Kimberly-Clark Corporation ((KMB Quick QuoteKMB - Free Report) ) posted third-quarter 2025 results that reflected resilient consumer demand, steady volume growth and ongoing productivity gains, even as margin pressures persisted. Both the top and bottom lines came in broadly consistent with last year’s levels, underscoring the company’s continued progress under its Powering Care strategy.

Taking a Closer Look at KMB’s Q3 Results

Adjusted earnings per share (EPS) came in at $1.82, matching the prior-year period, while beating the Zacks Consensus Estimate of $1.45.

Net sales amounted to $4.2 billion, in line with the prior year. This included adverse impacts of about 2.2% from the exit of its private-label diaper business in the United States. Net sales beat the Zacks Consensus Estimate of $4.1 billion. Organic sales rose 2.5%, supported by a 2.4% increase in volume. The portfolio mix and pricing remained nearly flat year over year. We had forecasted 3.8% organic sales growth for the quarter.

The adjusted gross margin was 36.8%, down 170 basis points year over year, as cost inflation and tariff-related expenses offset productivity benefits. We predicted an adjusted gross margin contraction of 50 bps to 38%.

Adjusted operating profit totaled $683 million, essentially flat compared to the prior year. Reduced marketing, research and general expenses were countered by gross margin woes.

KMB Provides Quarterly Insights by Segment

The segments exclude the International Family Care and Professional ("IFP") business, which is reported as discontinued operations.

The North America (NA) segment posted net sales of $2.7 billion, down 0.8%, primarily due to business exits. Organic sales rose 2.7%, driven by a 2.6% volume increase, with continued strength in personal care innovations and market share gains. Operating profit of $640 million held steady year over year, supported by productivity improvements and disciplined cost management. Our model projected NA net sales growth of 0.3% for the quarter.

The International Personal Care (IPC) segment delivered $1.4 billion in sales, up 1.9%, with organic sales growth of 2.1% led by volume and mix improvement. Operating profit increased 6.5% to $214 million, aided by productivity gains and efficiency initiatives, partially offset by planned pricing investments. Our model projected IPC net sales growth of 1.2% for the quarter.

Kimberly-Clark’s Financial Health Snapshot

The company ended the quarter with cash and cash equivalents of $617 million, long-term debt of $6,470 million and total stockholders’ equity of $1,468 million.

Year-to-date cash provided by operations was $1.8 billion. Capital spending totaled $741 million in the same time frame, and the company returned $1.4 billion to shareholders through dividends and buybacks.

What to Expect From KMB in 2025?

In August, the company had revised its full-year outlook to reflect the reclassification of the IFP business as discontinued operations. Guidance for net sales, organic sales growth and adjusted operating profit now covers only the North America and International Personal Care segments, along with related overhead, excluding IFP. Adjusted EPS and adjusted free cash flow will continue to include IFP until the planned mid-2026 close of the joint venture with Suzano.

Kimberly-Clark expects organic sales growth for 2025 to be roughly in line with category and market growth trends, estimated at around 2%. Reported net sales are projected to face a 100-basis-point headwind from currency movements and a 290-basis-point drag from the divestiture of the PPE business and the U.S. private-label diaper exit.

Adjusted operating profit is forecasted to rise at a low single-digit rate on a constant-currency basis versus 2024. This includes an expected 380-basis-point headwind from business divestitures and a 70-basis-point impact of unfavorable foreign exchange.

Similarly, adjusted EPS is anticipated to increase at a low-to-mid single-digit rate on a constant-currency basis. This incorporates a 320-basis-point impact from divestitures and the diaper business exit, along with a 100-basis-point drag from higher interest expenses and tax rate, partially offset by fewer shares outstanding. The guidance also includes a positive 200-basis-point benefit (or roughly 16 cents per share) from the suspension of depreciation and amortization on assets held for sale within discontinued operations. Currency translation is expected to reduce EPS growth by approximately 150 basis points.

Management projects adjusted free cash flow of about $2 billion for 2025.

The Zacks Rank #4 (Sell) stock has lost 6.3% in the past three months compared with the industry’s 2.5% decline.

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