KMB · Q2 2025 Earnings
CautiousKimberly-Clark
Reported August 1, 2025
30-second summary
SENTIMENT: Constructive Kimberly-Clark printed Q2 FY2025 revenue of $4.16B, down 1.6% YoY on a reported basis, with organic sales growth of 3.9% driven by 5.0% volume growth — characterized in the press release as the highest volume growth in five years — partially offset by 1.2% of price investment. Adjusted gross margin came in at 36.9% (-180 bps YoY) reflecting planned price:value tier investments and tariff-driven costs, partially offset by productivity. Adjusted operating profit was $713M (-2.2% YoY) and adjusted EPS attributable to Kimberly-Clark was $1.92 (-2.0% YoY). North America reported revenue was down 1.9% even as NA organic grew 4.3%, with divestitures (PPE, US private label diaper exit) and FX accounting for the gap. The press release characterizes the print as raising the 2025 outlook and calls the quarter "one of the strongest in our recent history."
Headline numbers
EPS
Q2 FY2025
$1.92
Revenue
Q2 FY2025
$4.16B
-1.6% YoY
Gross margin
Q2 FY2025
35.0%
Operating margin
Q2 FY2025
14.2%
Key financials
Q2 FY2025| Metric | Q2 FY2025 | YoY |
|---|---|---|
| Revenue | $4.16B | -1.6% |
| EPS | $1.92 | — |
| Gross margin | 35.0% | — |
| Operating margin | 14.2% | — |
Guidance
Prior quarter data unavailable — comparison not possible.
Segment performance
Q2 FY2025| Segment | Q2 FY2025 | YoY |
|---|---|---|
| North America | $2.73B | -1.9% |
| International Personal Care | $1.433B | +0.4% |
| NA Organic Sales Growth | 4.3% | — |
| IPC Organic Sales Growth | 3.3% | — |
Platform metrics
Q2 FY2025| Segment | Q2 FY2025 |
|---|---|
| Organic Sales Growth | 3.9% |
| Volume Growth | 5.0% |
| Net Price | -1.2% |
Profitability
Q2 FY2025| Segment | Q2 FY2025 |
|---|---|
| Adjusted Operating Profit | $713M |
| Adjusted Gross Margin | 36.9% |
Other KPIs
Q2 FY2025| Segment | Q2 FY2025 |
|---|---|
| Shareholder Returns | $944M YTD |
Management tone
No tone-shift analysis available for this quarter.
Recurring themes management leaned on this quarter:
Risks management surfaced:
Q&A highlights
Robert Ford · Bank of America
Are KCC exports to the U.S. impacted by Trump tariffs or shielded by USMCA? How are China tariffs impacting KCC sourcing and export opportunities? Did competitors show similar discipline in summer promotional campaigns?
Exports shielded by USMCA. Mexico well-positioned relative to other countries for further U.S. integration; exploring opportunities with partners to increase finished product exports, expected to materialize in Q4 and 2026. Competitors approached summer promotions aggressively as in the past, putting KCC at disadvantage short-term but positioning them well long-term.
Ryan Lavin · Barclays
Are consumers trading down amid price increases and lower remittances? What value proposition will drive KCC product choice over competitors in H2, given larger price gap?
Observing market-wide consumer trade-down, but KCC's upper-tier products performing well due to richer portfolio mix. Strategy: strengthen multi-tier pricing, optimize product counts/presentations/prices for accessibility, and expand private label where it makes business sense. Expecting volume growth from portfolio adjustments, not overnight but visible by Q4.
Ferdinand · JP Morgan
Is H2 volume growth driven by inventory reduction across channels rather than actual consumer demand increase? If true, is H2 an inflection point rather than game-changer? What margin trajectory expected with input cost benefits?
H2 volume growth driven by combination: inventory normalization (supply-side) plus portfolio/pricing strategy adjustments protecting volumes and prices (demand-side). Headwinds include economic slowdown, client inventory reduction, and some raw material pressure. Tailwinds include strategy protection of pricing, portfolio adjustments (slower start in July, improving through Q3-Q4), exchange rate benefits, and cost savings. Confident tailwinds will exceed headwinds by year-end and into 2026.
Alejandro Fuque · CTAO
What is driving volume pressure? Is it macro slowdown/consumption or competition? What drives H2 growth if consumer weakness persists in Mexico?
Volume pressure driven by: (1) Mexican private consumption slowdown affecting category volumes (diapers/tissue growth flat or slightly ahead); (2) sell-in/sellout gap widening as clients aggressively manage inventories; (3) macro uncertainty. H2 growth drivers: (1) chose not to participate aggressively in summer promotions, protecting brand pricing and avoiding excess consumer/client inventory build; (2) healthier inventory position going forward; (3) multi-tier, multi-channel innovation strategy; (4) adjusted presentations/pricing for accessibility.
Antonio Hernandez · Activer
How did sales progress during Q2? Was it soft start then stronger, or consistent? How is away-from-home (professional) channel performing?
Q2 sales progression was consistent across April-May-June, no major differences despite competitive disadvantage from not promoting aggressively in June. Early July similarly consistent. Professional business saw important sales decrease driven by volume (price mix slightly positive), due to: sharp slowdown in tourism (double-digit declines in Cancun), lower demand from hotels/restaurants outside Mexico City, and distributors reducing inventory. No catalysts for domestic consumption acceleration identified yet.
What to watch into next quarter
Whether net price returns to positive territory. Q2 FY2025 net price was -1.2% consolidated and -2.7% at IPC, characterized as planned investment in price:value tiers. Watch whether the price investment phase begins to taper in H2 as productivity and mix carry more of the margin load.
NA reported revenue inflection. Organic NA grew 4.3% but reported NA shrank 1.9%. The -290 bps FY divestiture drag persists all year; watch whether organic NA acceleration offsets, or whether reported NA contracts further.
Adjusted gross margin trajectory. 36.9% (-180 bps YoY) with price investment + tariffs as the primary drivers. Track whether productivity gains from the 2024 Transformation Initiative stabilize the margin in H2.
IFP / Suzano JV transaction progress. Anticipated mid-2026 close. Watch for updates on separation costs, regulatory milestones, and any change to the discontinued operations treatment.
Tariff impact and supply chain. Press release flags incremental tariff-driven costs as a Q2 FY2025 margin headwind. Watch for sizing or mitigation commentary as productivity gains from the 2024 Transformation Initiative ramp.
FY guide bias. Outlook framing was raised this print (qualitative, driven by IFP reclassification). Watch whether Q3 brings a numeric lift to any underlying metric or holds at low-to-mid single digit constant-currency.
Sources
- Kimberly-Clark Q2 2025 Press Release (8-K Exhibit 99.1), filed August 1, 2025 — https://www.sec.gov/Archives/edgar/data/55785/000005578525000076/kmbq220258kex-991.htm
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