Kimberly-Clark Corporation, a leading global manufacturer in the personal care and hygiene sector, reported quarterly financial results that outperformed analysts' earnings per share estimates, reflecting strong operational management and profit growth momentum. Despite slight sales pressure stemming from portfolio changes in its U.S. diaper segment, the company emphasized margin expansion opportunities, especially in international markets, and conveyed confidence in ongoing progress across its global footprint.
The company's brand portfolio includes household names such as Huggies, Kleenex, Kotex, Depend, Scott, Cottonelle, Poise, and Viva, underlining its prominent position in the hygiene product industry worldwide.
Quarterly Performance Details
In the fourth quarter, Kimberly-Clark reported adjusted earnings per share (EPS) of $1.86, exceeding the analyst consensus estimate of $1.81. Quarterly revenues amounted to $4.08 billion, which narrowly missed the projected $4.09 billion, representing a 0.6% decline in sales year-over-year. However, on an organic basis, sales grew by 2.1%, indicating underlying demand strength.
The company maintained its gross margin at 35.9%, with the adjusted gross margin steady at 37%, consistent with the same quarter in the prior year. Notably, during the quarterly earnings conference call, executives identified international gross margin expansion as a significant growth opportunity.
Adjusted operating profit reached $629 million, marking a 13.1% increase compared to the year-ago quarter. This improvement was primarily driven by productivity enhancements and a reduction in planned expenses for marketing, research, and general administrative costs. Net interest expense was reported at $54 million, largely unchanged from the previous year.
Progress Across Global Markets and Strategic Initiatives
Company leadership highlighted positive performance in key international markets, including Australia, Brazil, and South Korea, reflecting Kimberly-Clark's strengthened global position. Furthermore, the ongoing acquisition of Kenvue was cited as a strategic milestone expected to enhance the company's transformation and accelerate momentum across its operations. CEO and Chairman Mike Hsu remarked that this acquisition will empower Kimberly-Clark to elevate care standards for billions of consumers worldwide.
Financially, the company ended the quarter with liquidity of $688 million in cash and equivalents, while inventories were valued at $1.475 billion.
Dividend Announcement
Kimberly-Clark declared an increase in its regular quarterly dividend from $1.26 to $1.28 per share. This dividend adjustment reflects the company's commitment to delivering shareholder value and is scheduled for payment in cash on April 2, 2026.
Outlook and Projections for 2026
Looking ahead, Kimberly-Clark expects reported net sales to face a headwind of approximately 50 basis points, primarily as a result of exiting the U.S. private-label diaper market. The effects of currency translation on sales are projected to be neutral.
The company forecasts adjusted operating profit growth in the mid- to high-single-digit range on a constant-currency basis in 2026. Additionally, it anticipates double-digit adjusted EPS growth from continuing operations, supported by several factors: a projected increase in equity-company income, stable net interest expenses, an adjusted effective tax rate approximating 23%, and average shares outstanding remaining effectively unchanged compared to 2025. Moreover, currency translation is expected to positively impact EPS by about 130 basis points.
Market Reaction
At the time of reporting, Kimberly-Clark shares were slightly down by 0.11%, trading at $101.03. This modest stock movement occurred notwithstanding the generally positive earnings report and outlook.