01—Abstract
Summary
Summary of the 10-Q filed August 1, 2025. Cited figures are marked; the original filing is the authoritative source.
Kimberly-Clark Corporation's Form 10-Q for the quarter ended June 30, 2025 shows net sales of $4.16 billiona for the three months, down 1.6% from $4.23 billion a year earlier, while organic sales increased 3.9%.
Operating profit rose to $592 millionb from $539 million, but adjusted operating profit fell 2.2% to $713 million, and diluted EPS from continuing operations was $1.33 versus $1.35. Net income attributable to Kimberly-Clark was $509 million, compared with $544 million. For the six months, net sales declined 4.0% to $8.22 billion, organic sales rose 1.2%, and diluted EPS from continuing operations was $2.72 versus $2.96.
Adjusted diluted EPS was $3.25c for the six months, down 4.7%. The filing reports that the company will form a joint venture with Suzano comprising substantially all of its former International Family Care and Professional (IFP) business. Suzano will acquire a 51% interest for approximately $1.7 billion, and Kimberly-Clark will retain 49%.
The transaction is expected to close in mid-2026, subject to regulatory approvals and other conditions. The IFP business is now reported as discontinued operations for all periods presented. Management estimates incremental 2025 tariff costs of about $170 milliond, mostly in North America, and the 2024 Transformation Initiative carries expected total costs of about $1.5 billion pre-tax, with cumulative charges through June 30, 2025 of $656 million.
Cash provided by operations fell to $1.10 billion for the six months from $1.46 billion, and financing outflows rose to $1.18 billion, driven by $250 million of debt repayments. Total debt from continuing operations was $7.2 billion at June 30, 2025, compared with $7.4 billion at December 31, 2024. Kimberly-Clark also settled a qui tam matter related to its former health care business, with a payment not expected to be material, and continues to cooperate with a related DOJ investigation.
02—Key points
Key Highlights
- Q2 2025 net sales were $4.16 billion, down 1.6%, while organic sales rose 3.9% on volume gains of 5.2%.
- Q2 2025 adjusted operating profit was $713 million, down 2.2%, and adjusted diluted EPS was $1.63, down 4.1% from $1.70.
- Q2 2025 GAAP diluted EPS from continuing operations was $1.33, versus $1.35 in the prior-year quarter.
- The IFP Transaction with Suzano involves a 51% sale of the joint venture for approximately $1.7 billion, with closing expected in mid-2026.
- Estimated incremental tariff costs for 2025 are approximately $170 million, most of which will be incurred by the North America segment.
- Cash provided by operations was $1.10 billion for the six months, down from $1.46 billion, due to lower operating profit and unfavorable working capital changes.
- Total debt from continuing operations was $7.2 billion at June 30, 2025, and the company repurchased 915 thousand shares for $120 million during the six months.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Kimberly-Clark kept $0.12.
- Revenue$4.16B100.0%
- Cost of revenue−$2.71B65.0%
- Gross profit$1.46B35.0%
- Operating costs−$864.0M20.8%
- Operating income$592.0M14.2%
- Interest, other & tax−$83.0M2.0%
- Net income$509.0M12.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed August 1, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $4.16B$4.23B | −1.6% |
| Cost of Revenue | $2.71B$2.64B | +2.7% |
| Gross Profit | $1.46B$1.59B | −8.7% |
| Operating Income | $592.00M$539.00M | +9.8% |
| Interest Expense | $67.00M$72.00M | −6.9% |
| Net Income | $509.00M$544.00M | −6.4% |
| EPS (Basic) | $1.53$1.61 | −5.0% |
| EPS (Diluted) | $1.53$1.61 | −5.0% |
| Shares Outstanding (Basic) | 332.10M337.10M | −1.5% |
| Shares Outstanding (Diluted) | 333.30M338.00M | −1.4% |
05—Questions
Frequently Asked Questions
What is the IFP Transaction and when is it expected to close?
Kimberly-Clark will form a joint venture with Suzano comprising substantially all of its former International Family Care and Professional business. Suzano will acquire a 51% interest for approximately $1.7 billion, subject to closing adjustments, and Kimberly-Clark will retain 49%. Closing is expected in mid-2026, subject to consultation requirements, customary conditions and regulatory approvals.
Why did adjusted operating profit decline despite higher reported operating profit?
Reported operating profit rose to $592 million from $539 million, but adjusted operating profit fell 2.2% to $713 million from $729 million. The decline reflected lower net sales and adjusted gross profit, partially offset by lower marketing, research and general expenses. Adjusted results exclude 2024 Transformation Initiative charges of $121 million in the quarter.
How large are the expected costs of the 2024 Transformation Initiative?
The company expects total pre-tax costs of approximately $1.5 billion, with about 60% in cash costs, primarily for workforce reductions and other program costs. Cumulative pre-tax charges through June 30, 2025 were $656 million. The initiative targets $3.0 billion in gross productivity savings and $200 million in SG&A expenses, and is expected to be completed by the end of 2026.
What is the financial impact of tariffs on Kimberly-Clark?
Management estimates incremental costs from new tariffs in effect in the U.S. and other markets at approximately $170 million for 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.
How did cash flow and liquidity change in the first half of 2025?
Cash provided by operations was $1.10 billion, down from $1.46 billion, reflecting lower operating profit and unfavorable working capital changes. Financing outflows were $1.18 billion, including $250 million of debt repayments. Total debt from continuing operations decreased to $7.2 billion from $7.4 billion, and the company has a $2.0 billion revolving credit facility and a $750 million revolving credit facility, both unused.
06—Continue