Kimberly-Clark Q2 Earnings Beat Estimates, Analysts Raise Forecasts

Kimberly-Clark reported Q2 adjusted EPS of $1.92, beating the consensus estimate of $1.66. Sales of $4.20 bln missed the Street view of $4.86 bln. The company expects 2025 adjusted operating profit to grow at a low-to-mid single-digit rate and adjusted EPS to grow at a low-to-mid single-digit rate, including a negative 320 basis point impact from divestiture and exit of private label diaper business. Shares gained 1.6% to $132.71 on Monday. Analysts upgraded and raised price targets following the earnings announcement.

Kimberly-Clark Corporation (KMB) reported its second-quarter 2025 results, revealing a mixed performance. The company's adjusted earnings per share (EPS) of $1.92 surpassed the consensus estimate of $1.66, while sales of $4.16 billion fell short of the Street's expectation of $4.61 billion. The company's guidance for 2025 expects adjusted operating profit and adjusted EPS to grow at a low-to-mid single-digit rate, including a negative 320 basis point impact from divestitures and exits of private label diaper businesses. Shares gained 1.6% to $132.71 on Monday, with analysts upgrading and raising price targets following the earnings announcement.

Key highlights from the Q2 results include:

- Revenue: The company reported a 17.2% year-on-year decline in sales to $4.16 billion, missing the consensus estimate of $4.61 billion. The shortfall was primarily attributed to the divestiture of the International Family Care and Professional (IFP) business and the exit from the U.S. private-label diaper business.
- Adjusted EPS: The adjusted EPS of $1.92 per share beat the consensus estimate of $1.66 by 14.8%.
- Operating Margin: The operating margin improved to 14.2% from 13% in the same quarter last year.
- Free Cash Flow Margin: The free cash flow margin decreased to 13.8% from 17.2% in the same quarter last year.
- Organic Revenue: Organic revenue rose 3.9% year-on-year, driven by a 5% increase in sales volumes.

Looking ahead, Kimberly-Clark expects 2025 adjusted operating profit to grow at a low-to-mid single-digit rate on a constant-currency basis, with a 320 basis point adverse impact from the PPE and private-label diaper divestitures, as well as a 100 basis point headwind from currency translation. The company also anticipates adjusted EPS to grow at a low-to-mid single-digit rate on a constant-currency basis, reflecting a 320 basis point negative impact from divestitures and a 100 basis point headwind from currency translation.

References:
[1] https://finance.yahoo.com/news/kimberly-clarks-q2-earnings-top-172600659.html
[2] https://finance.yahoo.com/news/kimberly-clark-nasdaq-kmb-reports-105224760.html