Research Update: Kimberly-Clark Corp. 'A' Rating Affirmed; Outlook Remains Negative

U.S.-based Kimberly-Clark Corp. has underperformed our profit and credit measure expectations due to higher-than- expected inflation and modestly lower volumes. S&P Global Ratings-adjusted leverage as of Sept. 30, 2022, was 2.6x, about 0.2x above our prior expectations. We nevertheless believe that profitability and credit metrics are set to rebound as pricing exceeds inflation and currency headwinds, retailer and consumer inventories have come down, and the company exercises prudence with respect to shareholder renumeration. We affirmed all our ratings on the household and personal care company, including our 'A' long-term and 'A-1' short-term issuer credit ratings. The negative outlook reflects the potential for a lower rating over the next year if we project Kimberly-Clark will not meet our forecast including reducing

...- U.S.-based Kimberly-Clark Corp. has underperformed our profit and credit measure expectations due to higher-than- expected inflation and modestly lower volumes. S&P Global Ratings-adjusted leverage as of Sept. 30, 2022, was 2.6x, about 0.2x above our prior expectations. - We nevertheless believe that profitability and credit metrics are set to rebound as pricing exceeds inflation and currency headwinds, retailer and consumer inventories have come down, and the company exercises prudence with respect to shareholder renumeration. - We affirmed all our ratings on the household and personal care company, including our 'A' long-term and 'A-1' short-term issuer credit ratings. - The negative outlook reflects the potential for a lower rating over the next year if we project Kimberly-Clark will not meet our forecast including reducing adjusted leverage to the low-2x area by fiscal year-end 2023, or if we believe its competitive position has deteriorated....

Research Update