Kimberly-Clark(US:KMB) ZACKS·2025-12-16 17:36Core Insights - Kimberly-Clark Corporation's (KMB) third-quarter 2025 performance indicates that premiumization continues to drive growth despite modest category trends, marking the seventh consecutive quarter of volume-plus-mix-led growth [1][8] Group 1: Premiumization Strategy - The premiumization strategy has shown measurable results, with premium products in North America increasing from about 40% of the business a decade ago to just under 70% today, and in China, the premium mix rising from roughly 6% five years ago to over 40% [2] - The company is enhancing its premium growth by strengthening value offerings, improving product attributes while maintaining affordability, which helps defend volumes among value-seeking consumers [3] Group 2: Channel Dynamics - Strong growth in e-commerce and club channels supports the premiumization strategy, as KMB's premium mix and share are higher in these channels compared to traditional retail [4] - Selective promotions are being utilized to drive trials of innovations rather than instigating price wars, thereby protecting brand equity and long-term profitability [4] Group 3: Financial Performance and Valuation - KMB's shares have declined 20.2% over the past six months, compared to an 11.9% decline in the industry, while Procter & Gamble and Albertsons Companies saw declines of 8.4% and 18.1%, respectively [6] - The forward 12-month price-to-earnings ratio for KMB is 14.56, lower than the industry average of 17.98, indicating a discount compared to Procter & Gamble (20.20) and a premium over Albertsons Companies (7.80) [7] - The Zacks Consensus Estimate for KMB's 2025 earnings suggests a year-over-year decline of 16.4%, while the estimate for 2026 indicates a growth of 16.4, with recent adjustments reflecting a decrease of 12 cents per share for 2025 and an increase of 5 cents for 2026 [10]