Kimberly-Clark Corporation (NYSE:KMB) Q1 2018 Earnings Conference Call - Final Transcript

Apr 23, 2018 • 10:00 am ET

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Kimberly-Clark Corporation (NYSE:KMB) Q1 2018 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

(Operator Instructions) Our first question comes from Lauren Lieberman with Barclays.

Executive
Thomas Falk

Hey. Good morning Lauren.

Analyst
Lauren Lieberman

Hey. Good morning. Thanks for the question. So, I wanted to just ask a little bit about pricing. So I think the sheet count reductions on Consumer Tissues is something where you should probably have very good visibility, have done it many, many times before, and the math is pretty easy to do. Thank you for that detail Mike. I was curious though on the Personal Care business, particularly in North America and in Brazil. So, one is that, in North America, I think, we have heard and we heard last week from a major competitor about things just getting a lot tougher on the private label end of the world in terms of retailers all kind of reacting to each other, let's say, and the pressure that's putting on the lower end pricing in their portfolio.

So I was wondering about your visibility on pricing on North America diapers, how much pressure there is there, and if you really think you can move things up a bit more? And then, in Brazil, some chatter about some deflation in Brazil, and it being a difficult place to get pricing, and I was wondering, to what degree that was critical to your forecast? Thank you.

Executive
Thomas Falk

I'll let Mike elaborate on it, and I guess, I'd say just kind of broadly, as you look at private label shares in North America, they really haven't moved around a lot. Our estimated first quarter private label market share for diapers in North America is about the same as the full year average last year, and actually, down slightly from fourth quarter. So maybe we have a little bit different view of it than others might, but I don't know Mike, do you want to add anything else to that, other than comment on Brazil and what's going on with pricing there?

Executive
Michael Hsu

Yes. I think, Lauren, diapers specifically I think was maybe up 0.5 share point in the quarter in North America. I think, maybe the opportunity for us is, we are evaluating some count reductions on diapers and then, the other lever for us in pricing in North America would be fine tuning our trade promotion plans. So, there is always an opportunity for us to adjust our frequency and our depth, and that's what we are evaluating right now. With regard to Brazil, we had a good start to the year in Brazil. Sales and volume and share were all up pretty good. I will say, we are taking pricing and have taken pricing in Brazil and that feels like that has gone through and the market has responded accordingly.

Analyst
Lauren Lieberman

Okay. And in North America, the frequency and depth, I mean, is that something that you are seeing competitors move to, what's the retailer receptivity to that? Because it feels like if anything, retailers are looking at diapers as -- whether you want to go as far as calling