Kimberly-Clark reported quarterly results that beat profit expectations, helped by a combination of cost reductions and ongoing consumer purchases of core products such as Huggies diapers and Kleenex tissues. The Dallas-headquartered company, which saw its shares decline roughly 23% during 2025, traded up about 2% in pre-market activity after the results.
Management has taken steps in recent months to tighten its cost base and reshape its portfolio. Those moves include workforce reductions and the disposal of lower-margin and non-essential businesses, specifically its private-label diaper operations and personal protective equipment segments. Executives say the actions have helped protect margins while the company pushes deeper into more affordable product ranges and introduces lower-priced items that retain premium features to compete for budget-conscious shoppers.
For the fourth quarter, Kimberly-Clark reported that average selling prices declined 1.1% while organic sales increased 2.1%. The volume metric was a brighter spot, rising 2.7% overall as consumers purchased larger, value-pack formats of essential items - including surface cleaning agents, disinfectants and paper napkins - at warehouse-style club stores.
The company recorded an adjusted gross margin of 37%, effectively flat with the prior year, despite earlier warnings from Kimberly-Clark that steep U.S. import duties - particularly on goods from China - could weigh on profitability. Adjusted earnings per share for the quarter ended December 30 came in at $1.86, ahead of analysts' estimates of $1.81 based on LSEG-collected data. Reported net sales for the period were $4.08 billion, narrowly missing consensus expectations of $4.09 billion.
The quarterly results arrive after a comparable consumer-goods peer, Procter & Gamble, also reported profits above expectations last week even as revenue came in slightly below forecasts.
Looking ahead, Kimberly-Clark expects 2026 organic sales to be at least in line with - or to outpace - the roughly 2% average growth observed across the categories and markets in which it competes. Management is guiding for adjusted earnings per share to grow at a double-digit pace, driven in part by further efficiency gains that should allow margin expansion.
In a separate strategic move, the company has proposed acquiring consumer health company Kenvue - the maker of Tylenol - in a transaction valued at more than $40 billion. Kimberly-Clark has stated it expects the deal to close by year-end, which would create a larger global consumer health business.
Context and market reaction
Investors appeared to respond positively to the beat on adjusted EPS and the margin resilience reported for the quarter, reflected in the modest pre-market share uptick. The combination of portfolio pruning, price management and volume growth in bulk retail channels appears to have helped offset tougher cost dynamics cited by the company.