Kimberly-Clark Tops Q2 EPS Estimates, Stock Jumps Over 5%

Kimberly-Clark Corporation KMB shares were trading higher in the premarket session on Friday as the company reported second-quarter adjusted earnings per share of $1.92, beating the analyst consensus estimate of $1.66.

Quarterly sales of $4.20 billion (down 1.6% year over year) missed the Street view of $4.86 billion.

North American net sales decreased 1.9% to $2.7 billion in the quarter, driven by a combination of the PPE divestiture and the exit of the company’s private label diaper business in the US. IPC net sales of $1.4 billion increased 0.4%year over year.

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Adjusted gross margin was 36.9%, down 180 basis points from the prior year, primarily due to unfavorable pricing net of cost inflation.

The decline reflects planned investments to enhance price-value tiers across the portfolio and higher tariff-related costs, partially offset by strong productivity gains.

Adjusted operating profit was $713 million, down 2.2% versus the prior year, driven by gross profit headwinds, partially offset by planned lower marketing, research, and general expenses.

The net income of equity companies was $47 million, compared to $63 million in the prior year, primarily driven by unfavorable currency impacts.

Total debt was $7.2 billion as of June 30, down from $7.4 billion as of December 31, 2024.

Kimberly-Clark exited the quarter with cash and equivalents worth $634 million.

Outlook

The company expects its 2025 adjusted operating profit to grow at a low-to-mid single-digit rate on a constant-currency basis versus the prior year. 

Adjusted earnings per share are expected to grow at a low-to-mid single-digit rate on a constant-currency basis, including a negative 320 basis point impact from a combination of its PPE divestiture and the exit of the company’s private label diaper business in the US.

Adjusted free cash flow is expected to be approximately $2 billion in 2025.

Price Action: KMB shares are trading higher by 5.33% to $131.26 premarket at last check Friday.

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