Kimberly-Clark Reports Strong Finish to Second Year of Transformation
Kimberly-Clark Reports Strong Finish to Second Year of Transformation |
| [27-January-2026] |
2025 results show further momentum from Powering Care strategy, supporting further strategic transformation DALLAS, Jan. 27, 2026 /PRNewswire/ -- Kimberly-Clark Corporation (Nasdaq: KMB) today reported fourth quarter and full year 2025 results that reflect the momentum of its innovation-driven, volume-plus-mix led growth model. These are supported by significant efficiencies that are enabling strong reinvestment in its brands and capabilities, and generating attractive returns to its shareholders. "In 2025, we accelerated the largest transformation in Kimberly-Clark's more than 150-year history, delivering results that underscore the strength of our business and serve as a springboard for enhanced growth and continued outperformance in 2026," said Kimberly-Clark Chairman and CEO Mike Hsu. "We delivered pioneering innovation across the value spectrum, breakthrough creative storytelling that strengthened brand love, and superior execution that fueled our second consecutive year of broad-based, share gain-led volume-plus-mix growth. We've also maintained a relentless focus on cost discipline as we successfully pivot our portfolio to higher growth, higher margin personal care categories." "Acquiring Kenvue is a powerful next step in our transformation that will compound the momentum we're already delivering across Kimberly-Clark. Importantly, it will also enable us to raise the standard of care for billions of people around the world," Hsu continued. "We are making strong progress on our integration planning efforts and look forward to delivering on this unique opportunity to create generational value for Kimberly-Clark shareholders." Quarter Highlights
Fourth Quarter 2025 Results Net sales of $4.1 billion were down 0.6 percent, as organic sales growth of 2.1 percent was offset by a 2.5 percent decline primarily from the exit of the company's private label diaper business in the US. Organic sales growth was driven by volume-plus-mix growth of 3.0 percent, partially offset by price investments of 1.1 percent to enhance value propositions. Gross margin was 35.9 percent compared to 35.2 percent in the prior year, inclusive of $44 million, or approximately 110 basis points, and $68 million, or approximately 170 basis points, respectively, of charges related to the 2024 Transformation Initiative. Excluding these charges, adjusted gross margin was 37.0 percent, in line with the prior year as strong productivity savings and volume growth were offset by unfavorable pricing net of cost inflation, reflecting planned investments to improve price:value tiers across the portfolio. Operating profit was $507 million compared to $420 million in the prior year, inclusive of charges of $122 million and $136 million, respectively, for certain items that management does not believe reflect our underlying and ongoing operations. Excluding these items, adjusted operating profit was $629 million compared to $556 million, an increase of 13.1 percent driven by strong productivity savings and lower marketing, research and general expenses. Net interest expense was $54 million, broadly in line with prior year. The effective tax rate was 23.9 percent compared to 13.4 percent in the prior year. On an adjusted basis, the effective rate was 23.1 percent, compared to 26.8 percent in the prior year. The year-on-year benefit to the adjusted rate was driven primarily by a lower valuation allowance linked to improved business outlook in an enterprise market, and by the resolution of certain tax matters. Net income of equity companies was $59 million compared to $44 million in the prior year, primarily driven by favorable currency impacts. Income from discontinued operations, net of income taxes was $119 million compared to $103 million in the prior year including an impact of pre-tax separation costs of $27 million in the current year. Adjusted income from discontinued operations was $142 million compared to $103 million in the prior year, an increase of 37.9 percent primarily driven by lower depreciation and amortization expense of approximately $30 million in the current year due to discontinued operations reporting requirements along with higher net sales. Diluted EPS attributable to Kimberly-Clark were $1.50 compared to $1.34 the prior year. These amounts are inclusive of net charges of $0.36 and $0.16, respectively, for certain items that management does not believe reflect our underlying and ongoing operations. Excluding these items, adjusted EPS attributable to Kimberly-Clark increased 24.0 percent to $1.86 reflecting growth in adjusted operating profit, lower diluted shares outstanding and higher income from equity companies. Full Year 2025 Results Net sales of $16.4 billion were 2.1 percent lower than the prior year primarily due to a 2.9 percent negative impact from a combination of the PPE divestiture and the exit of the company's private label diaper business in the US, as well as a 0.9 percent negative impact from foreign currency translation. Organic sales grew 1.7 percent driven by a 2.5 percent increase in volume, partially offset by price investments of 0.9 percent, while portfolio mix was broadly in line with a year ago. Gross margin was 36.0 percent compared to 37.4 percent in the prior year, inclusive of $213 million, or approximately 130 basis points, and $144 million, or approximately 85 basis points, respectively, of charges related to the 2024 Transformation Initiative. Excluding these charges, adjusted gross margin was 37.3 percent, a decrease of 100 basis points versus the prior year as strong productivity gains were more than offset by unfavorable pricing net of cost inflation, reflecting planned investments to improve price:value tiers across the portfolio, as well as incremental tariff-related costs. Operating profit was $2.4 billion compared to $2.7 billion in the prior year, inclusive of net charges of $380 million and $27 million, respectively, for certain items that management does not believe reflect our underlying and ongoing operations. Excluding these items, adjusted operating profit was $2.7 billion, in line with the prior year as lower marketing, research and general expenses driven by efficiency gains were offset by the gross profit headwinds discussed above. Net Interest expense was $232 million compared to $222 million in the prior year primarily driven by lower interest income. The effective tax rate was 29.2 percent compared to 18.3 percent in the prior year. The increase was primarily due to incremental tax charges relating to a valuation allowance on current and prior year U.S. foreign tax credits due to provisions within the One Big Beautiful Bill Act ("OBBBA"), coupled with tax benefits recognized in the prior year for the release of an uncertain tax position reserve related to the impairment for certain Softex intangible assets. On an adjusted basis, the effective tax rate was 22.8 percent, in line with the prior year. Net income of equity companies was $196 million compared to $216 million in the prior year driven primarily by unfavorable currency impacts. Income from discontinued operations, net of income taxes was $400 million compared to $386 million in the prior year including an impact of pre-tax separation costs of $77 million in the current year. Adjusted income from discontinued operations was $467 million compared to $386 million in the prior year, an increase of 21.0 percent driven by a step-up in operating results combined with a lower effective tax rate. Depreciation and amortization expense was approximately $70 million lower in the current year due to discontinued operations reporting requirements. Diluted EPS attributable to Kimberly-Clark were $6.07 compared to $7.55 in the prior year. These amounts are inclusive of $1.46 of charges and $0.25 of net benefit, respectively, for certain items that management does not believe reflect our underlying and ongoing operations. Excluding these items, adjusted EPS attributable to Kimberly-Clark were $7.53 compared to $7.30, an increase of 3.2 percent driven primarily by lower weighted average shares outstanding and higher income from discontinued operations. Business Segment Results
North America (NA) Net sales of $2.6 billion decreased 3.0 percent in the quarter, driven by a 3.7 percent impact from the exit of the company's private label diaper business, partially offset by organic sales growth of 0.8 percent. Organic sales growth was driven by broad-based volume growth of 2.5 percent, which was partially offset by declines in price and mix. Net sales of $10.8 billion for the year were down 2.4 percent driven by a 3.9 percent impact from the exit of the company's private label diaper business, partially offset by organic sales growth of 1.8 percent. Organic sales growth was driven by volume growth of 2.6 percent, partially offset by declines in price and mix. Personal Care categories value market share were up 20 basis points for the year, with volume share up 90 basis points. Operating profit for the quarter of $580 million increased 5.5 percent versus the prior year, despite a 290 basis point headwind from divestiture and business exits, reflecting strong productivity gains and lower marketing, research and general expenses. Operating profit for the year of $2.6 billion was in line with the prior year despite a 330 basis point headwind from divestiture and business exits. Results reflect organic growth led gains, strong productivity savings and lower marketing, research and general expenses, partially offset by unfavorable pricing net of cost inflation, including tariff impacts, and supply chain related investments. International Personal Care (IPC) Net sales in the quarter of $1.4 billion increased 4.2 driven by organic sales growth of 4.5 percent. Organic sales benefitted from strong volume led growth of 3.3 percent reflecting improvements in consumer value propositions across the portfolio, and enhanced portfolio mix of 2.4 percent, partially offset by price investment of 1.2 percent. Net sales of $5.7 billion for the year decreased 0.9 percent as unfavorable currency impacts offset organic sales growth of 1.7 percent. Similar to the quarter, organic sales growth was driven by volume led growth and improved portfolio mix, partially offset by price investments. Strong volume led growth drove weighted share gains primarily in baby and child care. Operating profit for the quarter of $199 million increased 20.6 percent driven by volume and mix led gains, strong productivity savings and lower marketing, research and general expenses, partially offset by pricing investments resulting in negative pricing net of cost inflation. Operating profit for the year of $796 million decreased 3.6 percent primarily due to strong comparisons in the prior year period and incremental pricing investments, partially offset by strong productivity savings and lower marketing, research and general expenses. Cash Flow and Balance Sheet Cash provided by operations was $2.8 billion compared to $3.2 billion last year, while capital spending was $1.1 billion compared to $721 million last year. The company returned $1.8 billion to shareholders through dividends and share repurchases. The company completed share repurchases of 1.1 million shares at a cost of $141 million in 2025. Total debt was $7.2 billion as of December 31, 2025 compared to $7.4 billion at the end of 2024. 2026 Outlook Consistent with the Company's long term growth algorithm, it currently expects 2026 Organic Sales Growth to grow in line to ahead of the weighted average growth in the categories and countries it competes, which for the latest year grew at approximately two percent. Reported Net Sales are forecast to reflect a negative impact of 50 basis points from the exit of the company's private label diaper business in the US with no meaningful impact from currency translation. Adjusted Operating Profit is expected to grow at a mid-to-high single-digit rate on a constant-currency basis. Adjusted Earnings Per Share from Continuing Operations are expected to grow Double-Digit on a constant-currency basis driven by approximately 30 percent increase in Income from Equity Companies versus 2025, expectations of flat net interest expense, an adjusted effective tax rate of approximately 23 percent, and average shares outstanding essentially unchanged versus 2025. Adjusted Earnings Per Share attributable to Kimberly-Clark are expected to be flat on a constant-currency basis reflecting a reduction in Income from Discontinued Operations in line with the expected close of the IFP transaction in mid-2026, the proceeds from which will be held to fund, in part, the Kenvue acquisition. Earnings Per Share are expected to be favorably impacted by currency translation of approximately 130 basis points. Supplemental Materials and Live Webcast Supplemental materials will be available at approximately 6:30 a.m. Eastern Standard Time in the Investor Relations section of the Kimberly-Clark website. The company will host a live Q&A session with investors and analysts on January 27, 2026, at 8:00 a.m. Eastern Standard Time. The supplemental materials and Kimberly-Clark's Q&A session can be accessed at the Investor Relations section of the Kimberly-Clark website. A replay of the webcast will be available following the event through the same website. About Kimberly-Clark Kimberly-Clark (NASDAQ: KMB) and its trusted brands are an indispensable part of life for people in more than 175 countries and territories. Our portfolio of brands, including Huggies, Kleenex, Scott, Kotex, Cottonelle, Poise, Depend, Andrex, Pull-Ups, Goodnites, Intimus, Plenitud, Sweety, Softex, Viva and WypAll, hold No. 1 or No. 2 share positions in approximately 70 countries. Our company's purpose is to deliver Better Care for a Better World. We are committed to using sustainable practices designed to support a healthy planet, build strong communities, and enable our business to thrive for decades to come. To keep up with the latest news and learn more about the company's more than 150-year history of innovation, visit the Kimberly-Clark website. Copies of Kimberly-Clark's Annual Report to Stockholders and its proxy statements and other SEC filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, are made available free of charge on the company's website on the same day they are filed with the SEC. To view these filings, visit the Investors section of the company's website. Forward Looking Statements Certain matters contained in this press release concerning our plans and expectations regarding the pending mergers with Kenvue and the pending International Family Care and Professional ("IFP") joint venture transaction with Suzano ("IFP Transaction"), the business outlook, including raw material, energy and other input costs, the anticipated charges and savings from the 2024 Transformation Initiative, cash flow and uses of cash, growth initiatives, innovations, marketing and other spending, net sales, anticipated currency rates and exchange risks, including the impact in Argentina and Türkiye, effective tax rate, contingencies and anticipated transactions of Kimberly-Clark, including dividends, share repurchases and pension contributions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are based upon management's expectations and beliefs concerning future events impacting Kimberly-Clark. There can be no assurance that these future events will occur as anticipated or that our results will be as estimated. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to publicly update them. The assumptions used as a basis for the forward-looking statements include many estimates that, among other things, depend on the successful completion of the mergers with Kenvue and the achievement of future cost savings and projected volume increases. In addition, many factors outside our control, including risks and uncertainties around the pending mergers with Kenvue (including the risk that the anticipated benefits and synergies of the mergers may not be realized when expected or at all, the terms and scope of the expected financing in connection with the mergers may prove to be less favorable than currently expected, that the mergers may not be completed in a timely matter or at all and the risk of litigation related to the mergers), the pending IFP Transaction (including risks related to delays or failure to complete the proposed transaction, the incurrence of significant transaction and separation costs, adverse market reactions, regulatory or legal challenges, and operational disruptions), risks that we are not able to realize the anticipated benefits of the 2024 Transformation Initiative (including risks related to disruptions to our business or operations or related to any delays in implementation), war in Ukraine (including the related responses of consumers, customers, and suppliers and sanctions issued by the U.S., the European Union, Russia or other countries), government trade or similar regulatory actions (including current and potential trade and tariff actions affecting the countries where we operate and the resulting negative impacts on our supply chain, commodity costs, and consumer spending), pandemics, epidemics, fluctuations in foreign currency exchange rates, the prices and availability of our raw materials, supply chain disruptions, disruptions in the capital and credit markets, counterparty defaults (including customers, suppliers and financial institutions with which we do business), failure to realize the expected benefits or synergies from our acquisition and disposition activity, impairment of goodwill and intangible assets and our projections of operating results and other factors that may affect our impairment testing, changes in customer preferences, severe weather conditions, regional instabilities and hostilities, potential competitive pressures on selling prices for our products, energy costs, general economic and political conditions globally and in the markets in which we do business, as well as our ability to maintain key customer relationships, could affect the realization of these estimates. The factors described under Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, or in our other SEC filings, among others, could cause our future results to differ from those expressed in any forward-looking statements made by us or on our behalf. Other factors not presently known to us or that we presently consider immaterial could also affect our business operations and financial results.
SUMMARY OF NON-GAAP FINANCIAL MEASURES
The income tax effect of these non-GAAP items on the Company's Adjusted Earnings per Share from Continuing Operations is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. The impact of these non-GAAP items on the Company's effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income from Continuing Operations Before Income Taxes and Equity Interests and Provision for income taxes. We use these non-GAAP financial measures to assist in comparing our performance on a consistent basis for purposes of business decision making by removing the impact of certain items that we do not believe reflect our underlying and ongoing operations. We believe that presenting these non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating our results. We believe that the presentation of these non-GAAP financial measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliation to those measures, provides investors with additional understanding of the factors and trends affecting our business than could be obtained absent these disclosures. These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP measures, and they should be read only in conjunction with our Consolidated Financial Statements prepared in accordance with GAAP. There are limitations to these non-GAAP financial measures because they are not prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companies due to potential differences in methods of calculation and items being excluded. We compensate for these limitations by using these non-GAAP financial measures as a supplement to the GAAP measures and by providing reconciliations of the non-GAAP and comparable GAAP financial measures. Certain non-GAAP financial measures referenced in this press release are presented on a forward-looking basis. Kimberly-Clark does not provide a reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures on a forward-looking basis because it is unable to predict certain adjustment items without unreasonable effort. Please note that these items could be material to Kimberly-Clark's results calculated in accordance with GAAP. The non-GAAP financial measures exclude the following items for the relevant time periods:
The following tables provide a reconciliation of Organic Sales Growth from continuing operations:
The following table provides a reconciliation of Adjusted Gross Profit from continuing operations:
The following table provides a reconciliation of Adjusted Operating Profit from continuing operations:
The following table provides a reconciliation of Adjusted Earnings per Share from continuing operations:
The following table provides a reconciliation of Adjusted Earnings per Share Attributable to Kimberly-Clark:
The following tables provide a reconciliation of the continuing operations Adjusted Effective Tax Rate:
The following table provides a reconciliation of Adjusted Income from Discontinued Operations:
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