Kimberly-Clark reveals new products that boost the company’s earnings
Yahoo Finance Live’s Brian Sozzi provides his take on Kimberly-Clark's latest slate of product offerings.
JULIE HYMAN: Kimberly-Clark posted disappointing results in its latest earnings. The company, though, did reveal a new few new products, and the CEO promised one category in particular would be, quote, "mind blowing." This category caught the attention of Brian Sozzi. That's where we find his take today. Now this was-- the company reported yesterday, but you went through the call and pinpointed some key phrases.
BRIAN SOZZI: Yeah, I don't want to flush this quarter down from Kimberly-Clark. I wanted to dig in here and see what would flow to investors. And what he ultimately-- Mike, who is the new CEO-- or I would say new, hired in 2019, was the former COO-- talked about in this earnings call, mind blowing new poop product. Now I emailed Mike this morning for comment on what this might be, what it might look like. Is it potpourri? Unclear what it is. But at some point, this product is coming out from Kimberly-Clark later in the year. Mike did not return my email request for comment, but I look forward to seeing it.
But this ultimately sent me down the rabbit-- just the rabbit tat of what other products does this company have coming in the event maybe investors are just throwing this one out with the baby with the bathwater and is some type of innovation-led turnaround at Kimberly-Clark. A couple of new products that caught my attention from this earnings call that I would call as innovative, and even though I don't use many of them or any of them. The first is the Kotex Dreamwear for--
JULIE HYMAN: You don't use these?
BRIAN SOZZI: --ultimate overnight protection. No, I do not use that. If I did, well, that's a discussion for a different day. You have the Kleenex Allergy Comfort, not photo'ed there. All seem innovative to me. Also, they talked at length on the conference call about the Huggies Super Deluxe Diaper in China, which Kimberly-Clark says it's the softest diaper in China-- pretty good. A couple other products, too, as you go through that earnings call, which you can read this stuff, the new Poise Ultra Thin, new product from Kimberly-Clark maybe driving some sales, and the Goodnites Youth Pant, Julie, which was interesting. Mike saying this could hold up to three bottles of water.
JULIE HYMAN: Why is it interesting for me? It's more interesting for one of our producers, Pam Granda, who has an infant.
BRIAN SOZZI: Gotcha.
JULIE HYMAN: And of course, nighttime leakage is a concern--
BRIAN SOZZI: Well, there you go.
JULIE HYMAN: --when you have a baby. You don't want them waking up in a wet bed.
BRIAN SOZZI: Well, I just showed the hand of my life, 40 year old with no kid, so I barely know what a Goodnite's Youth Pant is. But the fact they can hold three bottles of water, certainly, it seems pretty exciting to me. Now let's go through a couple of points here because, of course, when you're looking to buy a consumer staple stock like a Kimberly-Clark, you have to think of other things besides Kotex Ultrathin Pads. You have to think about inflation, and can this company pass through prior price increases?
And I think that was a big concern amongst the analyst community coming off this call, Deutsche Bank out this morning maintaining a sell rating on them. Is inflation coming down fast enough? So I just walk you through this, what could be a trade on Kimberly-Clark maybe at some point. Product innovation very important, but also, that ultimately gives them the opportunity to raise prices. If you are raising prices and inflation is cooling, that equals better profits, which we did start to see a little bit from K and B in the most recent quarter. So that's a good thing.
Retailer inventory levels appear to be back in line for K and B. That is also a positive thing. And again, hat tip to CEO Mike, who I have not talked to him in a little while. But he was the former CEO of Kimberly-Clark. And he has led the company, I would say, successfully through the pandemic when we all needed these products, couldn't find them in the stores.
What better-- who else better to be running a company during a pandemic than a guy that was the CEO of a company he helped engineer a lot of their supply chain efforts? My take is this on a company like Kimberly-Clark-- messy category, but nicely profitable for K and B. And there I am holding-- I don't think that's the new poop product here, guys, from Kimberly-Clark, but I'm excited to see what they have coming to market later this year. And maybe it will help lift their margins. But Mike, get back at me. I'm very curious what this is.
JULIE HYMAN: Maybe they're going to make a bidet.
BRAD SMITH: Maybe.
BRIAN SOZZI: They'll be wiping up a few quarters.
BRAD SMITH: A messy category, but prioritizing cleanliness and hygiene. Guys--
BRIAN SOZZI: Sounds good to me.
BRAD SMITH: Yes.