Core Insights - Kimberly-Clark Corporation reported weaker-than-expected first-quarter sales, with quarterly adjusted earnings per share at $1.93, surpassing the analyst consensus estimate of $1.89, while quarterly sales were $4.84 billion, down 6%, missing the expected $4.88 billion [1] - The company anticipates its 2025 Adjusted Operating Profit to be flat to positive on a constant-currency basis, a significant downgrade from the previous expectation of high single-digit growth [2] - Analysts have adjusted their price targets for Kimberly-Clark following the earnings announcement, reflecting a cautious outlook [3][7] Financial Performance - Quarterly adjusted earnings per share were $1.93, beating the consensus estimate of $1.89 [1] - Quarterly sales totaled $4.84 billion, a 6% decline compared to the previous year, missing the expected $4.88 billion [1] - The company expects a 200 basis point impact on reported net sales from currency translation, an improvement from the earlier estimate of 300 basis points [2] Strategic Outlook - The CEO indicated that the current environment will lead to greater costs across the global supply chain than initially expected [1] - The divestment of the PPE business and exit from the U.S. private label diaper segment is projected to negatively impact sales by an additional 240 basis points [2] Analyst Ratings - Evercore ISI Group maintained an Outperform rating but lowered the price target from $168 to $155 [7] - Piper Sandler also maintained an Overweight rating, reducing the price target from $158 to $156 [7] - RBC Capital kept an Outperform rating while lowering the price target from $165 to $162 [7]

Core Insights - Kimberly-Clark is recognized as a Dividend King, indicating strong cash flows that support reliable dividends and consistent growth in shareholder value [1] - The stock price has experienced fluctuations, with recent downswings followed by anticipated upswings, suggesting a sustainable uptrend [2][3] - The company is well-positioned in the personal care products industry, which is essential and regularly needed, contributing to solid cash flows [5] Financial Performance - In Q1, revenue decreased by 6% to $4.8 billion, slightly below consensus estimates, primarily due to divestitures, while organic contraction was only 1.6% [6] - The adjusted gross margin contracted by 20 basis points, but operating margin was less affected than analysts forecasted, aided by efficiency efforts [7] - Earnings declined by 4%, with free cash flow expected to be nearly $2 billion, indicating financial health [8][9] Capital Returns - Kimberly-Clark has a dividend yield of 3.66%, with an annual dividend of $5.04 and a 54-year track record of dividend increases [10] - Share repurchases reduced the share count by 1.5% in Q1, contributing to capital returns alongside dividends [10] Analyst Sentiment - Analysts maintain a consensus rating of Hold, with institutions owning approximately 75% of the stock, indicating strong institutional interest [11] - There is a forecasted upside of about 5% for the stock this year, with recent price target increases aligning with consensus [11] Market Trends - The stock is currently range-bound but shows signs of regaining a long-term uptrend, with support levels rising [12] - A retest of the all-time high is anticipated, with potential for new highs by the end of the year [12]

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]

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]

POWERING CARE Q1 2025 EARNINGS April 22, 2025 Forward-Looking Statements Certain matters contained in this presentation 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 Argentina and Türkiye, effective tax rate, contingencie ...

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]

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]