Kimberly-Clark Corporation's Q3 2023 sales of $5.1 billion increased 2%, with organic sales up 5%, driven by a 5% increase in price from ongoing revenue growth management programs and a 1% favorable product mix, offset by a 1% decrease in volume. Changes in foreign currency exchange rates decreased sales by approximately 2% and the divestiture of its tissue and K-C Professional business in Brazil decreased sales by approximately 1%.
Gross margin improved by 530 bps to 35.8%, with higher net revenue realization, cost savings and favorable input costs partially offset by unfavorable currency impacts and other manufacturing costs.
Q3 2023 operating profit was $774 million compared to $655 million last year, resulting in an operating margin of 15.1%. Operating profit increased by 18%, driven by higher gross profit including $90 million in FORCE (Focus on Reducing Costs Everywhere) savings and $75 million in lower input costs, partially offset by other manufacturing costs of $30 million, planned increases in marketing, research and general expenses, coupled with higher incentive compensation levels. Unfavorable currency effects impacted operating profit by $135 million during the quarter.
Net interest expense was $56 million, 19% lower than prior year.
Year-To-Date Results
For the first nine months of the year, sales of $15.5 billion increased 2%. Changes in foreign currency exchange rates decreased sales by 3%, and the exit of our tissue and K-C Professional business in Brazil decreased sales slightly.
Gross margin improved by 400 basis points to 34.2%, and adjusted gross margin improved by 410 basis points to 34.3% with higher net revenue realization as well as cost savings from its FORCE program of $275 million more than offsetting higher input costs of $115 million and higher other manufacturing costs of $195 million.
Year-to-date operating profit was $1.7 billion in 2023 versus $2.0 billion in 2022. Results included non-cash impairment charges on intangible assets, higher marketing, research and general expenses, unfavorable impact from foreign currency, offset by the net benefit from the Brazil divestiture in the Q2 2023.
Year-to-date adjusted operating profit was $2.3 billion in 2023 versus $1.9 billion in 2022. The increases from organic sales and the benefits from FORCE savings were partially offset by higher input costs and other manufacturing costs, marketing, research and general expenses, and unfavorable impact from foreign currency.
Kimberly-Clark Corporation is an American multinational personal care corporation that produces mostly paper-based consumer products.
