France's Kimberly-Clark sees Q1 dip, full-year plan remains on track
American company of consumer goods and personal care Kimberly-Clark has reported net sales of $4.8 billion in the first quarter (Q1) of 2025, witnessing a decline of 6 per cent, including negative impacts of approximately 2.4 per cent from foreign currency translation and approximately 2.0 per cent from a combination of the personal protective equipment (PPE) divestiture.
The gross margin of the company stood at 35.8 per cent in Q1 2025, inclusive of $53 million, or approximately 110 basis points (bps) of charges related to the 2024 transformation initiative. Excluding these charges, adjusted gross margin was 36.9 per cent, down 20 bps versus the prior year.
Kimberly-Clark has reported net sales of $4.8 billion in Q1 2025, down 6 per cent. Organic sales decreased by 1.6 per cent. Adjusted operating profit fell 6 per cent, while EPS decreased 4 per cent. The company remains confident in offsetting rising global supply chain costs and maintaining long-term growth, with organic sales growth expected to exceed industry averages.
The organic sales of the company decreased by 1.6 per cent driven by a 1.5 per cent decrease in price while volume and mix were in line with a year ago, Kimberly-Clark said in a press release.
The operating profit was $769 million, and adjusted operating profit was $844 million, down 6.0 per cent versus the prior year and inclusive of an unfavourable impact from currency translation of 2.2 per cent.
Diluted earnings per share (EPS) in Q1 2025 were $1.70 on a reported basis. On an adjusted basis, EPS decreased 4.0 per cent to $1.93 as the benefits from a lower adjusted effective tax rate were partially offset by lower adjusted operating profit and lower net income of equity companies.
'Building on the strong foundation we established in 2024, we made further progress across the three pillars of our Powering Care strategy in the first quarter of 2025," said Mike Hsu, chairman and chief executive officer (CEO) at Kimberly-Clark. 'Despite the evolving external landscape, our first quarter was consistent with our full-year plan. At the same time, the current environment will now mean greater costs across our global supply chain versus our expectations at the beginning of the year.'
'However, we remain confident in our ability to offset these costs over time and unlock our long-term potential. Our strong productivity momentum is fuelling investments to advance our competitive advantage and driving profitability. Our innovation across the good-better-best value spectrum is winning with consumers and enabling us to gain share. I am proud of the effort of our teams around the world. Their commitment has positioned Kimberly-Clark to usher in our next chapter of growth and continue to deliver better care for a better world,' added Hsu.
Kimberly-Clark's 2025 outlook aligns with its long-term growth strategy, projecting organic sales growth that will exceed the average growth in the categories and regions it operates in, which are currently growing at 1.5-2 per cent.
Net sales are expected to be negatively impacted by around 200 bps due to currency translation, an improvement from the earlier forecast of 300 bps. Additionally, a 240-bps decline is anticipated from the divestiture of PPE and the exit from the US private label diaper business.
Fibre2Fashion News Desk (SG)
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