08:49 AM EDT, 03/27/2024 (MT Newswires) -- Kimberly-Clark ( KMB ) plans to optimize its margin and simplify operations in the coming months, as the company moves ahead with its bid to drive growth and reduce costs while laying out updated long-term financial targets.

Ahead of its investor day on Wednesday, the maker of consumer goods such as Kleenex tissues said it aims to reorganize its operations into three business segments; North America, international personal care and international family care and professional. The reorganization, which is expected to be complete by the end of 2024, is set to save the company about $200 million in the next few years.

Kimberly-Clark ( KMB ) plans to overhaul its supply chain, which it anticipates will generate more than $3 billion in gross productivity and about $500 million in working capital savings. The company will also focus on the 12 brands that drive more than 80% of its sales in core segments including baby and child, feminine, adult, family and professional.

"We are building on the consumer centricity and commercial advantages we've established by moving to a more agile and focused operating structure that we are confident will help accelerate our proprietary pipeline of innovation in right-to-win spaces and improve our growth trajectory, profitability, and returns on investment," Chief Executive Mike Hsu said in a statement.

The reorganization plan is estimated to result in a one-time charge of roughly $1.5 billion over three years, according to the company. The costs will be split between non-cash charges and cash expenses.

Over the long term, Kimberly-Clark ( KMB ) is targeting mid-to-high-single-digit growth for per-share adjusted earnings on a constant currency basis, as well as organic sales growth ahead of the broader market. It aims to generate annual free cash flow of at least $2 billion.

In a note earlier this week, UBS analysts led by Peter Grom said the stock is still likely a "show me" story. Shares are up 3.8% so far this year, underperforming the 9.1% gain in the benchmark Standard & Poor's 500. Shares of Kimberly-Clark ( KMB ) were up 1.5% in premarket trading.

"KMB has delivered organic growth in the +(mid-single-digit) range 4 out of the last 5 years, but this has been entirely driven by price," the UBS analysts wrote. "And with concerns on pricing looking ahead, we think investors are looking for greater conviction that the recent sequential improvement in volume performance can continue."

The company reiterated the outlook it provided in January for its 2024 fiscal year. Kimberly-Clark ( KMB ) foresees organic sales growing by a low- to mid-single-digit percentage, while adjusted EPS are pegged to rise at a high-single-digit rate.

Price: 127.99, Change: +1.9, Percent Change: +1.51