Kimberly-Clark Q3 2025 Prepared Remarks Earnings Report

Kimberly-Clark EPS Results

• Actual EPS: $1.82
• Consensus EPS: $1.45
• Beat/Miss: Beat by +$0.37
• One Year Ago EPS: $1.83

Kimberly-Clark Revenue Results

• Actual Revenue: $4.15 billion
• Expected Revenue: $4.14 billion
• Beat/Miss: Beat by +$7.35 million
• YoY Revenue Growth: +0.10%

Kimberly-Clark Announcement Details

• Quarter: Q3 2025 Prepared Remarks
• Date: 10/30/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, October 30, 2025
• Conference Call Time: 6:30AM ET

Kimberly-Clark (NASDAQ:KMB) is a global manufacturer of personal care and consumer tissue products. The company develops and markets products designed to support personal hygiene, health and well-being in households, healthcare settings and workplaces.

Its portfolio includes well-known brands such as Huggies diapers and training pants, Kleenex facial tissues, Cottonelle toilet paper and wipes, Scott toilet paper and paper towels, Kotex feminine care products, and Depend and Poise incontinence care products. Kimberly-Clark also provides professional hygiene and workplace solutions through its Kimberly-Clark Professional business.

Founded in 1872, Kimberly-Clark is headquartered in Irving, Texas, and sells products in countries and territories around the world. Its operations serve consumers, retailers, healthcare providers and commercial customers across numerous international markets.

Kimberly-Clark Q3 2025 Prepared Remarks Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Kimberly‑Clark says its "Powering Care" transformation is driving sustained organic momentum with ongoing volume‑plus‑mix growth across North America and International Personal Care despite a promotional environment.
• Positive Sentiment: The company delivered industry‑leading productivity in Q3 — 6.5% of adjusted COGS — and is targeting gross productivity toward the upper end of its 5%–6% range while pursuing about $200,000,000 of SG&A savings.
• Positive Sentiment: Brand and innovation wins are expanding share — examples include Huggies (NA diapers up ~7% volume and +90 bps share YTD), share gains in China, Korea, Brazil and Indonesia, and record Poise share in Australia.
• Negative Sentiment: Near‑term headwinds remain material, including projected gross tariff costs of $100,000,000 (net ~ $50,000,000 mitigated), total COGS inflation of ~$250,000,000, and divestiture/private‑label exits that subtract several hundred basis points from sales and operating profit.
• Neutral Sentiment: Outlook is for low single‑digit adjusted operating profit growth (constant currency), low‑to‑mid single‑digit EPS growth (CC), and roughly $2.0 billion of adjusted free cash flow for the year, though reported results will be impacted by currency and discontinued operations treatment.

Presentation

[Chris Jakubik, Head of Investor Relations at Kimberly-Clark]

Hello, this is Chris Jakubik, Head of Investor Relations at Kimberly-Clark, and welcome to our third quarter 2025 business update. Today, our Chairman and CEO, Mike Hsu, will provide an update on our overall business performance. Russ Torres, our Chief Operating Officer, will provide an overview of segment results and key market highlights, and Nelson Urdaneta, our Chief Financial Officer, will review our third quarter consolidated results and update our financial outlook. We have also scheduled a separate live question-and-answer session with analysts. You can access our earnings release, supplemental materials, and the audio of our Q&A session at investor.kimberly-clark.com. A replay of the Q&A session will be available following the event through the same website. During our review, we will make some forward-looking statements that are based on how we see things today.

[Chris Jakubik, Head of Investor Relations at Kimberly-Clark]

Actual results may differ due to risks and uncertainties, and these are discussed in our earnings release and our filings with the SEC. We will discuss some non-GAAP financial measures during these remarks. These non-GAAP financial measures should not be considered a replacement for and should be read together with the GAAP results, and you can find the GAAP to non-GAAP reconciliations within our earnings release and the supplemental materials posted at investor.kimberly-clark.com. With that, I will turn it over to Mike.

[Mike Hsu, Chairman and CEO at Kimberly-Clark]

Okay, thank you, Chris, and thanks to everyone for joining us today. Three months ago, we outlined how our transformation is gaining momentum across all pillars of our Power and Care strategy. We are strengthening our brand propositions at every rung of the good, better, best ladder, delivering industry-leading productivity to support reinvestment and profitable growth, rewiring our organization to bring the best of KC to the world faster, and we're taking decisive action to create a stronger, more focused portfolio. In the third quarter, we continue to perform while transforming Kimberly-Clark into an industry-leading personal care company. We've been operating in our new segment structure for 12 months, and our Power and Care strategy is truly powering our performance. While the external landscape continues to be dynamic and consumers remain under pressure, Power and Care is enabling us to effectively navigate the environment while delivering industry-leading performance.

[Mike Hsu, Chairman and CEO at Kimberly-Clark]

Importantly, it's enabling us to leverage our scale to deliver better care for a better world. Earlier this month, we announced the launch of four new global charitable partnerships. These initiatives will improve the lives of an estimated 24 million women and girls. The Kimberly-Clark Foundation will fund a three-year, $29 million commitment to menstrual care and maternal and infant care across seven major markets. Our unwavering commitment to delivering better care for a better world is woven into the fabric of our company and reflects who we are. We believe it's one of the reasons we were named to Forbes' list of the world's best employers earlier this month for the sixth year in a row. Looking ahead, we're well positioned to lead our categories and deliver our long-term growth algorithm.

[Mike Hsu, Chairman and CEO at Kimberly-Clark]

Our third quarter results reflect the sustainability of our momentum and the discipline with which we're executing our innovation-led, volume-plus, mix-driven growth model. We delivered another solid quarter, providing superior value to consumers in an increasingly uncertain environment while exercising discipline. We're not renting share by chasing short-term volume through deep discounting. Our inflection to volume-plus, mix-like growth that began last year has continued, even while volume growth has been somewhat challenging to achieve across the broader CPG landscape. Our volume-plus, mix growth has been solid over the last seven quarters, a significant achievement in this complex environment. Importantly, we've earned our volume-plus, mix growth with pioneering innovation, breakthrough advertising, and superior activation. Our approach to managing price-net of input costs is designed to enable category expansion through innovation and advertising while ensuring a strong value proposition at all rungs of the good, better, best ladder.

[Mike Hsu, Chairman and CEO at Kimberly-Clark]

This disciplined approach enabled us to hold global weighted market share in the third quarter, despite an uptick in competitive promotion activity this quarter. In international personal care, we continue to gain weighted share in the quarter, especially in diapers and pants, with strong gains across several focus markets, including China, South Korea, Brazil, and Indonesia. On the productivity front, the third quarter was our strongest of the year at 6.5% of adjusted cost of goods sold. This was powered by the excellent progress we're making on value stream simplification. We're driving end-to-end optimization to deliver the best product at the lowest cost. The combination of value stream simplification, integrated margin management, and the capital investments we're making in our supply chain give us multi-year visibility into our productivity pipeline and confidence in our ability to sustain momentum for years to come.

[Mike Hsu, Chairman and CEO at Kimberly-Clark]

We're continuing to drive overhead efficiency and embedding agile ways of working that leverage our global scale and expertise. This is contributing to consistent operating margin expansion. We gained strong SG&A leverage in Q3 and remain on track to capture approximately $200 million in SG&A savings from our reorganization over time. Our recent portfolio moves are enabling us to sharpen our focus on higher margin, higher growth personal care categories. Additionally, the promotion of Russ Torres to President and Chief Operating Officer earlier this year is already helping to fast-track our wiring efforts, bringing the best of Kimberly-Clark into every market we operate. We're sharpening our operational execution and unlocking the potential of our teams around the world. I'm delighted to have Russ join us today for his first earnings call as COO. Our team's focused execution of Power and Care is driving organic momentum, and we're gaining steam.

[Mike Hsu, Chairman and CEO at Kimberly-Clark]

It's exciting to see the power of our brands unleashed through pioneering innovation and creative storytelling. Our R&D and marketing teams are meaningfully changing how we build brand love. Under the leadership of Patricia Corsi and Craig Slavtcheff, our functional teams are driving hard and fast to deliver science-based innovation that solves unmet consumer needs and breakthrough creative to drive deeper emotional connection to our brands. Importantly, these teams are working seamlessly with our segment teams to tailor locally winning propositions. We're producing some of the best creative and consumer-centric innovation in our recent history. Our R&D team is focused on four consumer benefit platforms: skin health and wellness, garment-like comfort, leak-free confidence, and sustainability. Meanwhile, our in-house creative team is reimagining content and partnering with admired voices like Giannis Antetokounmpo and Katherine Heigl to deliver category-expanding messaging.

[Mike Hsu, Chairman and CEO at Kimberly-Clark]

In a moment, Russ will highlight four examples in North America, Brazil, Korea, and Australia to illustrate how innovation and strong creative storytelling are driving volume-plus, mix-led organic growth. But first, I'd like to highlight our cost-savings efforts. We continue to build on three enterprise supply chain strategies: value stream simplification, network optimization, and scalable automation. In the third quarter, we delivered productivity of 6.5% of adjusted cost of goods sold and continue to expect a second year of industry-leading gross productivity at the high end of our 5%-6% range. We remain focused on achieving best-in-class costs by transforming our supply chain and simplifying processes while leveraging our global network to adapt to an evolving operating environment. Recently, our North America procurement and logistics teams executed a comprehensive sourcing event that strengthened our cost structure and encouraged innovative sourcing approaches.

[Mike Hsu, Chairman and CEO at Kimberly-Clark]

With the intent to challenge the status quo, they cast a wider net and identified new supplier opportunities. Year-to-date, we've brought on 63 new suppliers that are bringing differentiated capabilities to Kimberly-Clark. Through this effort, the team has mitigated $12 million in market inflation, delivered $8 million in gross productivity in 2025, and achieved a 34% change in our transportation network, all while maintaining 93% on-time delivery. I'm proud of the team for showcasing our one KC approach. Now I'll turn it over to Russ to discuss our business segment results and key market highlights.

[Russ Torres, COO at Kimberly-Clark]

Thanks, Mike. My first few months as COO, I've been immersed with our teams around the world, and their passion for our mission is incredibly inspiring. There's fire in their eyes, and we're operating with a sense of urgency enabled by our Power and Care operating model. We're smarter, faster, and more unified in our approach than ever before. Our commercial team, supply chain, and enabling functions are rallying around one goal: to serve consumers better than anyone else. Despite persistent macro challenges, our Power and Care strategy is indeed powering our momentum and creating energy across our organization. In North America, our team is continuing to focus on accelerating growth and leading the development of our categories through innovation and brand building. On the top line, we're on pace for our third consecutive year of positive volume and mix growth.

[Russ Torres, COO at Kimberly-Clark]

We've been delivering strong results, and this is being driven by investments in our marketing and innovation capabilities paired with outstanding activation driven by our commercial execution engine. Our Q3 numbers show the resilient demand for our brands, even as category consumption softens sequentially and we weather challenging external dynamics, especially the heavy competitive promotional activity at the value end of the diaper category. Volume-plus mix growth was 2.1% for the quarter, including a 50 basis points benefit from lapping the hurricane-related impacts to shipments in Q3 of last year. The growth gains in North America were led by mid-single-digit growth in adult and feminine care and solid growth in baby and child care, as well as our professional business. Professional is building momentum with positive organic growth in the third quarter and four consecutive quarters of positive volume growth.

[Russ Torres, COO at Kimberly-Clark]

We have gained 30 basis points of share in the first half of the year. The gains in these three categories offset relative softness in family care due to negative mix driven by consumer migration to larger pack sizes. As a result of the heightened promotional environment, particularly in diapers, we did delay some planned trial-driving consumer activity behind some of our innovations into the fourth quarter. This impacted our share momentum in the quarter as we held or gained share in four of our eight categories, and weighted share was down 40 basis points in the quarter. At the same time, we remain on track to deliver another strong year in North America. Through nine months, volume-plus mix is up 2.2% on essentially flat pricing versus a year ago, and we've grown volume-plus mix for five of the last seven quarters while broadly holding overall price.

[Russ Torres, COO at Kimberly-Clark]

This is driving ongoing improvements in market share, with our personal care business gaining share in 2024 and year to date 2025. Within personal care, our baby and child care momentum is strong with innovation across the good, better, best spectrum. We're up 110 basis points in value share and 200 basis points in EQ share year to date. Adult care is driving accelerated category growth through better marketing, as Mike highlighted, with mid-single-digit consumption growth year to date and EQ share up 70 basis points led by gains in Poise, and I'd note weighted average private label share in our personal care categories has consistently declined for the past five quarters. In tissue, Kleenex continues to be rolling as we capture more occasions and light users through more consumer activations across the calendar.

[Russ Torres, COO at Kimberly-Clark]

Year to date, we gained 200 basis points of value share and 260 basis points of EQ share. Within this, I would just note that the softer mix we continue to see reflects the fact that consumers are shifting their behaviors to buy in more value-oriented channels and pack sizes. So because of this, we remain focused on meeting consumers where they need us and gaining share in the mainstream part of the category. In an environment where the consumer wallet is stretched, we're focused on cascading innovation across the value spectrum and ensuring the very needs of our consumers are addressed within our portfolio. On the bottom line, we continue to create fuel for growth by driving supply chain productivity while effectively navigating headwinds.

[Russ Torres, COO at Kimberly-Clark]

Operating profit dollars were flat in the quarter and down 1% in the first nine months of the year, despite a roughly 220 basis points headwind in the quarter from the private label diaper business exit and a 340 basis points headwind in the year to date from the combined impact of the PPE divestiture and the private label diaper business exit. Also, year to date net tariff impact was an additional 250 basis points headwind to operating profit growth. We continue to deliver strong ongoing productivity gains and SG&A efficiencies. These two together are funding our growth investments and aiding margin expansion. In fact, operating profit margin for North America was up 30 basis points in the year to date, despite absorbing a tariff-related margin impact of 60 basis points. Overall, our North America team remains focused on sustainable, profitable growth and leading the development of our categories.

[Russ Torres, COO at Kimberly-Clark]

One area to spotlight on this front is our diaper business in North America, where we're running our global playbook to lead category growth. Earlier this year, we featured innovation that delivers outstanding performance improvements on our mainstream Huggies Snug & Dry offering, and in the second quarter, we highlighted Little Snugglers' blow-out blocker innovation, which addresses the key need for infants and early-stage toddlers, and now I wanted to share how we're innovating and enhancing Little Movers for active toddlers while building overall brand love for our Huggies franchise. We tapped into NBA star Giannis and his daughter Ava to help introduce the new Huggies Little Movers HuggFit to the U.S. market. With a slip-on format and a flexible waistband designed to move with babies during play, the HuggFit 360 is designed to provide an extra secure fit for up to 100% blow-out and leak-free protection.

[Russ Torres, COO at Kimberly-Clark]

HuggFit 360 keeps Ava protected even as she imitates her father's best moves. Our creative campaign objectives were to drive product awareness, brand love, and sales. Our campaign did exactly that. It garnered over 1.8 billion national paid and 2.4 billion earned media impressions, with 60.2 million unique users reached in June. This earned us a roughly 30% higher ROI than all the ads in the prior year. What's more, our new Little Movers diaper was named Disposable Diaper Product of the Year by Baby Innovation Awards, which is the leading independent body that rates innovation in the baby care industry. As a result, our diaper business in North America has grown volume 7% and gained 90 basis points of market share so far this year. In international personal care, we're building a long-term growth engine that will lead our categories for many years to come.

[Russ Torres, COO at Kimberly-Clark]

In the near term, our objective is to deliver strong volume and mix-driven growth and consistent margin expansion through a three-pronged approach. One, continue to lead growth in China through a proven innovation-driven model to deliver the best products at the lowest cost with high consumer engagement. Two, extend our leadership positions in South Korea and Australia by applying the same playbook. And three, ignite profitable growth in Brazil, Indonesia, and enterprise markets by leveraging our global scale to deliver the best of KC across the good, better, best spectrum. Our results in the third quarter and year to date remain consistent with our playbook as we invest aggressively to strengthen our good, better, best price value tiers across markets.

[Russ Torres, COO at Kimberly-Clark]

Volume-plus mix growth of 3.6% in the quarter was a step up from our first-half performance and reflected broad-based delivery, with volumes up mid to high single digits across China, Korea, Australia, and New Zealand, and up double digits in Indonesia. The combination of strong innovation pipelines, enhanced brand communications, and excellent execution continued to deliver share gains in our international personal care markets, with China diapers gaining 270 basis points of share, South Korea diapers 230 basis points of share, Brazil diapers 90 basis points of share, and Indonesia diapers gaining 150 basis points of share in the quarter versus a year ago. Pricing was sequentially better in the third quarter, but continued to reflect the ongoing deflationary backdrop in China, as well as strategic investments to drive trial for a very strong innovation agenda combined with surgical adjustments to maintain our consumer value propositions.

[Russ Torres, COO at Kimberly-Clark]

At operating profit, we drove 6.5% growth in the third quarter through strong gains in gross productivity savings combined with volume and mix growth and lower incentive accruals versus the prior year. These positives were partially offset by planned step-ups in investments to improve our good, better, best price value tiers. Year-to-date, operating profit is down 9.7%, driven by a combination of two factors. First and foremost was an exceptionally strong profit comparison to the prior year period. The second, as I mentioned previously, is a stepped-up investment to drive growth. We chose to invest ahead of expected full-year productivity gains to improve our competitiveness quickly, with the full intention to be pricing net of cost or PNOC neutral over time.

[Russ Torres, COO at Kimberly-Clark]

To summarize, our IPC team continues to build top and bottom line momentum by applying our proven playbook of bold and scalable innovation, creative that strengthens brand love, and excellent marketing and activation across markets. This gives us good visibility to sustain momentum as we move forward. Let me give you a couple of examples to bring it to life. We created our Huggies Skin Essentials product line because we know parents care deeply about protecting their baby's skin from irritation and diaper rash. We launched Skin Essentials last year in the U.S., where it has been developing a following with rave reviews, and now we've cascaded and customized the science-based technology into our South Korea market. A key ingredient in our Skin Essentials product is D-Panthenol.

[Russ Torres, COO at Kimberly-Clark]

It's a crucial component that addresses the need for advanced skin protection and active skin barrier repair, and it's also a clear differentiator for Kimberly-Clark. Skin Essentials is winning over consumers in Korea, with an 82% purchase intent among new customers and a product rating of 4.9 out of five stars. We've also seen an increase in profitability with premium mix enhancement driving margin. And furthermore, despite having a 63% share in Korea diapers, we've achieved share gains of 230 basis points versus a year ago. In Brazil, we launched Huggies Cushion Protection, designed for up to 12 hours of leak protection with superior absorption and a softer waistband to reduce skin irritation. This is an example of the power of our IPC-focused market strategy in action. We rapidly scaled our eCloud waistband technology from China and customized it for Brazilian consumers. The result?

[Russ Torres, COO at Kimberly-Clark]

A diaper that delivers comfort, protection, and freedom of movement. To maximize awareness, brand love, and sales, we activated our largest Huggies campaign in Brazil. Powered by social media and a strong influencer network, we sparked meaningful conversations and amplified product benefits. As a result, Huggies gained nearly 100 basis points of share in the quarter. We expect the momentum to continue as the campaign will generate over 1.2 billion impressions through year-end. By fast-scaling proving technologies across IPC markets, we're meeting consumers where they need us and driving growth. In Australia, Poise, the number one brand for light bladder leaks, is making an impact. We're proud to have Emmy Award-winning actress Katherine Heigl as our partner to help reduce stigma around leaks for millions of women. And now to scale the success of our Poise Giggle Dribble campaign from the U.S. to Australia.

[Russ Torres, COO at Kimberly-Clark]

This is another great illustration of how the Power and Care operating model is enabling the best ideas to travel quickly. We leveraged the Poise campaign's success in North America to grow consumer demand and to grow our market share in Australia. By adapting our creative campaign in Australia, we've improved category participation and recruitment through education, destigmatization, and increased relevance. Since launch, we've achieved our highest market share ever at 58.7%, up 130 basis points versus last year, and most importantly, we're empowering women around the world. These three highlights from our International Personal Care segment are prime examples of our strategy paying dividends, exactly as we outlined 18 months ago. As we carry out our playbook, we continue to expect our International Personal Care segment to drive positive volume, mix-led organic growth that's ahead of our category growth.

[Russ Torres, COO at Kimberly-Clark]

We also expect this segment to deliver sustained operating profit gains for the full year, reflecting the strong productivity and overhead efficiencies still ahead for the business. Now, I'll turn it over to Nelson to provide an overview of the financial results for the quarter and an update on our financial outlook.

[Nelson Urdaneta, CFO at Kimberly-Clark]

Thanks, Russ. Our third quarter results reflected strong performance in a dynamic environment. Underlying business momentum continued, even as the overall consumer environment softened. We held global weighted share while focusing on sustainable, profitable growth in the face of steeper competitive promotional activity in select pockets of the portfolio, and our year-to-date adjusted operating profit margin was consistent with last year, despite incremental tariff headwinds and with our easiest margin comparisons coming up in Q4.

[Nelson Urdaneta, CFO at Kimberly-Clark]

So, to echo Mike, we are continuing to perform while we transform, putting us in a strong position to drive ongoing growth from continuing operations in the years to come, which I'll discuss further in a moment. Our third quarter organic net sales were up 2.5%, led by 2.4% volume growth, with baby and child care growing in volume across the U.S., China, South Korea, Australia, New Zealand, and Indonesia. For the first nine months of the year, organic net sales grew 1.6%, led by durable momentum across categories in North America, double-digit volume growth in China, as well as solid volume gains in Australia and South Korea. Adjusted operating profit dollars for the third quarter were flat versus the prior year and down 3.2% in the first nine months of the year.

[Nelson Urdaneta, CFO at Kimberly-Clark]

This included a 210 basis point headwind in Q3 and a 400 basis point headwind in the year to date from divestitures and business exits. Currency translation was a 10 basis point tailwind in the quarter and an 80 basis point headwind in the first nine months of the year. Beyond that, the ongoing gains from supply chain productivity, as well as the SG&A-related efficiencies we achieved in the quarter, were partly offset by unfavorable pricing net of input costs due to the planned investments made to enhance our value propositions in several geographies. As noted, we generated gross productivity of 6.5% of our adjusted cost of goods sold, accelerating versus our first-half delivery and continuing to fuel the strategic investments behind our innovation-led growth model and the improvement of our value proposition to consumers.

[Nelson Urdaneta, CFO at Kimberly-Clark]

We are also seeing SG&A leverage come through in the P&L, partly aided by lower incentive accruals versus the prior year, all of which resulted in a year-to-date adjusted operating profit margin of 17%, broadly in line with prior year, while investing in our value propositions and absorbing tariff headwinds. We will continue building on this solid foundation as overhead savings continue to flow through in the coming quarters in line with our Power and Care plans. Third quarter adjusted earnings per share were 1% below the prior year, driven primarily by an increase in our adjusted effective tax rate versus the last year. I would also note that this quarter's results included approximately $0.07 of favorability from the cessation of depreciation and amortization versus the prior year in the discontinued operations line.

[Nelson Urdaneta, CFO at Kimberly-Clark]

This is part of the $0.16 tailwind we anticipated when we reported our second quarter results a few months ago. Finally, we delivered year-to-date adjusted free cash flow of approximately $1.3 billion, and we remain on pace to deliver approximately $2 billion for the full year. All things considered, we're on pace to deliver a strong second year of our transformation, strengthening the base from which we will build in the coming years, which brings me to our outlook. As a reminder, we've adjusted our full-year outlook to be consistent with the move of the IFP business to discontinued operations in our P&L. Our outlook for net sales and operating profit growth now reflects the results of the remaining two segments, North America and International Personal Care, as well as our overhead structure excluding IFP.

[Nelson Urdaneta, CFO at Kimberly-Clark]

However, our outlook for adjusted earnings per share and adjusted free cash flow remained consistent with the past approach, as we will continue to report these amounts inclusive of IFP until the close of the transaction projected sometime mid-year 2026. On the top line, as we remain disciplined in our approach to lead and grow in our categories, we now expect to grow broadly in line with market growth where we compete in 2025, while maintaining our intent to lead market growth over time, consistent with our long-term algorithm. On a weighted average basis, our country category mix for North America and International Personal Care is currently growing approximately 2%. As we've highlighted previously, reported 2025 net sales growth will be negatively impacted by a combination of our personal protective equipment divestiture on July 1st of last year and the private label diaper business exit in the U.S.

[Nelson Urdaneta, CFO at Kimberly-Clark]

That began in Q1 of this year. This will represent a headwind of approximately 290 basis points to our revised sales base for the full year and approximately 230 basis points in the second half of the year. In terms of currency, we anticipate a net sales headwind from translation of approximately 100 basis points for the full year, predominantly reflected in year-to-date results. At adjusted operating profit, we now expect low single-digit growth on a constant currency basis. This includes our latest full-year estimate for incremental gross tariff-related costs, which we now project at approximately $100 million. We expect to be able to mitigate approximately $50 million of the tariff headwind this year, resulting in a net tariff impact of $50 million. Including the net impact from tariffs, we now project total cost of goods sold inflation of approximately $250 million for the North American and IPC businesses combined.

[Nelson Urdaneta, CFO at Kimberly-Clark]

This outlook continues to include a negative impact from the personal protective equipment divestiture and the U.S. private label diaper business exit, amounting to approximately 380 basis points versus the prior year from a continuing operations perspective. Within this, we remain confident in our line of sight to deliver gross productivity towards the upper end of the 5%-6% range of adjusted cost of goods for the full year, as well as capturing a portion of the $200 million in overhead savings that we've targeted through our wiring for growth initiatives. Beyond that, and consistent with our top-line expectations, we expect reported adjusted operating profit growth to be negatively impacted by approximately 70 basis points from currency translation. On adjusted earnings per share, we continue to expect low to mid single-digit growth versus the prior year on a constant currency basis.

[Nelson Urdaneta, CFO at Kimberly-Clark]

This continues to include a negative 320 basis point impact from the personal protective equipment divestiture and the U.S. private label diaper business exit, and a negative 100 basis point impact from items below operating profit in continuing operations, including higher net interest expense and a higher adjusted effective tax rate, partially offset by lower shares outstanding, among others. Income from discontinued operations will include benefits from cessation and depreciation and amortization expense on assets held for sale that will benefit EPS versus the prior year by approximately 200 basis points or $0.16 for the full year, of which approximately $0.09 have been realized in the year to date. Additionally, earnings per share are expected to be negatively impacted by approximately 150 basis points from currency translation, including the currency impact on income from equity interests in line with the estimate we provided in August.

[Nelson Urdaneta, CFO at Kimberly-Clark]

Taken together, our outlook reflects our discipline and dedication to our innovation-led volume mix focused growth model. Volume mix productivity and overhead savings through the third quarter have been stronger than anticipated, making us well-positioned to deliver our 2025 bottom-line plan and another year of significant progress against our Power and Care transformation. In the fourth quarter, we'll look to position both our ongoing business and IFP for further success in 2026. We'll leverage our SG&A favorability and lower anticipated net tariffs impact to drive trial of our new product launches and strengthen our consumer proposition across good, better, best ladder. Overall, both our results and the business progress we're making in 2025 continue to improve our trajectory. Our transformation is gaining momentum. We're addressing the volatility of the past through discipline, process, and portfolio actions in the present. We're consistently delivering against realistic, achievable expectations.

[Nelson Urdaneta, CFO at Kimberly-Clark]

With that, I will turn it back to Mike for some closing thoughts.

[Mike Hsu, Chairman and CEO at Kimberly-Clark]

Thank you, Nelson. I'm proud of how our teams around the world have stepped up to build on our momentum, push the boundaries of innovation, and continue to execute against our multi-year transformation. As we look to the remainder of 2025, we will continue to leverage our agile ways of working along with our global scale and capabilities to deliver for our consumers. We remain confident in our ability to unlock our long-term potential and drive value for shareholders. Thank you for your time and your interest in Kimberly-Clark.

Participants

Executives

• Nelson Urdaneta, CFO
• Chris Jakubik, Head of Investor Relations
• Russ Torres, COO
• Mike Hsu, Chairman and CEO