Kimberly-Clark Announces Third Quarter 2025 Results, Updates 2025 Outlook

Core Insights - Kimberly-Clark Corporation reported third quarter 2025 results driven by resilient consumer demand, innovative product introductions, and effective cost management [1][2][3] Financial Performance - Net sales for Q3 2025 were $4.2 billion, consistent with the prior year, with organic sales increasing by 2.5% due to a 2.4% volume growth [3][11] - Gross margin was reported at 36.0%, with an adjusted gross margin of 36.8%, reflecting a decline of 170 basis points year-over-year due to cost inflation and pricing pressures [4][10] - Operating profit for Q3 was $621 million, with adjusted operating profit at $683 million, remaining in line with the previous year despite challenges [5][12] - Diluted EPS attributable to Kimberly-Clark was $1.34, down from $2.69 in the prior year, while adjusted EPS was $1.82, broadly in line with the previous year [8][15] Year-to-Date Results - For the first nine months of 2025, sales totaled $12.4 billion, a decrease of 2.6%, primarily due to divestitures and foreign currency translation impacts [9][12] - Year-to-date gross margin was 36.0%, with an adjusted gross margin of 37.4%, down 130 basis points compared to the prior year [10][12] - Year-to-date operating profit was $1.8 billion, including $258 million in costs related to the 2024 Transformation Initiative, with adjusted operating profit at $2.1 billion, a decline of 3.2% [12][13] Business Segment Performance - North America net sales decreased by 0.8% in Q3, while organic sales grew by 2.7%, driven by strong volume growth [18][19] - International Personal Care (IPC) net sales increased by 1.9% in Q3, with organic sales growth of 2.1%, reflecting improvements in consumer value propositions [20][21] Cash Flow and Balance Sheet - Year-to-date cash provided by operations was $1.8 billion, down from $2.4 billion last year, attributed to lower operating profit [22][23] - Total debt as of September 30, 2025, was $7.3 billion, a decrease from $7.4 billion at the end of 2024 [23] 2025 Outlook - The company expects 2025 organic sales growth to align with the average growth in its competitive categories, projected at approximately 2% [25][26] - Adjusted operating profit is anticipated to grow at a low single-digit rate on a constant-currency basis, with a negative impact from divestitures and currency translation [26][27] - Adjusted free cash flow is expected to be approximately $2 billion in 2025 [28]