Kimberly-Clark Corporation Q4 FY2025 earnings call

• Two years ago, Kimberly-Clark launched Power and Care to drive growth, making significant progress and accelerating momentum in 2025.
• Executed Powering Care, delivering solid volume plus mix performance in Q4, and exercising cost discipline while optimizing margin structure.
• Introduced consumer-directed innovation and breakthrough marketing, and rewired the organization for growth, including strengthening leadership and pivoting the portfolio to higher growth, higher margin personal care categories.
• Excited about the pending acquisition of Kenview, which will advance growth into higher growth, higher margin spaces and create a global health and wellness leader.

In 2025, Kimberly-Clark continued to advance volume plus mix growth, achieving an eighth consecutive quarter of solid volume plus mix performance in Q4. The company gained enterprise-weighted share and marked a second straight year of industry-leading productivity, with Q4 being the strongest of the year. It has been advancing its portfolio to higher growth, higher margin personal care categories.

• Organic sales growth is expected to be in line to ahead of the category in 2026.
• Expect margin expansion with productivity approaching 6% of cost of goods sold, and operating profit growth in the mid to high single-digit range.
• Adjusted EPS is expected to be in line with 2025 levels on a constant currency basis.
• The acquisition of Kenview is seen as a generational value creation opportunity.

• Consumer pressure and focus on value persistence pose challenges.
• Competitive environment may impact pricing and distribution.
• Partial loss of diapers and pull-ups distribution in North America club channel, starting in Q1, is a headwind of around 60 basis points for the full year.
• Input cost headwinds were experienced in previous years, though expected to be neutral in 2026.

Q: Bonnie Herzog from Goldman asked about the state of the consumer and category growth expectations.

A: Michael Hsu and Russell Torres responded that the company is growing due to focusing on delivering superior propositions at every rung of the good, better, best ladder, with category growth expected to be around 2% globally.

Q: Lauren Lieberman from Barclays asked about price and mix in North America.

A: Russell Torres discussed promo dynamics, club mix impact, and strategic investments in pack sizes, noting promo drives incremental consumption, club mix affects pricing, and strategic investments to sharpen competitiveness.

Q: Nik Modi from RBC Capital Markets asked about U.S. diaper category dynamics and Kenview acquisition timing.

A: Russell Torres talked about diaper category growth and share gains, and Michael Hsu discussed Kenview acquisition timing, with shareholder vote on the 29th and expected close in the back half of the year.

Q: Stephen Powers from Deutsche Bank asked about category growth pacing and margin targets.

A: Nelson Urdaneta and Michael Hsu discussed category growth pacing, with expectation of acceleration in the back half of 2026, and margin expansion expectations towards 40% gross margin by decade end.

Q: Christopher Carey from Wells Fargo Securities asked about evolution of medium-term expectations post-S-4.

A: Nelson Urdaneta and Michael Hsu discussed visibility into plans, impact of softer demand and club channel loss, and confidence in achieving margin targets.

Q: Michael Lavery from Piper Sandler asked about margin path to 40% gross and 18% EBIT.

A: Michael Hsu and Nelson Urdaneta talked about progress towards margin targets, productivity, and innovation driving margins.

Q: Robert Moskow from TD Cowen asked about margin cushion and pricing environment.

A: Nelson Urdaneta and Russell Torres discussed cost neutrality, productivity, and strategic pricing actions.

Q: Edward Lewis from Rothschild and Co. asked about international gross margin opportunity.

A: Michael Hsu and Russell Torres talked about international margin opportunities, focus on premium segments, share gains, and productivity in international markets