Kimberly-Clark Q4 Earnings Call Highlights

Key Points

• Eighth consecutive quarter of volume‑plus‑mix gains with enterprise‑weighted share growth and a second straight year of industry‑leading productivity, which management credits for sustaining performance in a value‑focused consumer environment.
• Management said it expects a partial loss of diapers and Pull‑Ups distribution in the North America club channel beginning in Q1, modeled as roughly a 60 basis‑point headwind to full‑year results, although the company reported global diaper share gains in Q4.
• Company reiterated the planned Kenvue acquisition (shareholder vote Jan. 29 reportedly >90% in favor) and expects close in the back half of the year; for 2026 it forecasts largely flat costs, ~6% productivity, margin expansion and long‑term targets of ≥40% adjusted gross margin and 18–20% operating margin before 2030.

Kimberly-Clark NASDAQ: KMB executives emphasized continued momentum under the company’s “Powering Care” strategy during the company’s fourth-quarter 2025 earnings call, pointing to sustained volume-plus-mix gains, market share progress, and productivity initiatives as key supports amid what management described as a value-focused consumer environment.

Management points to sustained volume-plus-mix momentum

CEO Mike said the company delivered its “eighth consecutive quarter of solid volume-plus-mix performance” in Q4 and “gained enterprise-weighted share.” He also highlighted what he called a “second straight year of industry-leading productivity,” noting Q4 was the strongest quarter of the year on that front.

Mike said the company has been accelerating “consumer-directed, science-based innovation and breakthrough marketing” and has “pivoted” its portfolio toward “higher growth, higher-margin personal care categories.” He added that Kimberly-Clark entered 2026 with a plan focused on differentiation and maintaining what he called “healthy levels of investment” across the value chain, while expecting consumer pressure and a focus on value to persist.

Consumer environment: “Meet consumers where they need us”

In response to a question about why Kimberly-Clark has been growing volumes in a difficult environment, Mike said the company anticipated rising pressure on consumers “2, 2.5 years ago” and focused on delivering “superior propositions” across “every rung of the good, better, best ladder.” He said the company is combining innovation at the top end with efforts to “rush that innovation through into our value tiers,” aiming to deliver “superiority at a very, very competitive cost.”

Russ added that management does not expect the consumer focus on value to change soon. He said shoppers are shifting across channels and looking for different pack sizes, with purchase frequency in some markets “being impacted a little bit,” leading to “more choppy month-to-month consumption data.” In response, he said the company has made targeted “price pack adjustments” and has paid close attention to “channel participation” to keep offerings compelling at the “good,” “better,” and “best” tiers.

On category growth expectations, Nelson said the company’s outlook for 2026 implies a global category backdrop “around ±2%,” describing some recent “choppiness” but noting the company’s categories tend to be more resilient. Nelson later added that recent data showed categories “hovering around that 2%” level as the year began.

Pricing and mix: promo timing, channel shifts, and price-pack actions

Asked about decelerating price/mix in North America, Russ cited three factors. First, he said a “promo dynamic” reflected the company rephasing some activation tied to innovation into Q4 amid competitive promotional activity in the second half. Russ said the company doesn’t believe promotions drive incremental consumption in its essential categories, but uses them to drive trial—particularly for innovation with sensorial benefits.

As one example, Russ pointed to Huggies Snug & Dry, describing it as “the softest diaper in the value tier,” and referenced a “new generation 2 Core” product that he said provided “better protection and more comfort” and was named the “number one” disposable diaper by Good Housekeeping.

Second, Russ cited “club mix,” describing consumers moving to club channels and buying larger pack sizes at a lower unit price, boosting volume but pressuring price. Third, he referenced “strategic investments in pack sizes and choices” to sharpen the company’s pricing-value ladders across channels.

Russ said promotional activity for the year remained below category and 2019 levels and said the company intends to maintain pricing discipline while growing volume and mix “profitably,” led by innovation and category development.

Diapers and club channel: distribution loss expected to begin in Q1

On the U.S. diaper category and a major club retailer moving away from branded exclusivity, Russ said the company expects a “partial loss of diapers and Pull-Ups distribution in the North America club channel,” beginning in Q1. Nelson clarified the impact is reflected in the company’s full-year outlook as a “headwind of around 60 basis points” for the year.

Despite the channel change, Russ pointed to global share gains in diapers across several markets in Q4, including China, Korea, Brazil, and Indonesia, and said in North America the company grew diaper share by “about 100 basis points” in Q4 and has grown share “two years in a row.” He said management remains focused on offering differentiated value propositions across channels.

Kenvue transaction and long-term margin targets

Mike reiterated the company’s plan to acquire Kenvue, calling it a step that would advance Kimberly-Clark toward “higher growth, higher-margin spaces” and position it as a “global health and wellness leader.” On timing, Mike said the shareholder vote was scheduled for January 29 and said voting through the prior day was “well in excess of 90% in favor.” He added that the company still expects closing “somewhere in the back half” of the year and said the regulatory process was tracking consistent with initial expectations, with international filings expected to be completed by early February.

On category growth and pacing, Nelson said Q4 2025 weighted global category growth fell to “around 0.6%,” compared with roughly 2% earlier in the year, citing discrete factors in North America including the impacts of Hurricane Helene, port strikes, and “panic-related buying” in 2024, plus some “pantry loading” in North America diapers in Q3 2025. For 2026, he said net sales are expected to be “roughly 50/50” between the first and second halves, with organic growth expected to “accelerate in the back half versus the first half,” as innovation and brand support ramp.

Nelson said the company expects costs in 2026 to be “largely flat” after managing about “$200 million of input costs” in 2025, including unexpected tariff-related headwinds. He said the company expects another year of strong productivity “around 6%,” and as a result expects expansion in both gross and operating profit margins in 2026. Management reiterated longer-term targets of achieving at least 40% adjusted gross margin “before the end of the decade” and operating profit margins of “at least 18%-20%” before 2030, which Nelson said excludes any impact from Kenvue integration.

When asked about competitive intensity and the risk of pricing pressure returning, Nelson said the company had factored strategic price-pack and channel investments into its plan and expects to be “lapping” those actions entering 2026. Mike added that the company is not focused on “renting share through promotion,” emphasizing innovation, marketing effectiveness, and productivity as the preferred levers.

Internationally, executives said margin expansion opportunities are tied to premium segment development, productivity, and leveraging global scale. Russ said the company expects international personal care in 2026 to deliver “positive volume and mix-led growth ahead of the category,” with share growth targeted again, supported by innovation and premiumization.

About Kimberly-Clark NASDAQ: KMB

Kimberly-Clark Corporation is a U.S.-based multinational manufacturer of personal care and consumer tissue products. The company develops, produces and markets a range of consumer brands and professional products, including facial and bathroom tissues, disposable diapers and training pants, feminine care, incontinence products and workplace hygiene solutions. Known for consumer-facing names such as Kleenex, Huggies, Kotex, Cottonelle and Scott, as well as professional offerings under Kimberly-Clark Professional and KleenGuard, the company supplies goods to retail, healthcare and institutional customers.

Founded in 1872 in Neenah, Wisconsin, Kimberly-Clark has expanded from its 19th-century paper-making roots into a global household and workplace products company.

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