Kimberly-Clark Beats EPS, Misses Revenue
Kimberly-Clark (NYSE:KMB), a leading global supplier of essential consumer tissue and personal care products, released its earnings for Q1 2025 on April 22. The results showed a mixed performance with a Non-GAAP earnings per share (EPS) of $1.93, exceeding analyst estimates of $1.90. The company's revenue (GAAP) amounted to $4.84 billion, falling short of the projected $4.89 billion. This discrepancy was primarily attributed to negative impacts from currency translation and divestiture activities. Despite the revenue shortfall, the quarter showcased effective cost management and strategic initiatives, highlighting a complex but navigable landscape for the company.
| Metric | Q1 2025 | Q1 Estimate | Q1 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.93 | $1.90 | $2.01 | -4.0% |
| Revenue (GAAP) | $4.84B | $4.9B | $5.15B | -6.0% |
| Gross Margin (Non-GAAP) | 36.9% | N/A | 37.1% | -0.2 pp |
| Net Income (GAAP) | $567M | N/A | $647M | -12.4% |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview
Kimberly-Clark, known for brands like Huggies, Kleenex, and Kotex, operates globally with products in essential consumer categories. Strategic initiatives have centered around supply chain optimization, which aims to improve operational efficiency and cost management.
The company's sustainability commitment remains a key part of its strategy, aspiring to reduce the environmental impact of its products. Kimberly-Clark is also investing in innovative product development, evident by its acquisitions, like Thinx Inc., which support growth in modern product categories.
Quarterly Performance
Kimberly-Clark’s most notable achievement was surpassing its EPS expectations, reporting $1.93 (Non-GAAP) against the anticipated $1.90. Effective cost management and tax benefits largely contributed to this positive earnings surprise. The company's adjusted gross margin slightly declined to 36.9%, down 20 basis points from the prior year.
Revenue, however, decreased by 6.0% year-over-year to $4.84 billion (GAAP), falling short of estimates by $52 million. The underperformance stemmed from currency impacts and structural changes due to divestitures, including exiting the private label diaper business, which affected organic sales by 1.6%.
From a geographic standpoint, North American sales decreased by 3.9%. International Personal Care saw an 8.9% decline, influenced by unfavorable currency effects. Despite these declines, Kimberly-Clark managed notable operational improvements, thanks to its efficiency-focused transformation initiative.
No major one-time events were reported, but the company continues to emphasize innovation and efficiency to maintain its competitive edge, focusing instead on reinforcing core business stability and future growth opportunities.
Looking Ahead
Looking ahead, Kimberly-Clark has adjusted its outlook for 2025, anticipating flat to modest improvement in adjusted operating profit and EPS on a constant-currency basis. This cautious outlook reflects ongoing cost challenges, geopolitical considerations, and moderated economic forecasts.
Investors should focus on the company’s execution of its strategic initiatives, particularly its supply chain optimization and continued investment in product innovation. The company's ability to harness its brand strength and manage global market conditions will be pivotal in shaping its financial performance in the ensuing quarters.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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