Kimberly-Clark's Q1 Earnings Top Estimates, Organic Sales Down 1.6%

Kimberly-Clark Corporation KMB reported its first-quarter 2025 results, with the top line missing the Zacks Consensus Estimate but the bottom line exceeding the same. However, both metrics declined year over year. 

Kimberly-Clark’s results highlight the continued execution of its Powering Care strategy, with strong productivity gains and consumer-focused innovation driving competitive advantages. Despite rising global supply-chain costs, the company maintained alignment with its full-year plan, demonstrating operational discipline and strategic resilience. Management also provided updated guidance for 2025, factoring in evolving external conditions.

Kimberly-Clark Corporation Price, Consensus and EPS Surprise

Kimberly-Clark Corporation price-consensus-eps-surprise-chart | Kimberly-Clark Corporation Quote

Taking a Closer Look at KMB’s Q1 Results

The adjusted earnings were $1.93 per share, which beat the Zacks Consensus Estimate of $1.89. However, the bottom line declined 4% year over year due to reduced adjusted operating profit and net income from equity companies. These were somewhat offset by a lower adjusted effective tax rate. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Kimberly-Clark’s sales were $4,840 million, marking a 6% decline from $5,149 million in the same period last year. The figure was down from the Zacks Consensus Estimate of $4,864 million. Unfavorable foreign currency exchange rates negatively impacted sales by roughly 2.4%, as well as a combined 2% sales reduction due to the divestiture of the Personal Protective Equipment (“PPE”) business and the exit from the private label diaper business in the United States.

The company’s organic sales declined 1.6%, primarily due to a 1.5% decrease in pricing, while volume and mix remained flat year over year.

The adjusted gross margin reached 36.9%, marking a 20-basis point (bps) decrease.

Adjusted operating profit fell 6% to $844 million, including a 2.2% unfavorable impact from currency translation.

KMB Provides Q1 Insights by Segment

North America (“NA”) segment’s net sales reached $2,666 million, marking a 3.9% decline, due to the divestiture of the PPE business and the exit from the private label diaper business in the United States. Organic sales decreased 0.6%, mainly caused by a 0.6% unfavorable pricing impact, as the company focused on targeted investments in the price-pack architecture of its Baby and Child Care portfolio and enhancing value propositions in Professional.

NA’s operating profit was $676 million, reflecting a 1.3% increase. This was primarily due to strong productivity savings and optimized marketing, selling, research and general expenses. However, it was partially offset by the impacts of divestitures, business exits and planned investments in the price-value tiers of the portfolio.

The International Personal Care (“IPC”) segment’s net sales were $1,383 million, down 8.9%, with organic sales declining 2.8%. This decrease was mainly caused by price investments across markets as the company continued to enhance its value propositions.

IPC’s operating profit reached $194 million, marking a 19.8% decrease, which includes an unfavorable currency translation impact of 5%. The decline in operating profit was caused by planned investments in price-value tiers, resulting in negative pricing after cost inflation, partially offset by productivity savings.

The International Family Care & Professional (“IFP”) segment reported net sales of $791 million, a 7.7% decline, primarily due to divestitures, business exits and unfavorable currency impacts. Organic sales decreased 2.3%, caused by unfavorable price impacts of 2.6%, reflecting price investments to stay competitive across International Family Care markets.

IFP’s operating profit reached $106 million, reflecting a 3.6% decrease, mainly caused by unfavorable currency translation impacts, as favorable costs and strong productivity savings were offset by investments in price-value propositions.

Kimberly-Clark’s Financial Health Snapshot

This Zacks Rank #2 (Buy) 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.

For the three months ended March 31, cash provided by operations was $327 million. Management incurred capital spending of $204 million in the same time frame. The company returned $466 million to its shareholders via dividends and share buybacks.

What to Expect From KMB in 2025

In line with its long-term growth strategy, Kimberly-Clark expects 2025 organic sales growth to exceed the weighted average growth in the markets and categories it operates. These are currently growing between 1.5% and 2%, slightly below the 2% anticipated at the start of the year.

For 2025, the company’s net sales are expected to reflect a negative impact of approximately 200 bps from currency translation, an improvement from the previous forecast of 300 bps. Additionally, the divestiture of its PPE business and the exit from the private label diaper operations in the United States are expected to negatively impact sales by about 240 bps.

Adjusted operating profit is now expected to be flat to positive on a constant-currency basis compared with the previous expectation of high single-digit growth. This outlook continues to include a 320-bps negative impact from the PPE divestiture and the exit from the private label diaper business. Operating profit growth will also face a negative impact of approximately 200 bps from unfavorable currency rates compared with the previous forecast of 300 bps.

Adjusted earnings per share (EPS) are now expected to be flat to positive on a constant-currency basis, including a 320-bps adverse impact from the divestitures and a 100-bps negative impact from factors below operating profit, such as higher net interest expense, a higher effective tax rate and fewer shares outstanding. In addition, EPS is also expected to be negatively impacted by around 300 bps from currency translation, including the impact on income from equity interests compared with a previously estimated 350-400 basis points.

KMB stock has gained 10.3% in the past three months compared with the industry’s growth of 2%.

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The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1.9% and 485.7%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average.

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The Zacks Consensus Estimate for Utz Brands’ current financial-year sales and earnings indicates growth of 1.2% and 10.4%, respectively, from the year-ago numbers.

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The Zacks Consensus Estimate for BJ's Wholesale Club’s current fiscal-year sales and earnings implies growth of 5.8% and 4.4%, respectively, from the year-ago figures.

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