.

The company, which had previously warned that steep U.S. import duties, especially on Chinese goods, would hit profitability, posted an adjusted gross margin of 37%, in line with the prior year.

Adjusted earnings per share of $1.86 were above analysts' estimates of $1.81, according to data compiled by LSEG.

Net sales for the quarter ended December 30 totaled $4.08 billion, slightly shy of expectations of $4.09 billion.

Consumer goods bellwether Procter & Gamble PG.N also exceeded quarterly earnings expectations last week, despite revenue slightly being short of expectations.

Kimberly-Clark expects 2026 organic sales to be in line with or ahead of the roughly 2% average growth seen across the categories and markets it competes in.

It expects adjusted profit per share to grow at a double-digit rate, with margins expanding as it improves efficiencies.

The company has proposed buying Tylenol maker Kenvue KVUE.N for more than $40 billion to create a global consumer health company, with the deal expected to close by year-end.

(Reporting by Neil J Kanatt, Savyata Mishra in Bengaluru and Jessica DiNapoli in New York; Editing by Devika Syamnath)

((Neil.JKanatt@thomsonreuters.com))