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    KMB
    Earnings call· Dec 2025(Q4 FY25)

    KIMBERLY CLARK CORP KMB

    Jan 27, 2026 Source

    Executive summary

    Kimberly-Clark Q4 FY25 — Strong Volume-Plus-Mix Growth and Strategic Acquisitions

    Kimberly-Clark concluded FY25 with strong volume-plus-mix growth, driven by innovation and strategic pricing across all tiers, despite a challenging consumer environment and increased promotional activity. The company is advancing its Powering Care strategy, focusing on productivity and brand investment, and is on track with its Kenvue acquisition and IFP transaction, which are expected to transform its portfolio towards higher growth and margin categories. Management expressed confidence in its long-term margin targets and innovation pipeline for continued growth.

    Highlights

    5

    • Delivered an eighth consecutive quarter of solid volume-plus-mix performance in Q4 FY25, up 1.7%.

    • Gained enterprise weighted share, including 100 basis points in North America diapers in Q4 FY25.

    • Marked a second straight year of industry-leading productivity, with Q4 FY25 being the strongest of the year, approaching 6% of COGS for FY26.

    • Shareholder vote for Kenvue acquisition is well in excess of 90% in favor, indicating strong investor support.

    • International Personal Care (IPC) markets showed significant share growth, with China diapers up 270 bps, Indonesia femcare up almost 200 bps, and Korea up 60 bps in Q4 FY25.

    Concerns

    4

    • Partial loss of diapers and Pull-Ups distribution in the North America club channel, starting Q1 FY26, expected to be a 60 basis point headwind to full-year growth.

    • Softer-than-anticipated demand in North America and enterprise markets in Q4 FY25 resulted in a lower base of volumes and EBITDA for FY25.

    • Pricing in North America took another step back in Q4 FY25 due to promotional dynamics, club mix shift, and strategic price-pack adjustments.

    • FY25 gross margin was impacted by $200 million in unexpected input costs, including tariffs.

    Guidance & targets

    13
    CategoryTargetConfidence
    Full-year 2026 Organic Sales Growth
    at or above global weighted average category growth globally
    high materiality
    High
    Full-year 2026 Operating Profit Growth
    at the higher end of our mid- to high single-digit range
    high materiality
    High
    Full-year 2026 Adjusted EPS
    in line with 2025 levels on a constant currency basis
    high materiality
    High
    Full-year 2026 Gross Productivity
    approach 6% of cost of goods sold
    medium materiality
    High
    Gross Margin Target
    at least 40%
    high materiality
    High
    Operating Profit Margin Target
    at least 18% to 20%
    high materiality
    High
    Kenvue Acquisition Close Timing
    somewhere in the back half
    high materiality
    High
    IFP Transaction Close Timing
    midyear closing this year
    high materiality
    High
    Full-year 2026 Diaper Distribution Loss Headwind
    around 60 basis points
    medium materiality
    High
    Full-year 2026 Net Sales Pacing
    first half and the second half to be roughly 50-50
    low materiality
    Medium
    Full-year 2026 Organic Growth Pacing
    accelerate in the back half versus the first half of the year
    low materiality
    Medium
    Full-year 2026 Input Costs
    largely flat
    medium materiality
    High
    Full-year 2026 Income from Discontinued Operations (IFP)
    roughly half of what we saw in 2025 levels
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    North America
    Experienced promotional activity and club channel mix shift impacting pricing. Diaper share grew for two consecutive years. Expect partial loss of diaper and Pull-Ups distribution in club channel starting Q1 FY26.
    Volume/Mix Growth: 1.7% (Q4 FY25)Volume/Mix Growth (2-year stack): 3.6% (Q4 FY25)Diapers Share Growth: 100 bps (Q4 FY25)
    		————
    International Personal Care (IPC)
    Demonstrated significant share growth across key markets. Management sees international margins as an opportunity, focusing on developing the premium segment and leveraging global scale for productivity. Expects positive volume and mix-led growth ahead of category in FY26, with operating profit dollar and margin gains.
    Weighted Share Growth (top 6 focus markets): 50 bps (Q4 FY25)China Diapers Share Growth: 270 bps (Q4 FY25)Indonesia Femcare Share Growth: almost 200 bps (Q4 FY25)Korea Share Growth: 60 bps (Q4 FY25)Australia Share Growth: 50 bps (Q4 FY25)Brazil Share Growth: 40 bps (Q4 FY25)Brazil Diapers Organic Growth: mid-single digit (Q4 FY25)South Korea Diapers Organic Growth: positive (Q4 FY25)Indonesia Organic Growth: positive (Q4 FY25)
    		————

    Operational metrics

    9
    Volume-plus-mix performance
    1.7%eighth consecutive quarter of solid performance
    Q4 FY25

    Reflects the company's compelling offering and focus on strengthening value propositions.

    Productivity
    industry-leadingsecond straight year
    FY25

    Q4 FY25 was the strongest quarter for productivity.

    North America Volume/Mix Growth
    1.7%
    Q4 FY25

    This growth was achieved despite promotional dynamics and club mix shifts.

    North America Volume/Mix Growth (Full Year)
    2.1%
    FY25

    Reflects full year performance in North America.

    Weighted Global Average Category Growth
    0.6%down from 2% in Q1-Q3
    Q4 FY25

    Discrete factors, particularly in North America, weighed on this drop.

    Input Costs
    $200 million
    FY25

    These unexpected costs impacted gross margin in FY25.

    Promotional Activity
    below category and 2019 levels
    FY25

    KMB rephased some planned activation activity into Q4 FY25 due to competitive activity.

    Gross Margin Progression
    not linear
    Quarterly/Year-on-year

    Management noted that margin progression is not expected to be linear but strong progress has been made over the last two years.

    Income from Discontinued Operations
    roughly half of 2025 levelsvs 2025
    FY26

    This reduction will offset underlying growth in adjusted EPS for FY26.

    Industry KPIs

    8
    MetricValueDetails
    Sg a ratediscipline on SG&A savings
    Organic sales growth1.7%%
    Regional emerging market growthmid-single digit (Brazil diapers); positive (South Korea diapers); positive (Indonesia)%
    Advertising marketing investmentincreasing investment
    Commodity input cost sensitivity$200 million (FY25); largely flat (FY26)USD
    Innovation new product contributionrobust pipeline
    Category growth benchmark market sharegained enterprise weighted share
    Core underlying EPS and operating marginin line with 2025 levels (EPS); at least 18% to 20% (Operating Margin)%

    Deals & partnerships

    2
    KenvueAcquisition to advance trajectory toward higher growth, higher margin spaces and create a global health and wellness leader.

    Shareholder vote on January 29th expected to be overwhelmingly in favor (over 90% already voted). U.S. antitrust filing submitted, international filings by early February. Regulatory process on track.

    IFP (International Paper)Transaction to create a better business for both entities longer term.

    Transaction remains on track for midyear closing, subject to regulatory approvals.

    Risks & headwinds

    5
    Persistent consumer pressure and focus on valuePersisting

    Resulted in more choppy month-to-month consumption data.

    Mitigation: Delivering superior propositions across all price tiers through innovation, strengthening offerings, and expanding categories globally.

    Partial loss of diaper and Pull-Ups distribution in North America club channelStarting Q1 FY26

    Expected headwind of around 60 basis points for full-year FY26 growth.

    Mitigation: Factored into full-year outlook; continued execution of strategy focused on differentiated brand value propositions.

    Softer-than-anticipated demand in North America and enterprise marketsQ4 FY25

    Resulted in a lower base of volumes and EBITDA for FY25.

    Mitigation: Reflected in the FY26 outlook.

    Unexpected input costs and tariffsFY25

    Around $200 million of input costs in FY25, including unexpected tariff-related headwinds.

    Mitigation: Input costs are expected to be largely flat in FY26.

    Competitive promotional activity and pricing pressure in North AmericaQ4 FY25

    Pricing took another step back in Q4 FY25.

    Mitigation: Rephased innovation-related promotional activity, strategic price-pack adjustments, and focus on PNOC discipline and innovation-led growth.

    What to watch in Q1 FY26

    4

    Kenvue Acquisition Shareholder Vote

    This week
    Currentwell in excess of 90% in favor
    TargetFormal approval

    Why it matters

    Confirms investor support for the strategic acquisition, a key step towards closing.

    The shareholder vote is on the 29th this Thursday. I will tell you -- I expect the vote to reflect the very positive feedback we've heard from our investors. And so through yesterday, a pretty good chunk of shareholders have already voted, and it's well in excess of 90% in favor.

    Q&A highlights

    5

    How is KMB growing volumes when others struggle, what are 2026 category growth expectations, and is end-market growth needed for EBIT guidance?

    KMB focuses on delivering superior value propositions across all price tiers, driven by innovation. They expect global category growth around 2% for 2026, which is resilient for their categories. Their strategy allows them to grow volumes even without significant category acceleration.

    “I think our '26 kind of implies, our category outlook is around 2% globally, plus or minus.”

    asked by Bonnie Herzog · answered by Michael Hsu

    2 min read6 chapters

    Detailed Narrative

    01

    Powering Care Strategy Progress

    Kimberly-Clark's "Powering Care" strategy, launched two years ago, is driving strong results and accelerating momentum. The company has advanced its volume-plus-mix growth model, achieved industry-leading productivity, and rewired its organization for growth. This strategy has positioned the company for future growth and is expected to be compounded by the pending Kenvue acquisition.

    02

    Consumer Environment and Value Proposition

    Management acknowledges persistent pressure on consumers and a focus on value. Kimberly-Clark is addressing this by delivering superior propositions at every price tier ("good, better, best") through innovation and competitive cost structures. This approach has enabled volume growth despite the challenging environment, with a robust pipeline of future innovations.

    03

    Diaper Category Dynamics

    The U.S. diaper category is experiencing shifts, notably a major club player moving away from branded exclusivity, leading to a partial loss of Kimberly-Clark's diaper and Pull-Ups distribution in that channel starting Q1 FY26. Despite this, the company gained share in North America diapers in Q4 FY25 and globally in key markets like China, Korea, Brazil, and Indonesia, driven by its innovation strategy.

    04

    Gross Margin Trajectory and Drivers

    The company expects gross margins to expand in FY26, driven by largely flat input costs (compared to $200 million in unexpected costs in FY25) and continued high productivity, targeting around 6% of COGS. Strategic price-pack architecture and channel price investments made in late FY24 will also lap, contributing to the expected margin improvement.

    05

    Kenvue Acquisition Update

    The shareholder vote for the Kenvue acquisition, scheduled for January 29th, is expected to be overwhelmingly in favor, with over 90% of shareholders already having voted positively. The regulatory process is on track, and the acquisition is still expected to close in the second half of FY26. Management remains confident in the generational value creation opportunity and plans significant investments into Kenvue's brands post-acquisition.

    06

    Innovation Pipeline

    Kimberly-Clark is highly optimistic about its innovation pipeline, stating that the next three years' innovation is more exciting than the past three. This robust pipeline is expected to drive meaningful step-up in volume-plus-mix growth as new launches roll out throughout FY26, particularly accelerating in the second half of the year.

    AI-generated summary of the company’s earnings call. Not investment advice.