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-led organic growth and global share gains in FY25.

• Divested Brazilian tissue and PPE businesses, exited U.S. private label diaper business, and announced joint ventures with Suzano and IFP, supporting portfolio optimization.

• Announced pending Kenvue acquisition, expected to create a $32B global health & wellness leader, deliver $2.1B annual synergies, and drive significant EPS accretion by year two post-close.

• Embedded growth and accountability mindset led to 2% full-year volume-led organic growth, share gains in key markets, and stable earnings despite a turbulent environment.

• Innovation and marketing investments drove 78% of volume and mix-led growth from products launched in the last three years.

Financial highlights

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

• Adjusted gross margin improved to 37.3% in FY25, supported by 6.2% gross productivity savings.

• Adjusted operating profit margin expanded by 100 basis points over two years, reaching 14.8% in FY25.

• Leverage remained below 2x net debt to EBITDA, supporting a single-A credit rating.

Outlook and guidance

• 2026 targets 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 rising to $1.3B.

• Kenvue acquisition modeled conservatively, with synergy realization phased over three years and significant EPS accretion expected by 2028.

• Long-term algorithm aims for organic top-line growth ahead of categories and mid- to high-single-digit adjusted EPS CAGR from 2026 to 2028.

• Adjusted EPS attributable to the company expected to be flat due to reduced income from discontinued operations.