Kimberly-Clark Announces First Quarter 2025 Results and Updates 2025 Outlook
Rhea-AI Summary
Kimberly-Clark (KMB) reported Q1 2025 results with net sales of $4.8 billion, down 6.0% from the previous year, including a 1.6% organic sales decline. The company's diluted earnings per share were $1.70, while adjusted EPS decreased 4.0% to $1.93.
Key financial metrics include:
- Gross margin at 35.8% (36.9% adjusted)
- Operating profit of $769 million ($844 million adjusted)
- Net interest expense of $57 million
- Effective tax rate of 23.8% (21.4% adjusted)
The company updated its 2025 outlook, now expecting flat to positive adjusted operating profit on a constant-currency basis, compared to previous expectations of high single-digit growth. Adjusted Free Cash Flow is revised to approximately $2 billion, down from the previous forecast of more than $2 billion, reflecting increased cost pressures from an uncertain geopolitical landscape.
Positive
- Operating profit in North America increased 1.3% to $676 million
- Strong productivity savings and cost management across segments
- Effective tax rate improved to 21.4% from 23.6% on adjusted basis
- Total debt reduced to $7.2 billion from $7.4 billion (Dec 31, 2024)
Negative
- Net sales declined 6.0% to $4.8 billion
- Organic sales decreased 1.6% with 1.5% price decline
- Adjusted operating profit down 6.0% to $844 million
- Adjusted EPS decreased 4.0% to $1.93
- Downward revision of 2025 operating profit outlook from high single-digit growth to flat/positive
- Adjusted Free Cash Flow forecast reduced to approximately $2 billion
News Market Reaction – KMB
In the trading session that priced this news, KMB declined 1.53%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Results driven by strong in-market execution and effective cost management in dynamic operating environment
Full year outlook adjusted to reflect potential incremental costs from a more uncertain geopolitical landscape
"Building on the strong foundation we established in 2024, we made further progress across the three pillars of our Powering Care strategy in the first quarter of 2025," said Kimberly-Clark Chairman and CEO, Mike Hsu. "Despite the evolving external landscape, our first quarter was consistent with our full-year plan."
Hsu continued, "At the same time, the current environment will now mean greater costs across our global supply chain versus our expectations at the beginning of the year. However, we remain confident in our ability to offset these costs over time and unlock our long-term potential. Our strong productivity momentum is fueling investments to advance our competitive advantage and driving profitability. Our innovation across the good-better-best value spectrum is winning with consumers and enabling us to gain share. I am proud of the effort of our teams around the world. Their commitment has positioned Kimberly-Clark to usher in our next chapter of growth and continue to deliver Better Care for a Better World."
Quarter Highlights
- Net sales of
$4.8 billion - Reported gross margin was 35.8 percent; adjusted gross margin was 36.9 percent, down 20 basis points versus the prior year.
- Diluted earnings per share were
$1.70 $1.93
First Quarter 2025 Results
Net sales of
Gross margin was 35.8 percent in the quarter, inclusive of
First quarter operating profit was
Net interest expense was
The first quarter effective tax rate was 23.8 percent, in line with the prior year. On an adjusted basis, the effective rate was 21.4 percent compared to 23.6 percent in the prior year. The first quarter of 2025 benefited from the resolution of certain tax matters.
Net income of equity companies was
Diluted EPS in the quarter were
Business Segment Results
(Unaudited)
Q1 change vs year ago (%) | Volume | Mix/Other | Net Price | Divestitures | Currency | Total(a) | Organic(b) | |||||||
Consolidated | (0.2) | 0.1 | (1.5) | (2.0) | (2.4) | (6.0) | (1.6) | |||||||
NA | (0.1) | 0.1 | (0.6) | (2.9) | (0.4) | (3.9) | (0.6) | |||||||
IPC | (0.6) | 0.3 | (2.5) | — | (6.0) | (8.9) | (2.8) | |||||||
IFP | 0.5 | (0.1) | (2.6) | (2.9) | (2.6) | (7.7) | (2.3) |
(a) | Total may not sum across due to rounding. |
(b) | Represents the change in net sales excluding the impacts of currency translation and divestitures and business exits. Organic Sales Growth is a non-GAAP financial measure. See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to non-GAAP measures. |
(c) | Impact of the sale of the PPE business, the exit of the Company's private label diaper business in |
Operating profit of
International Personal Care (IPC)
IPC net sales of
Operating profit of
International Family Care & Professional (IFP)
IFP sales of
Operating profit of
Cash Flow and Balance Sheet
Cash provided by operations was
2025 Outlook
Consistent with the Company's long term growth algorithm, 2025 Organic Sales Growth is expected to outpace the weighted average growth in the categories and countries it competes, which are currently growing in the range of one and a half to two percent, compared to approximately two percent at the start of the year. Reported Net Sales are forecast to reflect a negative impact of approximately 200 basis points from currency translation, compared to approximately 300 basis points previously, as well as a negative 240 basis point impact from a combination of the PPE divestiture and the exit of the company's private label diaper business in the US.
To reflect a reassessment of its cost base, including potential impacts from changes in the global geopolitical landscape, the company now expects its 2025 Adjusted Operating Profit to be flat to positive on a constant-currency basis versus the prior year, compared to a previous expectation of high single-digit growth on a constant currency basis. This outlook continues to include a negative 320 basis point impact from a combination of its PPE divestiture and the exit of the company's private label diaper business in the US. Operating Profit growth is also expected to be negatively impacted by approximately 200 basis points from currency translation, compared to a previous expectation for a negative 300 basis point impact.
For the same reasons, Adjusted Earnings Per share are now expected to be flat to positive on a constant-currency basis including a negative 320 basis point impact from a combination of its PPE divestiture and the exit of the company's private label diaper business in the US as well as a negative 100 basis point impact from items below operating profit including an impact from higher net interest expense, a higher effective adjusted tax rate and lower shares outstanding, among others. Earnings Per Share are also currently expected to be negatively impacted by approximately 300 basis points from currency translation, including the impact on income from equity interests, compared to a previous expectation for a negative 350 to 400 basis point impact.
Finally, related to the incremental profit pressures the Company expects to experience, Adjusted Free Cash Flow is now expected to be approximately
This outlook reflects assumptions subject to change given the macro environment.
Supplemental Materials and Live Webcast
Supplemental materials will be available at approximately 7:05 a.m. Eastern Daylight 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 April 22, 2025, at 8:30 a.m. Eastern Daylight Time. The supplemental materials and Kimberly-Clark's Q&A session can be accessed at the Kimberly-Clark website. A replay of the webcast will be available following the event through the same website.
About Kimberly-Clark
Kimberly-Clark (NYSE: KMB) and its trusted brands are an indispensable part of life for people in more than 175 countries and territories. Fueled by ingenuity, creativity, and an understanding of people's most essential needs, we create products that help individuals experience more of what's important to them. 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. We use sustainable practices that support a healthy planet, build strong communities, and ensure our business thrives for decades to come. We are proud to be recognized as one of the World's Most Ethical Companies(R) by Ethisphere for the seventh year in a row and one of Fortune's Most Innovative Companies in America in 2024. To keep up with the latest news and to 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 news release concerning 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
The assumptions used as a basis for the forward-looking statements include many estimates that, among other things, depend on the achievement of future cost savings and projected volume increases. In addition, many factors outside our control, including the risk 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
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.
KIMBERLY-CLARK CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Millions, except per share amounts) | ||||||
Three Months Ended | ||||||
2025 | 2024 | Change | ||||
Net Sales | $ 4,840 | $ 5,149 | (6.0 %) | |||
Cost of products sold | 3,107 | 3,238 | (4.0 %) | |||
Gross Profit | 1,733 | 1,911 | (9.3 %) | |||
Marketing, research and general expenses | 941 | 1,039 | (9.4 %) | |||
Other (income) and expense, net | 23 | 19 | 21.1 % | |||
Operating Profit | 769 | 853 | (9.8 %) | |||
Nonoperating expense | (18) | (15) | 20.0 % | |||
Interest income | 7 | 10 | (30.0 %) | |||
Interest expense | (64) | (67) | (4.5 %) | |||
Income Before Income Taxes and Equity Interests | 694 | 781 | (11.1 %) | |||
Provision for income taxes | (165) | (184) | (10.3 %) | |||
Income Before Equity Interests | 529 | 597 | (11.4 %) | |||
Share of net income of equity companies | 44 | 61 | (27.9 %) | |||
Net Income | 573 | 658 | (12.9 %) | |||
Net income attributable to noncontrolling interests | (6) | (11) | (45.5 %) | |||
Net Income Attributable to Kimberly-Clark Corporation | $ 567 | $ 647 | (12.4 %) | |||
Per Share Basis | ||||||
Net Income Attributable to Kimberly-Clark Corporation | ||||||
Basic | $ 1.71 | $ 1.92 | (10.9 %) | |||
Diluted | $ 1.70 | $ 1.91 | (11.0 %) | |||
Cash Dividends Declared | $ 1.26 | $ 1.22 | 3.3 % | |||
Common Shares Outstanding | March 31 | |||||
2025 | 2024 | |||||
Outstanding shares as of | 331.9 | 336.8 | ||||
Average diluted shares for three months ended | 333.3 | 338.3 | ||||
KIMBERLY-CLARK CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Millions) | ||||
March 31, 2025 | December 31, 2024 | |||
ASSETS | ||||
Current Assets | ||||
Cash and cash equivalents | $ 563 | $ 1,021 | ||
Accounts receivable, net | 2,176 | 2,009 | ||
Inventories | 1,909 | 1,822 | ||
Other current assets | 633 | 728 | ||
Total Current Assets | 5,281 | 5,580 | ||
Property, Plant and Equipment, Net | 7,507 | 7,513 | ||
Investments in Equity Companies | 354 | 314 | ||
Goodwill | 1,971 | 1,964 | ||
Other Intangible Assets, Net | 85 | 87 | ||
Other Assets | 1,107 | 1,088 | ||
TOTAL ASSETS | $ 16,305 | $ 16,546 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current Liabilities | ||||
Debt payable within one year | $ 766 | $ 568 | ||
Trade accounts payable | 3,601 | 3,715 | ||
Accrued expenses and other current liabilities | 2,139 | 2,319 | ||
Dividends payable | 415 | 402 | ||
Total Current Liabilities | 6,921 | 7,004 | ||
Long-Term Debt | 6,481 | 6,875 | ||
Noncurrent Employee Benefits | 640 | 643 | ||
Deferred Income Taxes | 319 | 326 | ||
Other Liabilities | 683 | 686 | ||
Redeemable Preferred Securities of Subsidiaries | 37 | 37 | ||
Stockholders' Equity | ||||
Kimberly-Clark Corporation | 1,101 | 840 | ||
Noncontrolling Interests | 123 | 135 | ||
Total Stockholders' Equity | 1,224 | 975 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 16,305 | $ 16,546 | ||
KIMBERLY-CLARK CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Millions) | ||||
Three Months Ended March 31 | ||||
2025 | 2024 | |||
Operating Activities | ||||
Net income | $ 573 | $ 658 | ||
Depreciation and amortization | 218 | 185 | ||
Stock-based compensation | 32 | 32 | ||
Deferred income taxes | 7 | (11) | ||
Net (gains) losses on asset and business dispositions | 10 | 5 | ||
Equity companies' earnings (in excess of) less than dividends paid | (39) | (61) | ||
Operating working capital | (476) | (367) | ||
Postretirement benefits | 3 | 2 | ||
Other | (1) | (5) | ||
Cash Provided by Operations | 327 | 438 | ||
Investing Activities | ||||
Capital spending | (204) | (194) | ||
Investments in time deposits | (99) | (97) | ||
Maturities of time deposits | 186 | 119 | ||
Other | (2) | (9) | ||
Cash Used for Investing | (119) | (181) | ||
Financing Activities | ||||
Cash dividends paid | (405) | (398) | ||
Change in short-term debt | 45 | 4 | ||
Debt repayments | (250) | — | ||
Proceeds from exercise of stock options | 30 | 3 | ||
Repurchases of common stock | (61) | (54) | ||
Cash dividends paid to noncontrolling interests | (18) | (19) | ||
Other | (24) | (21) | ||
Cash Used for Financing | (683) | (485) | ||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 17 | (12) | ||
Change in Cash and Cash Equivalents | (458) | (240) | ||
Cash and Cash Equivalents - Beginning of Period | 1,021 | 1,093 | ||
Cash and Cash Equivalents - End of Period | $ 563 | $ 853 | ||
KIMBERLY-CLARK CORPORATION BUSINESS SEGMENT RESULTS (Millions) | ||||||
Three Months Ended March 31 | ||||||
2025 | 2024 | Change | ||||
Net Sales | ||||||
NA | $ 2,666 | $ 2,774 | (3.9 %) | |||
IPC | 1,383 | 1,518 | (8.9 %) | |||
IFP | 791 | 857 | (7.7 %) | |||
Total Net Sales | $ 4,840 | $ 5,149 | (6.0 %) | |||
Operating Profit | ||||||
NA | $ 676 | $ 667 | 1.3 % | |||
IPC | 194 | 242 | (19.8 %) | |||
IFP | 106 | 110 | (3.6 %) | |||
Segment Operating Profit(a) | 976 | 1,019 | (4.2 %) | |||
Corporate & Other | (207) | (166) | 24.7 % | |||
Total Operating Profit | $ 769 | $ 853 | (9.8 %) | |||
(a) | Total Segment Operating Profit is a non-GAAP financial measure as it excludes certain unallocated general corporate expenses and income and expense not associated with the ongoing operations of the segments. Refer to "Summary of Non-GAAP Financial Measures" below for further discussion of how we utilize non-GAAP financial measures. As shown above, we have included a reconciliation to Total Operating Profit, as determined in accordance with GAAP. |
SUMMARY OF NON-GAAP FINANCIAL MEASURES
The following provides the reconciliation of the non-GAAP financial measures provided in this news release to the most closely related GAAP measure. These measures include: Organic Sales Growth, Adjusted Gross Profit, Adjusted Operating Profit, Adjusted Earnings per Share, and Adjusted Effective Tax Rate.
- Organic Sales Growth is defined as the change in consolidated Net Sales, as determined in accordance with
U.S. GAAP, excluding the impacts of currency translation and divestitures and business exits. - Adjusted Gross and Operating Profit, Adjusted Earnings per Share, and Adjusted Effective Tax Rate are defined as consolidated Gross Profit, Operating Profit, Diluted Earnings per Share, and Effective Tax Rate, respectively, as determined in accordance with
U.S. GAAP, excluding the impacts of certain items that management believes do not reflect our underlying operations, and which are discussed in further detail below.
The income tax effect of these non-GAAP items on the Company's Adjusted Earnings per Share 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 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
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 unaudited interim condensed 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 news 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:
- 2024 Transformation Initiative - We initiated this transformation to create a more agile and focused operating structure that will accelerate our proprietary pipeline of innovation in right-to-win spaces and improve our growth trajectory, profitability, and returns on investment.
The following table provides a reconciliation of Organic Sales Growth:
Three Months Ended March 31, 2025 | ||||||||
Percent change vs. the prior year period | ||||||||
NA | IPC | IFP | Consolidated | |||||
Net Sales Growth | (3.9) | (8.9) | (7.7) | (6.0) | ||||
Currency Translation | 0.4 | 6.0 | 2.6 | 2.4 | ||||
Divestitures and Business Exits | 2.9 | — | 2.9 | 2.0 | ||||
Organic Sales Growth(a) | (0.6) | (2.8) | (2.3) | (1.6) | ||||
(a) Table may not foot due to rounding. | ||||||||
The following table provides a reconciliation of Adjusted Gross Profit:
Three Months Ended March 31 | ||||
2025 | 2024 | |||
Gross Profit | $ 1,733 | $ 1,911 | ||
2024 Transformation Initiative | 53 | — | ||
Adjusted Gross Profit | $ 1,786 | $ 1,911 | ||
The following table provides a reconciliation of Adjusted Operating Profit:
Three Months Ended March 31 | ||||
2025 | 2024 | |||
Operating Profit | $ 769 | $ 853 | ||
2024 Transformation Initiative | 75 | 45 | ||
Adjusted Operating Profit | $ 844 | $ 898 | ||
The following table provides a reconciliation of Adjusted Earnings per Share:
Three Months Ended March 31 | ||||
2025 | 2024 | |||
Diluted Earnings per Share | $ 1.70 | $ 1.91 | ||
2024 Transformation Initiative | 0.23 | 0.10 | ||
Adjusted Earnings per Share(a) | $ 1.93 | $ 2.01 | ||
(a) | The non-GAAP adjustments included above are presented net of tax. The income tax effect of these non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. Refer to the Adjusted Effective Tax Rate reconciliation below for the tax effect of these adjustments on the Company's reported Provision for income taxes. |
The following table provides a reconciliation of the Adjusted Effective Tax Rate:
Three Months Ended March 31 | ||||||||
2025 | 2024 | |||||||
Income Before | Provision for | Income Before | Provision for | |||||
As Reported | $ 694 | $ (165) | $ 781 | $ (184) | ||||
2024 Transformation Initiative | 77 | — | 45 | (11) | ||||
As Adjusted | $ 771 | $ (165) | $ 826 | $ (195) | ||||
Effective Tax Rate | ||||||||
As Reported | 23.8 % | 23.6 % | ||||||
As Adjusted | 21.4 % | 23.6 % | ||||||
[KMB-F]
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SOURCE Kimberly-Clark Corporation