Kimberly-Clark Reports 6% Decline in Net Sales for Q1 2025

Kimberly-Clark Corporation reported a decline in financial performance for the first quarter of 2025, with net sales of $4.84 billion, down 6.0% from $5.15 billion in the same period last year. The decrease was attributed to unfavorable currency impacts, divestitures, and lower organic sales, which fell by 1.6%. Gross profit also decreased by 9.3% to $1.73 billion, resulting in a gross margin of 35.8%, down from 37.1% a year earlier. Operating profit for the quarter was $769 million, a 9.8% decline compared to $853 million in the prior year.

The company's net income attributable to Kimberly-Clark Corporation was $567 million, down 12.4% from $647 million in the first quarter of 2024. Diluted earnings per share decreased to $1.70 from $1.91, reflecting the overall decline in profitability. The effective tax rate for the quarter was 23.8%, slightly higher than the 23.6% reported in the previous year. Adjusted earnings per share, which exclude certain items, fell to $1.93 from $2.01.

In terms of operational developments, Kimberly-Clark is undergoing a significant transformation initiative aimed at improving efficiency and reducing costs. The 2024 Transformation Initiative is expected to impact the organization across all major geographies, with workforce reductions anticipated to be between 4% and 5%. The initiative is projected to incur total costs of approximately $1.5 billion pre-tax, with cumulative pre-tax charges of $534 million recorded through March 31, 2025. The company has also realigned its internal operating structure into three reportable segments: North America, International Personal Care, and International Family Care and Professional.

Geographically, net sales in North America decreased by 3.9% to $2.67 billion, primarily due to the sale of the PPE business and the exit of the private label diaper business. In the International Personal Care segment, sales fell by 8.9% to $1.38 billion, impacted by unfavorable currency effects and lower organic sales. The International Family Care and Professional segment saw a 7.7% decline in sales to $791 million, driven by divestitures and unfavorable currency impacts.

Looking ahead, Kimberly-Clark anticipates ongoing challenges due to market conditions, including the impact of new U.S. tariffs and inflationary pressures. The company estimates incremental costs of approximately $300 million in 2025, primarily affecting the North America segment. Despite these challenges, Kimberly-Clark remains focused on executing its transformation initiative and optimizing its operations to drive future growth and profitability.