Can Kimberly-Clark's Innovation Pipeline Power Its Next Growth Phase?

Kimberly-Clark Corporation KMB continues to focus on delivering science-backed innovation and compelling value propositions across its global markets. The company is using a proven and repeatable playbook to develop and scale these initiatives around the world. By combining differentiated innovation with strong consumer value, Kimberly-Clark believes it can continue winning with consumers across its markets.

Kimberly-Clark expressed strong confidence in its innovation pipeline, with management believing the personal care innovations planned over the next three years will be better than those launched over the previous decade. The company is also advancing an alternative natural fiber innovation program for its tissue business, which management believes has the potential to reshape the category.

In addition, the company continues to see encouraging momentum in its tissue business, driven by stronger value propositions, ongoing innovation and brand-building initiatives. Kleenex has consistently gained market share over the past several years, reflecting the brand's continued positive momentum. The company is also developing new format innovations informed by consumer insights and specific usage occasions.

Looking ahead, Kimberly-Clark has additional tissue innovations planned for next year and the year following, alongside its alternative natural fiber initiative. Management remains highly confident in the innovation program and sees a strong pipeline of products and innovations taking shape over the coming years.

Overall, Kimberly-Clark views differentiated product technologies as the anchor of its superior value proposition and believes its innovation pipeline can help it continue winning with consumers across markets while supporting its long-term growth trajectory.

The Zacks Rundown for KMB

Shares of this Zacks Rank #3 (Hold) company have gained 10.7% in the past three months compared with the industry’s growth of 6.1%.

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From a valuation standpoint, KMB trades at a forward price-to-earnings ratio of 14.48, lower than the industry’s average of 18.76.

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The Zacks Consensus Estimate for KMB’s current fiscal-year earnings implies a year-over-year decline of 1.5%, and the same for next fiscal year earnings implies growth of 1.7%.

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Stocks to Consider

Some better-ranked stocks have been discussed below:

WD-40 Company WDFC engages in the provision of maintenance products and homecare and cleaning products in North America, Central and South America, Asia, Australia, Europe, India, the Middle East, and Africa. At present, WDFC carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for WDFC’s current fiscal-year sales and earnings suggests growth of 9.9% and 7.2%, respectively, from the year-ago reported figures. WDFC reported a trailing four-quarter average earnings surprise of 18.3%.

Purple Innovation, Inc. PRPL designs, manufactures, and sells sleep and other products in the United States and internationally. PRPL currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for PRPL's current fiscal-year sales and earnings implies growth of 0.4% and 20.8%, respectively, from the year-ago actuals. PRPL delivered a trailing four-quarter earnings surprise of 21.3%, on average.

Ryohin Keikaku Co., Ltd. RYKKY engages in the retail of household goods and food items in Japan and internationally. RYKKY currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for RYKKY's current fiscal-year sales and earnings implies growth of 9.5% and 13.9%, respectively, from the year-ago actuals.  

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This article originally published on Zacks Investment Research (zacks.com).

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