Kimberly-Clark (KMB) Q4 2025 Prepared Remarks earnings summary

Executive summary

• Powering Care strategy and transformation initiatives drove innovation, cost discipline, and a pivot to higher growth, higher margin Personal Care categories, resulting in broad-based volume growth and global share gains.

• Strategic actions included the sale of non-core businesses, a pending joint venture with Suzano, and the acquisition of Kenvue, expected to create a $32B global health & wellness leader with $2.1B in annual synergies.

• Embedded a growth and accountability mindset, delivering volume-led organic growth and share gains despite a dynamic environment.

• Investments in innovation, marketing, and digital capabilities differentiated products and deepened consumer engagement.

• Delivered solid operating profit and stable earnings, supported by productivity and cost management.

Financial highlights

• FY25 organic sales growth was 1.7%, with Q4 at 2.1%; adjusted free cash flow reached $1.9B.

• Adjusted operating profit grew 13.1% in Q4 and 0.1% for FY25; adjusted EPS grew 24.0% in Q4 and 3.2% for FY25.

• Adjusted gross margin improved to 37.3% in FY25, returning to pre-pandemic levels.

• Leverage (net debt/adj. EBITDA) stable at 1.8x in FY25, supporting a single-A credit rating.

• Industry-leading gross productivity at 6.2% of adjusted COGS for the year.

Outlook and guidance

• 2026 targets include organic growth in line to ahead of category growth (~2%), mid- to high-single-digit constant-currency adjusted operating profit growth, and double-digit adjusted EPS growth from continuing operations.

• Adjusted free cash flow expected to remain around $2B, with capital investments increasing to $1.3B.

• Kenvue acquisition expected to generate $2.1B in annual synergies, with significant EPS accretion by year two post-close.

• Long-term algorithm targets mid- to high-single-digit adjusted EPS growth on a two-year CAGR from 2026 to 2028.