Why did Kimberly-Clark's first quarter net sales decline?

Net sales of $4.84 billion were down 6.0 percent. The filing attributes approximately 2.4 percent of the decline to foreign currency translation and approximately 2.0 percent to the combination of the PPE divestiture and the exit of the private label diaper business in the US. Organic sales decreased 1.6 percent, driven by a 1.5 percent decrease in price.

Why did the company lower its 2025 profit outlook?

Management said it reassessed its cost base, including potential impacts from changes in the global geopolitical landscape, and now expects greater costs across its global supply chain than it anticipated at the start of the year. The adjusted operating profit outlook moved from high single-digit growth to flat to positive on a constant-currency basis.

How did the segments perform in the quarter?

North America net sales were $2.67 billion, down 3.9 percent, with operating profit up 1.3 percent to $676 million. International Personal Care (IPC) net sales were $1.38 billion, down 8.9 percent, with operating profit down 19.8 percent to $194 million, reflecting price investments. International Family Care & Professional (IFP) net sales were $791 million, down 7.7 percent, with operating profit down 3.6 percent to $106 million.

What was the effect of the first quarter tax resolution on earnings?

The first quarter effective tax rate was 23.8 percent, in line with the prior year. On an adjusted basis, the rate was 21.4 percent compared with 23.6 percent in the prior year. The filing states that the first quarter of 2025 benefited from the resolution of certain tax matters.

How did the balance sheet and cash flow change?

Cash and cash equivalents fell to $563 million from $1,021 million at December 31, 2024. Total debt was $7.2 billion as of March 31, 2025, down from $7.4 billion. Capital spending was $204 million, and the company returned $466 million to shareholders through dividends and share repurchases.

KMB 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed April 22, 2025. Cited figures are marked; the original filing is the authoritative source.

Kimberly-Clark Corporation (NYSE: KMB) reported first quarter 2025 results on April 22, 2025, with net sales of $4.84 billion^a, down 6.0 percent from the prior year.

The decline was driven primarily by currency translation (approximately 2.4 percent) and the combined impact of the PPE divestiture and the exit of the private label diaper business in the US (approximately 2.0 percent). Organic sales decreased 1.6 percent, driven by a 1.5 percent decrease in price, while volume and mix were in line with the prior year. Operating profit was $769 million^b versus $853 million a year earlier, and adjusted operating profit was $844 million, down 6.0 percent.

Diluted EPS was $1.70^c on a reported basis versus $1.91, and adjusted EPS was $1.93, down 4.0 percent. Cash provided by operations was $327 million compared with $438 million. The company updated its 2025 outlook to reflect a reassessment of its cost base and potential impacts from the changing geopolitical landscape.

Adjusted operating profit is now expected to be flat to positive on a constant-currency basis, compared with a previous expectation of high single-digit growth. Adjusted EPS is now expected to be flat to positive on a constant-currency basis, and adjusted free cash flow is now expected to be approximately $2 billion^d, compared with a previous expectation of more than $2 billion. Reported net sales are forecast to reflect a negative impact of approximately 200 basis points from currency translation, improved from approximately 300 basis points previously.

Management stated that first quarter results were consistent with the full-year plan, but that greater supply chain costs are now expected relative to the beginning of the year. Management said it remains confident in offsetting these costs over time. Total debt was $7.2 billion as of March 31, 2025, down from $7.4 billion at December 31, 2024.

02—Key points

Key Highlights

Net sales of $4.84 billion declined 6.0 percent; organic sales fell 1.6 percent, with price down 1.5 percent and volume and mix flat.
Operating profit of $769 million fell 9.8 percent from $853 million; adjusted operating profit of $844 million was down 6.0 percent versus the prior year.
Diluted EPS of $1.70 compared with $1.91; adjusted EPS of $1.93 was down 4.0 percent, helped by a lower adjusted effective tax rate of 21.4 percent versus 23.6 percent.
2025 adjusted operating profit outlook was lowered to flat to positive on a constant-currency basis, from high single-digit growth previously.
2025 adjusted EPS outlook was lowered to flat to positive on a constant-currency basis, including a negative 320 basis point impact from the PPE divestiture and US private label diaper exit.
Adjusted free cash flow expectation for 2025 was revised to approximately $2 billion, from more than $2 billion previously.
Cash provided by operations was $327 million versus $438 million; total debt declined to $7.2 billion from $7.4 billion.

03—Questions

Frequently Asked Questions

Why did Kimberly-Clark's first quarter net sales decline?
Net sales of $4.84 billion were down 6.0 percent. The filing attributes approximately 2.4 percent of the decline to foreign currency translation and approximately 2.0 percent to the combination of the PPE divestiture and the exit of the private label diaper business in the US. Organic sales decreased 1.6 percent, driven by a 1.5 percent decrease in price.
Why did the company lower its 2025 profit outlook?
Management said it reassessed its cost base, including potential impacts from changes in the global geopolitical landscape, and now expects greater costs across its global supply chain than it anticipated at the start of the year. The adjusted operating profit outlook moved from high single-digit growth to flat to positive on a constant-currency basis.
How did the segments perform in the quarter?
North America net sales were $2.67 billion, down 3.9 percent, with operating profit up 1.3 percent to $676 million. International Personal Care (IPC) net sales were $1.38 billion, down 8.9 percent, with operating profit down 19.8 percent to $194 million, reflecting price investments. International Family Care & Professional (IFP) net sales were $791 million, down 7.7 percent, with operating profit down 3.6 percent to $106 million.
What was the effect of the first quarter tax resolution on earnings?
The first quarter effective tax rate was 23.8 percent, in line with the prior year. On an adjusted basis, the rate was 21.4 percent compared with 23.6 percent in the prior year. The filing states that the first quarter of 2025 benefited from the resolution of certain tax matters.
How did the balance sheet and cash flow change?
Cash and cash equivalents fell to $563 million from $1,021 million at December 31, 2024. Total debt was $7.2 billion as of March 31, 2025, down from $7.4 billion. Capital spending was $204 million, and the company returned $466 million to shareholders through dividends and share repurchases.

04—Continue

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