Kimberly-Clark (NASDAQ:KMB) used its fourth-quarter and full-year 2025 business update to emphasize progress under its “Powering Care” transformation plan, outline portfolio changes aimed at concentrating the company in higher-growth personal care categories, and provide an outlook for 2026. Leadership also reiterated expectations for the pending Kenvue acquisition and an International Family Care and Professional joint venture with Suzano.
Powering Care progress and portfolio actions
Chairman and CEO Mike Hsu said the company launched Powering Care two years ago to “transform our company and create durable growth,” highlighting efforts to strengthen commercial capabilities, accelerate innovation and marketing, tighten cost discipline, and rewire the organization for growth. Hsu framed the strategy as a “virtuous cycle” in which investments in innovation and brand building drive volume and mix-led growth, supported by productivity and organizational changes that improve returns and fund reinvestment.
Kenvue acquisition plans and synergy targets
Hsu called the planned acquisition of Kenvue a “powerful next step” that he believes will move the company further toward “higher growth, higher margin spaces.” He said Kenvue’s brands “resonate with consumers and lead attractive categories,” and argued the combination would create complementarity across categories and geographies, with exposure to “structural tailwinds across age and lifestyle cohorts.”
Management reiterated synergy expectations, saying it expects to generate $2.1 billion of annual synergies from the transaction net of reinvestment, including about $1.9 billion of cost synergies targeted within the first three years after close. Hsu added the company expects “solid EPS accretion in year two following close.”
President and COO Russ Torres, who is also leading the Integration Management Office (IMO), said it is “still very early” but he is energized by the opportunities and “even more confident” in the ability to deliver and “eventually surpass” the outlined synergies. Torres said the IMO includes leaders from both companies as well as external specialists and is operating with “clear accountability.”
2025 operating highlights: innovation, share, and productivity
Hsu said 2025 marked the company’s second consecutive year of broad-based volume plus mix growth, with full-year volume-led organic growth of approximately 2%. He added enterprise weighted share was up about 10 basis points versus the prior year despite higher competitive promotion activity in the second half, and said International Personal Care focus markets posted broad-based share gains.
On innovation, Hsu said the company is focusing on consumer benefit spaces including leak-free confidence, garment-like comfort, skin health, and overnights, and described the pipeline as the strongest it has been. He noted that in 2025, volume plus mix eclipsed pricing as a growth driver, and said 78% of volume and mix-led growth was attributed to innovations launched in the last three years.
Hsu also highlighted productivity as a key funding source for reinvestment. He said 2025 marked a second straight year of “industry-leading” gross productivity at 6.2% of adjusted COGS, peaking at 7.2% in the fourth quarter, both above the company’s expected range. He said Kimberly-Clark reduced personal care product platforms from 30 to 11 across nine facilities, announced a $2 billion investment in its North American manufacturing footprint (including an advanced manufacturing facility in Warren, Ohio, and an automated distribution center at its Beech Island, South Carolina plant), and continued modernizing systems and procurement tools.
Torres provided market and segment color, particularly in International Personal Care (IPC) and North America. In IPC, he said organic growth accelerated to mid-single-digit levels in the fourth quarter and that all IPC focus markets delivered volume-led organic growth in the quarter. He said the company gained roughly 0.5 point of weighted average market share across focus markets for the year and sustained “healthy margins” with strong exit momentum in the fourth quarter.
Torres highlighted several product launches and market examples, including Kotex Gravity Pads in China with “Absorb-to-the-Bottom technology,” Huggies Cushion Protection in Brazil (where he said Huggies gained nearly 50 basis points of share in the fourth quarter and 40 basis points for the full year), adult care innovation in Indonesia (adult care up 17% organically for the year, led entirely by volume), and premiumization progress in South Korea with Huggies Skin Essentials (60 basis points of share gain for the year). He also cited the launch of Huggies Natural Pro Deep Sleep Master in China and said it ranked No. 1 in launch revenue in the sleep category during a two-month post-launch period.
In North America, Torres said the company delivered a third consecutive year of positive volume mix-led growth. In the fourth quarter, he said North America grew 80 basis points organically, with volume plus mix up 1.8%, despite weighted average category growth slowing to 0.5%. Weighted share was broadly in line with the prior year for both the quarter and the year, while personal care grew value share 20 basis points for the year, led by a volume share gain of over 90 basis points. He also said operating profit dollars increased versus the prior year despite a 330 basis point impact from exiting private label business.
Torres cited brand and marketing examples including Poise’s “Giggle Dribble” campaign featuring Katherine Heigl (which he said was later scaled to Australia), partnerships for Depend including Deion Sanders, and a Huggies campaign featuring Giannis that generated 1.8 billion paid impressions and 2.4 billion earned media impressions, producing about a 30% higher ROI than all ads in the prior year. He also noted the company was ranked No. 2 overall CPG by customers in the Advantage Survey of retailers, after having previously been ranked No. 1 for three consecutive years.
Financial results and 2026 outlook
CFO Nelson Urdaneta said Kimberly-Clark delivered a “strong year” in 2025 while exiting a large private label diaper contract in North America and beginning preparations to stand up the International Family Care and Professional business as an independent operating entity. For the fourth quarter, he said the company delivered 2% organic growth on the back of 3% volume plus mix growth, even as global weighted average category growth slowed to roughly 60 basis points from about a 2% run rate during the prior nine months.
Urdaneta said adjusted free cash flow was $1.9 billion for the year, largely in line with the company’s previous estimate. He also discussed longer-term margin and cost progress, including returning adjusted gross margin to pre-pandemic levels in the second half of 2023 and expanding further since then. He said the company maintained visibility to achieving adjusted gross margin of at least 40% before the end of the decade and said overheads were reduced by 80 basis points of sales over the last two years, contributing to 100 basis points of adjusted operating profit margin expansion over that period.
For 2026, Urdaneta said the company is targeting organic growth “in line to ahead of category growth” from both North America and International Personal Care. He said adjusted operating profit is projected to grow mid- to high-single digits on a constant-currency basis, assuming a mid-year close of the International Family Care and Professional transaction, with an aim to be at the high end of the range partly due to mitigating stranded costs. He said the company expects double-digit constant-currency adjusted EPS growth from continuing operations, and an adjusted effective tax rate of about 23%.
Urdaneta added that adjusted EPS attributable to total Kimberly-Clark is expected to be in line with 2025 levels on a constant-currency basis, reflecting underlying growth partly offset by lower income from discontinued operations. Adjusted free cash flow is expected to remain approximately $2 billion, even as capital spending rises to about $1.3 billion from $1.1 billion in 2025.
Looking beyond 2026 and assuming a year-end close of the Kenvue acquisition, Urdaneta said the company believes it can deliver adjusted EPS growth in the mid- to high-single-digit range on a two-year CAGR from 2026 to 2028. He also provided synergy timing expectations for cost synergies—roughly 40% in the first year after closing, 40% in year two, and 20% in year three—and said the company conservatively modeled revenue synergies evenly over the first four years. He said the model assumes no more than mid-single-digit dilution to adjusted EPS in 2027 versus the standalone plan, followed by “significant accretion” in 2028 as synergies and base business growth take hold.
In closing remarks, Hsu said the company is “well-positioned” for opportunities in 2026 and framed the Kenvue deal as building on Powering Care to create a consumer health and wellness company serving consumers across life stages. Management said it will share additional details on growth initiatives and the innovation pipeline at the CAGNY Conference next month.
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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