Kimberly-Clark Reports Q2 2025 Results, Raises Full-Year Outlook Amid Strong Volume Growth and Strategic Execution
Kimberly-Clark Corporation has released its financial results for the second quarter of 2025, highlighting strong performance driven by continued consumer demand, successful product innovations, and ongoing productivity improvements. The company also raised its full-year 2025 outlook, signaling confidence in its strategic direction and operational execution.
Chairman and CEO Mike Hsu praised the company’s performance, stating, “Our second quarter results are indicative of the exceptional progress we are making executing our Powering Care strategy. This was one of the most active and successful quarters in our recent history, fueled by the highest volume growth we’ve seen in five years.” Hsu emphasized that the strength of Kimberly-Clark’s brands, innovative product pipeline, and robust value propositions helped the company maintain and strengthen its market share across categories and pricing tiers.
He added, “Our strategy comes to life through our people—I’m proud of how our team continues to perform as we transform. Despite a dynamic operating environment, we are well-positioned to deliver a strong second year of our transformation.”
Key Financial Highlights – Q2 2025
Unless otherwise stated, the figures below refer to continuing operations and exclude results from the International Family Care and Professional (IFP) segment, which is now classified under discontinued operations.
- Net Sales: Kimberly-Clark reported $4.2 billion in net sales for the second quarter, down 1.6% compared to the prior year. This decline was largely attributed to the divestiture of the Personal Protective Equipment (PPE) business, the exit of the private label diaper segment in the U.S., and a 1.0% headwind from foreign currency translation. However, organic sales rose by 3.9%, driven by strong volume growth of 5.0%, partially offset by a 1.2% decline related to pricing and stable product mix.
- Gross Margin: Reported gross margin came in at 35.0%, inclusive of $82 million in charges linked to the company’s 2024 Transformation Initiative. Adjusted gross margin was 36.9%, down 180 basis points year-over-year. The decline reflected planned investments aimed at enhancing the value equation across the company’s portfolio, and increased costs from tariffs, which were only partially offset by productivity gains.
- Operating Profit: Operating profit for the quarter was $592 million, up from $539 million in Q2 2024. However, both years include transformation-related charges—$121 million in Q2 2025 and $190 million in Q2 2024. On an adjusted basis, operating profit totaled $713 million, a slight 2.2% decrease year-over-year.
- EPS: Reported diluted earnings per share (EPS) were $1.53, down from $1.61 in the same quarter last year. After adjusting for transformation and separation-related charges, adjusted EPS was $1.92, a 2.0% decline compared to Q2 2024.
- Tax and Equity Contributions: The effective tax rate for the quarter was 22.6%, up from 13.0% last year. On an adjusted basis, it stood at 20.9%, in line with the prior year’s 20.4%. Equity company income was $47 million, down from $63 million due to unfavorable currency movements.
- Discontinued Operations: Income from discontinued operations was $68 million, compared to $89 million last year, mainly due to $33 million in pre-tax separation costs. This was partially offset by reduced depreciation and amortization under discontinued operations accounting.
Year-to-Date Performance
For the first six months of 2025, Kimberly-Clark posted net sales of $8.2 billion, down 4.0% year-over-year. Organic sales increased by 1.2%, driven by volume gains of 2.3%, while price reductions impacted results by 1.2%. Foreign currency translation also negatively affected reported sales by 1.7%.
Year-to-date gross margin was 36.1%, which includes $135 million in transformation charges. Adjusted gross margin was 37.7%, a decline of 120 basis points. The margin pressure stemmed from price investments and tariffs, although strong productivity gains provided some relief.
Operating profit for the first half of 2025 was $1.2 billion, inclusive of $196 million in transformation costs. Adjusted operating profit totaled $1.4 billion, down 4.7% from the previous year. Currency translation had a 120-basis-point adverse impact.
The effective tax rate year-to-date was 23.1%, up from 18.8% last year. On an adjusted basis, the rate improved to 20.8% from 21.8% due to favorable resolution of tax matters.
Net equity income for the first half fell to $91 million from $124 million, primarily due to foreign exchange headwinds. Income from discontinued operations was $171 million, down from $191 million, with similar trends to those seen in the quarterly results.
Reported diluted EPS for the first half of 2025 was $3.23, compared to $3.52 last year. Adjusted EPS stood at $3.85, a 3.0% decline, including a 280-basis-point headwind from currency fluctuations.
Regional and Segment Performance
North America
In North America, net sales totaled $2.7 billion, down 1.9% year-over-year. Excluding the impact of the PPE business divestiture and exit from the private label diaper segment, organic sales rose 4.3%, largely due to 5.2% volume growth. Personal Care categories gained 60 basis points of weighted market share during the quarter.
Operating profit in the region declined 4.0% to $655 million, impacted by divestitures and exits. Nonetheless, core volume growth and productivity improvements partially offset these headwinds. Year-to-date operating profit declined 1.3%.
International Personal Care (IPC)
The IPC segment posted $1.4 billion in sales for Q2, up 0.4% from the prior year. Organic sales growth of 3.3% was led by volume gains of 4.8%, with favorable mix of 1.2% helping offset currency headwinds.
Operating profit for IPC fell 12.9% to $182 million, primarily due to pricing investments aimed at enhancing the product value proposition. Year-to-date operating profit dropped 16.7%.
