On April 22, 2025, Kimberly-Clark Corp (KMB, Financial) released its 8-K filing detailing its first quarter 2025 financial results. The company, a leading manufacturer in the tissue and hygiene sector with brands like Huggies, Kotex, and Kleenex, reported a challenging quarter with net sales of $4.8 billion, a 6.0% decline from the previous year. This decline was primarily driven by currency impacts and divestitures, including the exit from the private label diaper business in the US.
Performance and Challenges
Kimberly-Clark Corp (KMB, Financial) reported a diluted earnings per share (EPS) of $1.70, which fell short of the analyst estimate of $1.75. However, the adjusted EPS was $1.93, surpassing the estimate, but still reflecting a 4.0% decrease from the previous year. The company's performance was impacted by a 1.6% decline in organic sales, driven by a 1.5% decrease in pricing, while volume and mix remained stable. The gross margin was reported at 35.8%, with an adjusted gross margin of 36.9%, down 20 basis points from the prior year.
Financial Achievements and Industry Context
Despite the challenges, Kimberly-Clark Corp (KMB, Financial) achieved significant productivity savings and maintained strong market execution. The company's ability to innovate across the value spectrum has enabled it to gain market share, which is crucial in the competitive Consumer Packaged Goods industry. The firm continues to focus on its Powering Care strategy, which emphasizes innovation and cost management.
Key Financial Metrics
Operating profit for the quarter was $769 million, down from $853 million in the previous year. Adjusted operating profit was $844 million, reflecting a 6.0% decrease. The effective tax rate was 23.8%, consistent with the prior year, while the adjusted effective tax rate was 21.4%, benefiting from the resolution of certain tax matters. Net income attributable to Kimberly-Clark Corp was $567 million, a 12.4% decrease from the previous year.
| Metric | Q1 2025 | Q1 2024 | Change |
|---|---|---|---|
| Net Sales | $4.8 billion | $5.1 billion | -6.0% |
| Operating Profit | $769 million | $853 million | -9.8% |
| Net Income | $567 million | $658 million | -12.4% |
| Diluted EPS | $1.70 | $1.91 | -11.0% |
Analysis and Outlook
Kimberly-Clark Corp (KMB, Financial) continues to navigate a dynamic operating environment, with geopolitical uncertainties and currency fluctuations posing significant challenges. The company's strategic focus on innovation and cost management is expected to help mitigate these challenges over time. However, the impact of divestitures and business exits, along with unfavorable currency translations, remains a concern for future profitability.
“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.”
Kimberly-Clark Corp (KMB, Financial) is adjusting its full-year outlook to account for potential incremental costs from geopolitical uncertainties. The company remains committed to its long-term growth strategy, aiming to outpace category growth in its key markets.
Explore the complete 8-K earnings release (here) from Kimberly-Clark Corp for further details.
