Kimberly-Clark (NYSE:KMB) Q4 2025 Earnings call January 27, 2026 08:00 AM ET Company ParticipantsChris Carey - Head of Consumer Staples ResearchChris Jakubik - Head of Investor RelationsMike Hsu - Chairman and CEONelson Urdaneta - CFONik Modi - Managing DirectorRuss Torres - President and COOConference Call ParticipantsBonnie Herzog - Managing Director and Senior Equity Research AnalystEdward Lewis - Senior AnalystLauren Lieberman - Managing Director and Equity Research AnalystMike Lavery - Senior Research ...

Kimberly-Clark (NYSE:KMB) Q4 2025 Earnings call January 27, 2026 08:00 AM ET Speaker2Greetings. Welcome to the Kimberly-Clark 4Q2025 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the opening remarks. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Chris Jakubik, Vice President ...

Group 1 - The core viewpoint of the article is that Kimberly-Clark reported its Q4 2025 earnings, showing a slight miss in net sales but a beat in adjusted earnings per share due to cost control and stable demand for its products [1] Group 2 - The company reported net sales of $4.08 billion, slightly below analyst expectations of $4.09 billion [1] - Adjusted earnings per share were $1.86, exceeding analyst expectations of $1.81 [1] - The company anticipates a double-digit growth in adjusted earnings per share for 2026, while analysts project a growth of 3.1% [1]

Financial Data and Key Metrics Changes - In 2025, the company achieved approximately 2% volume-led organic growth, with 3% volume plus mix growth in Q4 despite a slowdown in global weighted average category growth to about 60 basis points [38][39] - Adjusted free cash flow for the year was $1.9 billion, consistent with previous estimates, indicating strong cash generation capabilities [39] - The company reported industry-leading gross productivity at 6.2% of Adjusted COGS, peaking at 7.2% in Q4, exceeding expectations [15] Business Line Data and Key Metrics Changes - The personal care business led productivity improvements, with significant progress in baby and childcare categories, reducing product platforms from 30 to 11 [16] - Innovations in personal care, such as Huggies' new products, contributed to share gains in key markets, with Huggies gaining nearly 50 basis points of share in Brazil in Q4 [23][28] - The company maintained healthy margins and strong exit momentum in Q4, with broad-based volume-led organic growth across all IPC focus markets [22] Market Data and Key Metrics Changes - In China, the company gained over 900 basis points of share in diapers over the past five years, while local competitors shifted focus to other markets [21] - The international personal care business saw broad-based share gains, with all focus markets delivering volume-led organic growth in Q4 [22] - The North American market demonstrated resilience, with positive volume mix-led growth for three consecutive years, despite competitive pressures [27][28] Company Strategy and Development Direction - The company is pivoting towards higher growth, higher margin personal care categories, including the sale of its Brazilian tissue operations and PPE business [4] - The acquisition of Kenvue is seen as a strategic move to enhance growth and create a consumer-centric health and wellness leader [5][6] - The company aims to achieve $2.1 billion in annual synergies from the Kenvue acquisition, with a focus on cost synergies and EPS accretion [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging environment, emphasizing a commitment to innovation and brand support [11][19] - The outlook for 2026 includes expectations for mid- to high-single-digit constant currency adjusted EPS growth, driven by the Kenvue acquisition and ongoing operational improvements [46][47] - The company anticipates continued pressure on consumers and a focus on value, but remains optimistic about its growth initiatives [11] Other Important Information - The company has made significant investments in its North American manufacturing footprint, including a $2 billion investment to enhance its supply chain [16] - The Powering Care strategy has created a virtuous cycle of growth, enabling the company to maintain resilience amid external challenges [10][12] - The company has improved its cash conversion cycle significantly, moving from 6 days in 2021 to around negative 10 days by the end of 2025 [43] Q&A Session Summary Question: What are the expectations for the Kenvue acquisition? - The company expects the Kenvue acquisition to enhance growth and create significant value for shareholders, with a focus on achieving synergies and integrating the brands effectively [7][45] Question: How is the company addressing competitive pressures? - Management highlighted a disciplined approach to innovation and marketing, which has allowed the company to maintain market share and drive growth despite competitive challenges [19][27] Question: What is the outlook for 2026? - The company projects mid- to high-single-digit constant currency adjusted EPS growth for 2026, supported by strong operational performance and the Kenvue acquisition [46][47]

Financial Data and Key Metrics Changes - In 2025, the company achieved approximately 2% organic growth, supported by 3% volume plus mix growth, despite a slowdown in global weighted average category growth to roughly 60 basis points in Q4 [38][39] - Adjusted Free Cash Flow for the year was $1.9 billion, consistent with previous estimates, indicating strong cash generation capabilities [39] - The company reported industry-leading gross productivity at 6.2% of Adjusted COGS for the year, peaking at 7.2% in Q4, exceeding expectations [15] Business Line Data and Key Metrics Changes - The Personal Care business led the way in productivity improvements, with significant progress in delivering high-performing products at lower costs [16] - Innovations in the Personal Care segment, such as Huggies' new products, contributed to strong volume-led organic growth, particularly in key markets like China and Brazil [22][24] - The company exited a large private label diaper contract in North America, which impacted the overall performance but was part of a strategic realignment [38] Market Data and Key Metrics Changes - In the international Personal Care business, the company gained over 900 basis points of share in diapers over the past five years, while local competitors have struggled [20] - The company saw broad-based share gains in international focus markets, with all focus markets delivering volume-led organic growth in Q4 [22] - In North America, the company achieved a volume plus mix growth of 1.8% in Q4, with Personal Care growing value share by 20 basis points for the year [28] Company Strategy and Development Direction - The company is focused on transforming into a pure-play Personal Care company, pivoting its portfolio towards higher growth and higher margin categories [4] - The acquisition of Kenvue is seen as a strategic move to enhance growth and create a consumer-centric health and wellness leader [5][7] - The company aims to leverage its operating momentum to create significant value for shareholders and improve care standards for consumers globally [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging environment, citing strong execution of the Powering Care strategy as a key driver of success [19] - The outlook for 2026 includes expectations for mid- to high-single-digit constant currency growth in Adjusted Operating Profit, supported by a robust pipeline of initiatives [46][47] - Management acknowledged ongoing consumer pressure and a focus on value, indicating that these factors will persist in the near term [11] Other Important Information - The company has made significant investments in its North American manufacturing footprint, including a $2 billion investment to enhance its capabilities [16] - The integration of Kenvue is being led by a dedicated team, with strong progress reported in the early stages [18] - The company has achieved a strong cash conversion cycle improvement, going from 6 days in 2021 to around negative 10 days at the close of 2025 [43] Q&A Session Summary Question: What are the expectations for the Kenvue acquisition? - Management expects the Kenvue acquisition to create significant value and enhance growth, with a target of generating $2.1 billion in annual synergies net of reinvestment [7][51] Question: How is the company addressing competitive pressures? - The company is focused on out-innovating and out-marketing competitors, maintaining a disciplined approach to brand investments and consumer engagement [19][27] Question: What is the outlook for Adjusted EPS growth? - The company anticipates double-digit growth in Adjusted EPS from continuing operations on a constant currency basis, driven by the Kenvue acquisition and ongoing operational improvements [47][48]

Financial Data and Key Metrics Changes - In 2025, the company achieved approximately 2% volume-led organic growth, with a strong performance in the fourth quarter, delivering 3% volume plus mix growth despite a slowdown in global weighted average category growth to roughly 60 basis points [38][39] - Adjusted free cash flow for the year was $1.9 billion, consistent with previous estimates, indicating the company's ability to maintain performance across quarters [39][45] - The company reported industry-leading gross productivity at 6.2% of Adjusted COGS, peaking at 7.2% in the fourth quarter, exceeding expectations [15] Business Line Data and Key Metrics Changes - The personal care business led the way in productivity improvements, with significant progress in categories like baby and childcare, which are highly competitive [16] - The company pivoted its portfolio towards higher growth, higher margin personal care categories, including the sale of its Brazilian tissue operations and PPE business, and exiting approximately $650 million of private label business [4][5] - Innovations in the personal care segment, such as Huggies' new products, contributed to strong volume growth and market share gains in various regions [24][28] Market Data and Key Metrics Changes - In international personal care markets, the company gained over 900 basis points of share in diapers over the past five years, while local competitors shifted focus away from China [20] - The company saw broad-based share gains in international personal care focus markets, with all focus markets delivering volume-led organic growth in Q4 [21][22] - In North America, the company achieved a third consecutive year of positive volume mix-led growth, with personal care growing value share by 20 basis points [27][28] Company Strategy and Development Direction - The company is focused on its "Powering Care" strategy, which emphasizes innovation, cost discipline, and a pivot towards higher margin categories [3][4] - The acquisition of Kenvue is seen as a significant step in the company's transformation, expected to enhance growth and create a scaled health and wellness leader [5][6] - The company aims to build a consumer-centric care model with a portfolio of ten iconic billion-dollar brands across critical life stages [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging environment, citing strong execution and a focus on innovation-led growth [19][39] - The outlook for 2026 includes expectations for mid- to high-single-digit constant currency adjusted EPS growth, driven by the Kenvue acquisition and ongoing operational improvements [47][48] - The company anticipates continued pressure on consumers and a focus on value, but remains committed to supporting its brands and driving growth initiatives [11][47] Other Important Information - The company has made significant investments in its North American manufacturing footprint, including a $2 billion investment to build an advanced manufacturing facility and an automated distribution center [16] - The company has improved its cash conversion cycle from 6 days in 2021 to around negative 10 days at the close of 2025, reflecting better working capital discipline [43] - The company has achieved a strong overhead leverage, expanding adjusted operating profit margins by 100 basis points over the past two years [42] Q&A Session Summary Question: What are the expectations for the Kenvue acquisition? - Management expects the Kenvue acquisition to be quickly accretive to earnings and value-enhancing for shareholders, with a focus on achieving significant synergies [37][53] Question: How is the company addressing competitive pressures? - The company is maintaining a disciplined approach to innovation and marketing, focusing on delivering superior consumer value propositions to navigate competitive pressures [19][27] Question: What is the outlook for 2026? - The company projects mid- to high-single-digit constant currency adjusted EPS growth for 2026, supported by the Kenvue acquisition and ongoing operational improvements [47][48]

POWERING CARE Forward-Looking Statements Certain matters contained in this presentation 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, mark ...

Core Viewpoint - Kimberly-Clark reported a higher profit in its latest quarter just days before shareholders vote on its plan to buy Kenvue, aiming to create a global health-and-wellness giant [1] Financial Performance - The company achieved a higher profit in its latest quarter, indicating strong financial performance [1] Strategic Move - The planned acquisition of Kenvue is designed to enhance Kimberly-Clark's position in the health-and-wellness sector, reflecting a strategic initiative to expand its market presence [1]

Financial Performance - Net sales for Q4 2025 were $4.1 billion, down 0.6%, with organic sales growth of 2.1% offset by a 2.5% decline from exiting the private label diaper business in the US [4]. - Adjusted operating profit for Q4 2025 was $629 million, up 13.1% year-over-year, driven by strong productivity gains and lower expenses [7]. - Diluted earnings per share (EPS) for Q4 2025 were $1.50, with adjusted EPS increasing 24.0% to $1.86, reflecting strong operating profit delivery [11]. - Full year 2025 net sales were $16.4 billion, a decrease of 2.1%, primarily due to a 2.9% negative impact from divestitures and a 0.9% impact from foreign currency translation [12]. - Full year 2025 adjusted operating profit was $2.7 billion, in line with the prior year, despite headwinds from divestitures [15]. - Net income attributable to Kimberly-Clark Corporation for Q4 2025 was $499 million, representing an increase of 11.6% from $447 million in Q4 2024 [42]. - For the full year 2025, net sales were $16,447 million, down 2.1% from $16,805 million in 2024 [44]. - The operating profit for the full year 2025 decreased by 12.9% to $2,351 million, compared to $2,700 million in 2024 [44]. - Net income for the twelve months ended December 31, 2025, was $2,049 million, a decrease of 20.5% from $2,578 million in 2024 [48]. - Total net sales for the twelve months ended December 31, 2025, were $16,447 million, down 2.1% from $16,805 million in 2024 [50]. - Operating profit for the twelve months ended December 31, 2025, was $2,351 million, a decline of 12.9% compared to $2,700 million in 2024 [50]. Cash Flow and Capital Expenditures - Cash provided by operations in 2025 was $2.8 billion, down from $3.2 billion the previous year, while capital spending increased to $1.1 billion [31]. - Cash provided by operations for the twelve months ended December 31, 2025, was $2,777 million, down from $3,234 million in 2024 [48]. - Capital spending for the twelve months ended December 31, 2025, increased to $1,138 million from $721 million in 2024 [48]. - Cash dividends declared increased by 3.3% to $1.26 per share in Q4 2025, compared to $1.22 in Q4 2024 [42]. - Cash dividends paid for the twelve months ended December 31, 2025, were $1,660 million, slightly up from $1,628 million in 2024 [48]. Future Outlook - The company expects 2026 organic sales growth to align with or exceed the average growth in its competitive categories, projected at approximately 2% [32]. - Adjusted operating profit for 2026 is expected to grow at a mid-to-high single-digit rate on a constant-currency basis [32]. - Adjusted EPS from continuing operations for 2026 is expected to grow double-digit on a constant-currency basis, driven by a 30% increase in income from equity companies [32]. Shareholder Actions - The company completed share repurchases of 1.1 million shares at a cost of $141 million in 2025 [31]. Mergers and Acquisitions - The company is pursuing mergers with Kenvue and a joint venture with Suzano, which are expected to impact future growth and cost savings [37]. - The Kenvue acquisition is ongoing, with associated costs impacting financial results [58]. - Kenvue Acquisition added $32 million to Operating Profit in Q4 2025, with no contribution in Q4 2024 [62]. Operational Initiatives - The 2024 Transformation Initiative aims to enhance operational agility and improve growth trajectory and profitability [58]. - The 2024 Transformation Initiative contributed $90 million to Operating Profit in Q4 2025, compared to $97 million in Q4 2024 [62]. Tax and Legal Matters - The Effective Tax Rate as reported for the year ended December 31, 2025, was 29.2%, while the adjusted rate was 22.8% [64]. - The company reported a legal expense of $39 million in Q4 2024, which did not recur in Q4 2025 [62]. Other Financial Metrics - Basic earnings per share for Q4 2025 were $1.50, an increase of 11.9% from $1.34 in Q4 2024 [42]. - Income from Discontinued Operations for Q4 2025 was $142 million, up from $103 million in Q4 2024, a 37.9% increase [65]. - Organic sales growth for the year ended December 31, 2025, was 1.7%, with North America showing a growth of 1.8% and IPC at 1.7% [59]. - Total assets as of December 31, 2025, were $17,098 million, an increase from $16,546 million in 2024 [46]. - Current liabilities increased to $7,125 million in 2025 from $7,004 million in 2024 [46].

Kimberly-Clark exceeded quarterly profit expectations on Tuesday, helped by cost controls and steady demand for its products including Huggies diapers and Kleenex tissues. ...