This company, primarily a manufacturer and marketer of diapers, wipers, youth pants, and consumer tissues, has been grouped into consumer tissues sector in personal care industry.
It seems that demand for consumer tissue products of companies in this sector has been weak since 2015 as indicated by continuing decrease in both sales volume and price for the typical companies ( sales volume growth rate in 2017 and 2016 : -1.5% and -1%). The demand, as reflected by first quarter sales of companies, seems to bounce back again after entering 2018.
Sales decline has resulted in increasing pressure on margins according to some typical company’s data. The typical companies’ gross margin is about 25% in 2017. With a about 13% SG&A as percentage of sales, the typical operating margin went down to about 13% in 2017.
The typical average stock price/cash flow ratio is about 26.
It seems that demand for personal care products (diaper and wipers) of this company has been strong and growing in the past several years as indicated by the continuing increase in sales volume. The demand its consumer tissues products have been flat in 2016 and 2017 but took off in the first quarter of 2018.
The first three months fiscal 2018 compared with the same period of 2017
Organic sales increased 2% primarily due to increase in volume of 3% offset by decrease 1% in price.
Organic sales (consumer tissues) increased 5% primarily due to increase of 7% in volume offset by decrease 2% in product mix.
The fiscal 2017 compared with the 2016
Organic sales were flat primarily due to decrease 1% in price offset by increase of 1% in volume.
Organic sales (consumer tissues) decreased 1% primarily due to decrease of 1% in product price.
The fiscal 2016 compared with 2015
Organic sales increased 2% primarily due to increase of 2% in volume.
Organic sales (consumer tissues) decreased 1% primarily due to decrease of 1% in product mix.
Fiscal 2015 compared with 2014
Organic sales increased 5% primarily due to increase of 4% in volume.
Organic sales (consumer tissues) increased 1% primarily due to increase of 3% in volume offset by decrease of 2% in price and product mix.
Its gross margin has basically no changes still around 34% in 2017 due to combined impact from increased sale volume and decreased price. With its flat SG&A as percentage of sales (about 19%), its operating margin is still at around 15% in 2017.
Stock performance
This stock currently has a stock price/cash flow ratio of 22. We think that its stock is being relatively fairly valued compared with its peers.
