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]

Financial Data and Key Metrics Changes - The third quarter results indicate strong progress in transforming Kimberly-Clark into an industry-leading personal care company, with consistent operating margin expansion and industry-leading productivity [6][8] - The company achieved its seventh consecutive quarter of volume plus mix-led growth, despite challenges in the broader consumer packaged goods (CPG) industry [6][8] Business Line Data and Key Metrics Changes - In North America, Kimberly-Clark gained 10 basis points of market share in diapers during the third quarter, with a year-to-date increase of 90 basis points [15][19] - The promotional activity in North America is lower than pre-2019 levels, with a focus on driving trial for innovation rather than expanding categories [16][18] Market Data and Key Metrics Changes - The company is experiencing double-digit growth in the club channel, driven by consumer shifts and changes in assortment [19] - Digital channels accounted for 100% of growth in North America, with a 7-point share benefit compared to brick-and-mortar [44] Company Strategy and Development Direction - Kimberly-Clark's strategy is centered on innovation-led growth, focusing on improving products across the good, better, best spectrum [12][75] - The company aims to achieve a gross margin of at least 40% and an operating profit of 18% to 20% by the end of the decade [33][82] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer purchasing power is under pressure, but demand for essential categories remains resilient [51] - The company is confident in its ability to mitigate stranded costs from the IFB transaction and expects to see a step-up in growth in adjusted EPS from continuing operations [32][34] Other Important Information - The company is working to reduce volatility in fiber costs through a joint venture with Suzano, which is expected to stabilize input costs [80][82] - The company is committed to driving premiumization across its product lines, with a significant increase in the premium mix in both North America and China [75][76] Q&A Session Summary Question: Update on competitive dynamics in U.S. diapers - Management acknowledged increased competitive activity but noted solid performance and a slight market share gain in diapers [12][15] Question: Shape of the P&L in 2026 and 2027 - Management indicated it is premature to provide detailed guidance but emphasized targeting organic growth ahead of categories [32][33] Question: Performance in North America relative to trends - Management explained that hurricane-related shipment dynamics and promotional timing contributed to stronger performance in the quarter [42][43] Question: Promotional activity in North America - Management stated that promotional activity is a tactic to drive trial and that they are focused on strengthening value propositions [51][52] Question: Cost outlook and tariff impacts - Management reported a reduction in gross tariffs and ongoing efforts to mitigate costs, expecting improvements in Q4 and early 2026 [59][60] Question: Competition in the ultra-premium diaper segment - Management expressed confidence in their technology and innovation pipeline, aiming to compete effectively across all tiers [75][76]