Group 1 - Kimberly-Clark's share price declined nearly 3% following an unwelcome change in guidance despite quarterly results that were not considered awful [1] - The company reported net sales of $4.84 billion for Q1 2025, a 6% decrease from Q1 2024, attributed to currency impacts and divestitures [2] - Non-GAAP adjusted net income fell by 4% year over year to $1.93 per share, with all three business segments experiencing declines in net sales [3] Group 2 - Kimberly-Clark cut its full-year guidance, now expecting adjusted earnings per share to be flat to slightly positive, with an anticipated $300 million in additional costs due to international trade disputes [4] - Previously, the company had expected profitability to rise by at least a mid-single-digit percentage rate [4] - The current trade situation is perceived as an excuse for the company's underperformance, indicating a need for more than just a stable trade environment to stimulate growth [5]

Core Insights - Kimberly-Clark Corporation reported first-quarter 2025 results with sales missing estimates but adjusted earnings per share exceeding expectations, both metrics showing a year-over-year decline [1][3][12] Financial Performance - Adjusted earnings were $1.93 per share, beating the Zacks Consensus Estimate of $1.89, but down 4% year over year due to reduced operating profit and net income from equity companies [3] - Sales totaled $4,840 million, a 6% decline from $5,149 million in the same period last year, and below the Zacks Consensus Estimate of $4,864 million [3] - Unfavorable foreign currency exchange rates negatively impacted sales by approximately 2.4%, alongside a 2% reduction from divestitures and business exits [3] Segment Performance - North America segment net sales were $2,666 million, down 3.9%, with organic sales decreasing 0.6% primarily due to unfavorable pricing [5] - International Personal Care segment net sales were $1,383 million, an 8.9% decline, with organic sales down 2.8% due to price investments [7] - International Family Care & Professional segment reported net sales of $791 million, a 7.7% decline, with organic sales decreasing 2.3% [9] Operational Metrics - Adjusted gross margin was 36.9%, reflecting a 20-basis point decrease [4] - Adjusted operating profit fell 6% to $844 million, impacted by currency translation [4] Financial Health - The company ended the quarter with cash and cash equivalents of $563 million, long-term debt of $6,481 million, and total stockholders' equity of $1,224 million [11] - Cash provided by operations was $327 million, with capital spending of $204 million, and $466 million returned to shareholders through dividends and share buybacks [11] Future Outlook - For 2025, Kimberly-Clark expects organic sales growth to exceed the market average, currently projected between 1.5% and 2% [12] - Net sales are anticipated to face a negative impact of approximately 200 basis points from currency translation and 240 basis points from divestitures [13] - Adjusted operating profit is now expected to be flat to positive on a constant-currency basis, with similar negative impacts from divestitures and currency rates [14]

Financial Performance - Net sales for the three months ended March 31, 2025, were $4.84 billion, a decline of 6.0% compared to $5.15 billion in 2024, primarily due to unfavorable currency impacts and divestitures[72]. - Gross profit decreased to $1.73 billion, down 9.3% year-over-year, with a gross margin of 35.8%, reflecting a 130 basis point decrease[72][76]. - Operating profit for the same period was $769 million, a decrease of 9.8%, with adjusted operating profit at $844 million, down 6.0% from $898 million in 2024[72][77]. - Net income attributable to Kimberly-Clark Corporation was $567 million, a decrease of 12.4%, with diluted earnings per share at $1.70, down 11.0% from $1.91[72][82]. - Organic sales decreased by 1.6%, driven by lower pricing, while volume and mix remained flat compared to the prior year[75]. - Adjusted earnings per share for the three months ended March 31, 2025, was $1.93, compared to $2.01 in the prior year[111]. Segment Performance - North America segment net sales were $2.67 billion, a decrease of 3.9%, with operating profit increasing by 1.3% to $676 million[87]. - Net sales for International Personal Care decreased by 8.9% to $1.4 billion, primarily due to unfavorable currency impacts of 6.0% and lower organic sales[89]. - Operating profit for International Personal Care fell by 19.8% to $194 million, mainly due to unfavorable pricing net of cost inflation and currency impacts[90]. - Net sales for International Family Care & Professional decreased by 7.7% to $791 million, driven by divestitures, unfavorable currency impacts, and lower organic sales[91]. - Operating profit for International Family Care & Professional decreased by 3.6% to $106 million, influenced by unfavorable pricing and currency impacts[92]. Cost and Savings Initiatives - The 2024 Transformation Initiative is expected to yield total pre-tax savings of $3.0 billion, with total costs anticipated to be approximately $1.5 billion pre-tax[69]. - Incremental costs due to new U.S. tariffs are estimated at approximately $300 million in 2025, primarily affecting the North America segment[66]. Cash Flow and Capital Expenditures - Cash provided by operations was $327 million, down from $438 million in the prior year, due to lower operating profit and unfavorable changes in working capital[93]. - Cash used for investing was $119 million, a decrease from $181 million in the prior year, with capital spending at $204 million compared to $194 million previously[94]. - The company anticipates full-year capital spending to be approximately $1.0 to $1.2 billion, including spending from the 2024 Transformation Initiative[94]. Taxation - The effective tax rate for the first quarter of 2025 was 23.8%, compared to 23.6% in 2024, with an adjusted effective tax rate of 21.4%[81]. - The effective tax rate as adjusted for the three months ended March 31, 2025, was 21.4%, compared to 23.6% in the prior year[112]. Debt Management - Total debt as of March 31, 2025, was $7.2 billion, down from $7.4 billion as of December 31, 2024[97]. Operational Realignment - The company has realigned its operations into three segments: North America, International Personal Care, and International Family Care and Professional, to enhance reporting and management efficiency[67].

Group 1 - Kimberly-Clark reported $4.84 billion in revenue for the quarter ended March 2025, a year-over-year decline of 6% [1] - The EPS for the same period was $1.93, down from $2.01 a year ago, with an EPS surprise of +2.12% compared to the consensus estimate of $1.89 [1] - The reported revenue was a surprise of -0.49% over the Zacks Consensus Estimate of $4.86 billion [1] Group 2 - Key metrics indicate that Kimberly-Clark's shares returned +1.6% over the past month, outperforming the Zacks S&P 500 composite's -8.9% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance in the near term [3] Group 3 - Year-over-year changes in net price impact showed a decline of -0.6% versus an estimated -0.5% by analysts [4] - Organic net consolidated revenue decreased by -1.6%, compared to the average estimate of +0.7% [4] - Currency translation had a year-over-year change of -0.4%, slightly worse than the estimated -0.3% [4]

Core Viewpoint - Kimberly-Clark reported better-than-expected adjusted earnings per share of $1.93 for Q1 2025, despite revenue falling short of estimates due to currency impacts and divestitures [2][6]. Financial Performance - Non-GAAP EPS for Q1 2025 was $1.93, exceeding analyst estimates of $1.90, but down 4.0% from $2.01 in Q1 2024 [3][6]. - GAAP revenue was $4.84 billion, missing the projected $4.89 billion, representing a 6.0% decline year-over-year from $5.15 billion [3][7]. - Gross margin (Non-GAAP) slightly decreased to 36.9%, down 20 basis points from the previous year [3][6]. - Net income (GAAP) was $567 million, a decrease of 12.4% from $647 million in Q1 2024 [3]. Business Overview - Kimberly-Clark operates globally with well-known brands such as Huggies, Kleenex, and Kotex, focusing on essential consumer categories [4]. - The company is implementing strategic initiatives centered around supply chain optimization to enhance operational efficiency and cost management [4]. Sustainability and Innovation - The company's sustainability commitment is integral to its strategy, aiming to reduce the environmental impact of its products [5]. - Kimberly-Clark is investing in innovative product development, including acquisitions like Thinx Inc., to support growth in modern product categories [5]. Geographic Performance - North American sales decreased by 3.9%, while International Personal Care saw an 8.9% decline, influenced by unfavorable currency effects [8]. - The company experienced operational improvements despite these declines, attributed to its efficiency-focused transformation initiative [8]. Future Outlook - Kimberly-Clark has adjusted its outlook for 2025, expecting flat to modest improvement in adjusted operating profit and EPS on a constant-currency basis [10]. - The cautious outlook is influenced by ongoing cost challenges, geopolitical considerations, and moderated economic forecasts [10]. - The execution of strategic initiatives, particularly in supply chain optimization and product innovation, will be crucial for the company's financial performance in the coming quarters [11].

Group 1: Earnings Performance - Kimberly-Clark reported quarterly earnings of $1.93 per share, exceeding the Zacks Consensus Estimate of $1.89 per share, but down from $2.01 per share a year ago [1] - The earnings surprise was 2.12%, and the company matched expectations in the previous quarter with earnings of $1.50 per share [2] - Over the last four quarters, Kimberly-Clark has surpassed consensus EPS estimates three times [2] Group 2: Revenue Analysis - The company posted revenues of $4.84 billion for the quarter, missing the Zacks Consensus Estimate by 0.49%, and down from $5.15 billion year-over-year [3] - Kimberly-Clark has topped consensus revenue estimates only once in the last four quarters [3] Group 3: Stock Performance and Outlook - Kimberly-Clark shares have increased approximately 6.9% since the beginning of the year, contrasting with a -12.3% decline in the S&P 500 [4] - The company's earnings outlook is favorable, with a current consensus EPS estimate of $1.88 for the upcoming quarter and $7.51 for the current fiscal year [8] - The Zacks Rank for Kimberly-Clark is 2 (Buy), indicating expected outperformance in the near future [7] Group 4: Industry Context - The Consumer Products - Staples industry, to which Kimberly-Clark belongs, is currently in the bottom 43% of over 250 Zacks industries, which may impact stock performance [9] - Research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [9]

Q1 2025 Performance & Strategy - The company is embarking on "Powering Care" to establish a strong foundation, scaling initiatives in 2025 while transforming, and aiming to accelerate growth by leveraging scale for industry-leading returns in 2026+[9] - The company is focused on accelerating pioneering innovation, optimizing its margin structure, and wiring its organization for growth to navigate a complex and uncertain operating environment[12] - Gross productivity delivered 5.2% of Adjusted COGS in Q1, with higher contributions expected from Network Optimization & Value Stream Simplification initiatives in 2025[20] - The company is on track to deliver $200 million of SG&A savings from rewiring the organization, with Q1 showing initial results[20] Financial Results & Outlook - Q1 2025 organic sales growth was down 1.6%[46], while adjusted operating profit growth was down 3.8%[46], and adjusted EPS growth was down 4.0%[46] - Q1 2025 adjusted free cash flow was $183 million[46] - North America organic growth was down 0.6%[48], while operating profit growth was up 1.3%[48] - International Personal Care organic growth was 2.8% decrease[52], while International Family Care & Professional organic growth was 2.3% decrease[55] - The company projects approximately $2 billion of adjusted free cash flow for 2025, including $1.0-$1.2 billion of capital expenditures[57] Innovation & Market Performance - In Indonesia Adult Care, thinner, more breathable solutions drove +37% organic growth and +31% volume growth[32] - Poise experienced +6.6% consumption growth in the US xAOC+, a 36% increase in first-time buyers at a key online customer, and a ~30 bps share gain in Light Inco in the US xAOC+[35]

Financial Data and Key Metrics Changes - The company's top line was somewhat softer than expectations, but overall results were consistent with the full-year plan [7] - Organic sales growth for the first quarter was slightly below expectations, while profitability was in line, supported by strong productivity delivery [18][19] - The company is targeting a volume and mix-based organic growth for the year that is ahead of the categories in its markets [22] Business Line Data and Key Metrics Changes - The company is on track to generate approximately $200 million of SG&A savings in the next few years [9] - The first quarter saw a decline in North America private label shipments, impacting total company organic sales [20] Market Data and Key Metrics Changes - Weighted average category growth was expected to be around 2% but was in the 1.5% to 2% range for the first quarter [19] - The company faced lower year-on-year North America private label shipments, which represented about 40 basis points to total company organic sales [20] Company Strategy and Development Direction - The company continues to execute its "Powering Care" strategy, focusing on differentiation, productivity, and agility [10][11] - The strategy includes delivering stronger differentiation at every rung of the good-better-best ladder and enabling a faster, more agile organization [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute the plan despite external headwinds, emphasizing the importance of innovation and consumer value propositions [26][27] - The company is addressing a $300 million tariff impact, with two-thirds attributed to US tariffs on China, and is working to mitigate these costs through supply chain adjustments [56][60] Other Important Information - The company is maintaining its investments in innovation and marketing despite the cost pressures from tariffs [81] - The management highlighted the importance of affordability for consumers, especially in the current economic environment [71] Q&A Session Summary Question: Organic growth performance in North America - Management acknowledged that organic sales were below expectations and discussed factors affecting this, including a lower category growth rate and strategic pricing investments [18][19][20] Question: Impact of tariffs on costs - Management detailed the $300 million tariff impact, with two-thirds coming from US tariffs on China, and discussed strategies to mitigate these costs [56][60] Question: Pricing strategy and consumer behavior - Management emphasized the importance of maintaining product quality while managing pricing and highlighted the shift towards more affordable product offerings [71][72] Question: Guidance on EPS growth - Management explained that the primary change in guidance was due to the $300 million gross impact from tariffs, while still planning to invest in innovation and marketing [117][120] Question: Savings program and productivity - Management confirmed that they are ahead of their productivity savings targets and are optimistic about future savings opportunities [149][151]

Core Viewpoint - Kimberly-Clark Corp. has lowered its profit expectations for the year due to the impact of global trade tensions on its costs, leading to uncertainty in its financial outlook [1] Financial Performance - The company now anticipates that its adjusted operating profit for 2025 will be flat or show slight growth, a revision from the earlier forecast of high single-digit growth made in January [1] - CEO Mike Hsu indicated that the current environment will result in higher costs for the global supply chain than previously expected at the beginning of the year [1] Management Outlook - Despite the challenges, the CEO expressed confidence that the company can offset these costs over time, which would help improve profitability [1]

Financial Performance - Net sales for Q1 2025 were $4.8 billion, a decrease of 6.0% compared to the prior year, impacted by approximately 2.4% from foreign currency translation and 2.0% from divestitures and business exits[4][6] - Operating profit for Q1 2025 was $769 million, down from $853 million in the prior year, reflecting charges related to the 2024 Transformation Initiative[5][6] - Net income attributable to Kimberly-Clark Corporation was $567 million, a decline of 12.4% from $647 million in 2024[32] - Cash provided by operations was $327 million, down from $438 million in the same period last year[36] - Income Before Income Taxes for Q1 2025 was reported at $694 million, compared to $781 million in Q1 2024, reflecting a decrease of approximately 11.1%[46] Earnings and Margins - Adjusted gross margin was 36.9%, down 20 basis points from the prior year, while reported gross margin was 35.8%[5][6] - Diluted earnings per share (EPS) were $1.70, down from $1.91 in the prior year, with adjusted EPS decreasing 4.0% to $1.93[9][6] - Diluted earnings per share decreased to $1.70, down 11.0% from $1.91 in the prior year[32] - Adjusted operating profit for the three months ended March 31, 2025, was $844 million, compared to $898 million in 2024[45] Sales Performance - North America net sales decreased 3.9% to $2.7 billion, with organic sales declining 0.6% primarily due to unfavorable price impacts[12] - International Personal Care (IPC) net sales were $1.4 billion, down 8.9%, with organic sales decreasing 2.8% driven by price investments[14] - Organic sales growth for the consolidated segment was reported at -1.6% for the three months ended March 31, 2025[43] - Net sales for the three months ended March 31, 2025, were $4,840 million, a decrease of 6.0% compared to $5,149 million in 2024[32] Future Outlook - The company expects 2025 organic sales growth to outpace the market growth of 1.5% to 2%[19] - Adjusted operating profit for 2025 is now expected to be flat to positive on a constant-currency basis, revised from previous expectations of high single-digit growth[20] - Adjusted free cash flow is now expected to be approximately $2 billion in 2025, down from a previous expectation of more than $2 billion[23] Balance Sheet - Total debt as of March 31, 2025, was $7.2 billion, a decrease from $7.4 billion as of December 31, 2024[18] - Total current assets decreased to $5,281 million from $5,580 million as of December 31, 2024[34] - Total liabilities decreased to $16,305 million from $16,546 million at the end of 2024[34] Taxation - The Adjusted Effective Tax Rate for Q1 2025 was 21.4%, while the reported rate for Q1 2024 was 23.6%[46] - The effective tax rate as reported for Q1 2025 was 23.8%, slightly higher than the 23.6% reported for Q1 2024[46]