01—Abstract
Summary
Summary of the 10-Q filed April 22, 2025. Cited figures are marked; the original filing is the authoritative source.
Kimberly-Clark Corporation's first-quarter 2025 results show lower sales and profitability compared with the first quarter of 2024.
Net sales were $4.84 billiona, down 6.0%, driven primarily by unfavorable currency impacts, divestitures and business exits, and lower organic sales, which decreased 1.6% on lower pricing while volume and mix were flat. Operating profit fell 9.8% to $769 million, and net income attributable to Kimberly-Clark declined 12.4% to $567 million. Diluted EPS was $1.70, down 11.0%.
Adjusted EPS, which excludes 2024 Transformation Initiative charges, was $1.93b, down 4.0%, and adjusted operating profit was $844 million, down 6.0%. The company is pursuing its 2024 Transformation Initiative, expected to be completed by the end of 2026, with total pre-tax costs of approximately $1.5 billion and pre-tax gross productivity savings expected to be $3.0 billion. Cumulative pre-tax charges through March 31, 2025 were $534 million.
The filing estimates incremental tariff-related costs of approximately $300c in 2025, most of which will be incurred by the North America segment. Cash provided by operations was $327 million compared with $438 million a year earlier, reflecting lower operating profit and unfavorable working capital changes. Total debt was $7.2 billion at March 31, 2025, versus $7.4 billion at December 31, 2024.
02—Key points
Key Highlights
- Net sales of $4.84 billion declined 6.0% year over year; organic sales decreased 1.6%, driven by lower pricing, while volume and mix were flat.
- Operating profit of $769 million decreased 9.8%; adjusted operating profit of $844 million decreased 6.0%, excluding $75 million of 2024 Transformation Initiative charges.
- Diluted EPS of $1.70 decreased 11.0%; adjusted EPS of $1.93 decreased 4.0%. The adjusted effective tax rate was 21.4% versus 23.6%, partly due to the resolution of certain tax matters.
- Gross margin was 35.8%, down 130 basis points, including approximately 110 basis points of 2024 Transformation Initiative charges; adjusted gross margin was 36.9%.
- Estimated incremental tariff costs of approximately $300 in 2025, most of which will be incurred by the North America segment; the company is evaluating its ability to offset a portion of these costs.
- Cash provided by operations fell to $327 million from $438 million; capital spending was $204 million, and full-year capital spending is expected to be $1.0 to $1.2 billion.
- Share repurchases totaled 458 thousand shares for $61 million in the quarter, and total debt decreased to $7.2 billion from $7.4 billion, with $250 million of debt repayments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Kimberly-Clark kept $0.14.
- Revenue$4.05B100.0%
- Cost of revenue−$2.54B62.8%
- Gross profit$1.51B37.2%
- Operating costs−$878.0M21.7%
- Operating income$631.0M15.6%
- Interest, other & tax−$64.0M1.6%
- Net income$567.0M14.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed April 22, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $4.05B$4.33B | −6.3% |
| Cost of Revenue | $2.54B$3.24B | −21.4% |
| Gross Profit | $1.51B$1.69B | −10.5% |
| Operating Income | $631.00M$853.00M | −26.0% |
| Interest Expense | $64.00M$67.00M | −4.5% |
| Net Income | $567.00M$647.00M | −12.4% |
| EPS (Basic) | $1.71$1.92 | −10.9% |
| EPS (Diluted) | $1.70$1.91 | −11.0% |
| Shares Outstanding (Basic) | 331.80M336.90M | −1.5% |
| Shares Outstanding (Diluted) | 333.30M338.30M | −1.5% |
05—Questions
Frequently Asked Questions
Why did Kimberly-Clark's net sales and profits decline in the first quarter of 2025?
Net sales decreased 6.0% to $4.84 billion, primarily due to unfavorable currency impacts, divestitures and business exits, and lower organic sales. Organic sales fell 1.6% due to lower pricing from ongoing strategic investments in price-pack architecture and value propositions. Operating profit declined 9.8%, reflecting lower net sales and adjusted gross profit, partially offset by lower marketing, research and general expenses.
What is the 2024 Transformation Initiative and what does it cost?
The 2024 Transformation Initiative is designed to sharpen strategic focus, optimize the margin structure, and streamline the organization. It is expected to be completed by the end of 2026, with total pre-tax costs of approximately $1.5 billion, about half of which are cash costs, primarily for workforce reductions. Workforce reductions are expected to be in the range of 4% to 5%. Total pre-tax savings are expected to be $3.0 billion in gross productivity and $200 in selling, general and administrative expenses. Cumulative pre-tax charges through March 31, 2025 were $534 million.
How are the new U.S. tariffs expected to affect the company?
Based on preliminary analysis, the company estimates incremental costs of approximately $300 in 2025, most of which will be incurred by the North America segment. Management is continuing to evaluate these developments and its ability to offset a portion of these costs.
How did the company's cash flow and balance sheet change?
Cash provided by operations was $327 million compared with $438 million in the prior year, reflecting lower operating profit and unfavorable operating working capital changes, including higher cash payments related to the 2024 Transformation Initiative. Cash and cash equivalents were $563 million at March 31, 2025, down from $1.02 billion at year-end 2024. Total debt was $7.2 billion, compared with $7.4 billion at December 31, 2024, and the company repaid $250 million of debt during the quarter.
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