01—Abstract
Summary
Summary of the 10-Q filed October 30, 2025. Cited figures are marked; the original filing is the authoritative source.
Kimberly-Clark Corporation's third-quarter 2025 Form 10-Q shows net sales of $4.15 billiona for the three months ended September 30, 2025, essentially flat versus $4.14 billion a year earlier, with organic sales up 2.5% on volume gains of 2.4%.
Operating profit fell to $621 millionb from $1.03 billion, and net income attributable to Kimberly-Clark dropped to $446 million from $907 million. The decline reflects unfavorable pricing net of cost inflation (including tariff impacts), supply chain investments, and a $565 million gain on the 2024 sale of the PPE business that did not recur. Diluted EPS from continuing operations was $1.01 versus $2.42, and adjusted diluted EPS was $1.45 versus $1.56, a 7.1% decrease.
The quarter's GAAP earnings were also pressured by a 45.4% effective tax rate, driven by about $130 millionc of incremental tax charges tied to the One Big Beautiful Bill Act, mainly a valuation allowance on U.S. foreign tax credits. For the nine months, net sales were $12.37 billion, down 2.6%, and diluted EPS from continuing operations was $3.73 versus $5.37. Cash provided by operations was $1.81 billion versus $2.42 billion, and cash balances fell to $617 million from $1.01 billion at year-end 2024.
The pending International Family Care and Professional (IFP) transaction with Suzano, under which Buyer will acquire a 51% interest in a joint venture for approximately $1.7 billiond while the company retains 49%, is expected to close in mid-2026. The IFP business is reported as discontinued operations, and the 2024 Transformation Initiative carries total expected pre-tax costs of approximately $1.5 billion, with cumulative charges of $718 million through September 30, 2025.
02—Key points
Key Highlights
- Net sales were $4.15 billion in Q3 2025, flat versus $4.14 billion in Q3 2024; organic sales grew 2.5%, driven by volume gains of 2.4%.
- Operating profit fell to $621 million from $1.03 billion, largely due to the absence of the $565 million PPE business sale gain and unfavorable pricing net of cost inflation, including tariffs.
- Diluted EPS from continuing operations was $1.01 versus $2.42; adjusted diluted EPS was $1.45 versus $1.56, a 7.1% decrease.
- The Q3 effective tax rate was 45.4%, reflecting about $130 million of incremental tax charges from the One Big Beautiful Bill Act, mainly a valuation allowance on U.S. foreign tax credits.
- Cash provided by operations was $1.81 billion for the nine months versus $2.42 billion, and cash and equivalents declined to $617 million from $1.01 billion at December 31, 2024.
- The IFP transaction with Suzano, valued at approximately $1.7 billion for a 51% stake in the joint venture, is expected to close in mid-2026, with the IFP business reported as discontinued operations.
- The Department of Justice investigation related to surgical gowns from former Avanos/Halyard business was resolved through a Deferred Prosecution Agreement, with payments not expected to materially affect financial results.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Kimberly-Clark kept $0.11.
- Revenue$4.15B100.0%
- Cost of revenue−$2.66B64.0%
- Gross profit$1.49B36.0%
- Operating costs−$872.0M21.0%
- Operating income$621.0M15.0%
- Interest, other & tax−$175.0M4.2%
- Net income$446.0M10.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed October 30, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $4.15B$4.14B | +0.1% |
| Cost of Revenue | $2.66B$2.58B | +3.0% |
| Gross Profit | $1.49B$1.56B | −4.5% |
| Operating Income | $621.00M$1.03B | −39.5% |
| Interest Expense | $65.00M$67.00M | −3.0% |
| Net Income | $446.00M$907.00M | −50.8% |
| EPS (Basic) | $1.34$2.70 | −50.4% |
| EPS (Diluted) | $1.34$2.69 | −50.2% |
| Shares Outstanding (Basic) | 331.80M335.70M | −1.2% |
| Shares Outstanding (Diluted) | 333.10M337.20M | −1.2% |
05—Questions
Frequently Asked Questions
Why did Kimberly-Clark's operating profit decline so sharply in Q3 2025?
Operating profit was $621 million versus $1,026 million in the prior year. The prior-year quarter included a $565 million gain on the sale of the PPE business and a $97 million intangible impairment. Current results were also reduced by unfavorable pricing net of cost inflation, including tariff impacts, and supply chain investments, partly offset by gross productivity savings of approximately $125 million and lower marketing, research and general expenses.
What drove the high effective tax rate in the third quarter?
The effective tax rate was 45.4% versus 19.4% a year earlier. The increase was primarily driven by incremental tax charges of approximately $130 million from the One Big Beautiful Bill Act, mainly a valuation allowance on current and prior-year U.S. foreign tax credits. The adjusted effective tax rate was 26.5%.
What is the status of the IFP transaction with Suzano?
Kimberly-Clark will form a joint venture with Suzano comprising substantially all of the former IFP segment. Buyer will acquire a 51% interest for approximately $1.7 billion, and the company will retain 49%. Closing is expected in mid-2026, subject to consultation requirements, customary conditions and regulatory approvals. Separation costs were $17 million in Q3 and $50 million for the nine months.
How is Kimberly-Clark's cost-reduction program progressing?
The 2024 Transformation Initiative is expected to be completed by the end of 2026 with total pre-tax costs of approximately $1.5 billion, about 60% of which are cash costs. Cumulative pre-tax charges through September 30, 2025 were $718 million. Charges were $62 million in Q3 2025 versus $124 million in Q3 2024. Expected pre-tax savings are $3.0 billion in gross productivity and $200 million in SG&A.
How did tariffs affect the company's outlook and costs?
Management estimates the incremental costs of new tariffs in effect in the U.S. and other markets at approximately $100 million 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.
06—Continue