Kimberly-Clark beats EPS estimates, 2026 guidance mixed on portfolio moves
Consumer products giant reports 24% adjusted EPS growth in Q4, forecasts double-digit growth from continuing operations but flat overall EPS due to strategic transactions
Kimberly-Clark reported adjusted earnings per share of $1.86 for the fourth quarter of 2025, exceeding analyst expectations and delivering 24% year-over-year growth, according to the company's official earnings release. The consumer products giant's strong performance was driven by a 13.1% increase in adjusted operating profit to $629 million, even as total sales declined 0.6% to $4.1 billion.
The company's organic sales grew 2.1% during the quarter, outpacing the modest overall revenue decline. Organic growth was partially offset by foreign currency headwinds and portfolio changes, including the exit of the company's private label diaper business in the U.S. market. Kimberly-Clark's focus on its core personal care categories, which include brands such as Huggies, Kleenex, and Kotex, continues to drive margin expansion despite challenging macro conditions.
For 2026, Kimberly-Clark provided guidance that reflects its ongoing portfolio transformation. The company forecast double-digit growth in adjusted earnings per share from continuing operations on a constant-currency basis, supported by an expected 30% increase in income from equity companies and a stable tax rate of approximately 23%. However, overall adjusted EPS attributable to Kimberly-Clark is expected to remain flat on a constant-currency basis due to the anticipated reduction in income from discontinued operations related to the IFP transaction.
The strategic portfolio reshaping centers on two major transactions. First, the company is forming a joint venture with Suzano, selling a 51% interest in its International Family Care and Professional business. The transaction carries an implied enterprise value of approximately $3.4 billion and is expected to close in mid-2026. Kimberly-Clark will retain a 49% stake in the venture while sharpening its focus on higher-margin North American and international personal care businesses.
Simultaneously, Kimberly-Clark is acquiring Kenvue for approximately $48.7 billion in enterprise value, creating what the companies describe as a $32 billion global health and wellness leader. The all-cash and stock transaction, announced in November 2025, combines complementary consumer offerings and is expected to generate $2.1 billion in run-rate synergies, including $1.9 billion in cost savings and $500 million in revenue benefits. The deal is anticipated to close in the second half of 2026, subject to regulatory and shareholder approvals.
Analysts have maintained cautious outlooks on the stock ahead of the earnings announcement. UBS holds a "Neutral" rating with a $107 price target, while TD Cowen rates the shares "Hold" at $112, according to recent analyst commentary. Some firms have revised 2026 EPS estimates downward from $8.00 to $7.85, reflecting uncertainty around the integration of the major acquisitions and portfolio changes.
The company's transformation strategy, branded as "Powering Care," aims to shift approximately two-thirds of net revenues to personal care categories, which should improve long-term growth trajectory and returns on investment. Management indicated that the IFP transaction will reduce exposure to volatile input costs and enhance the ability to deliver more predictable margins and profit growth.
Kimberly-Clark shares, which have a market capitalization of approximately $33.9 billion, traded at $101.14 on January 27, 2026, down 1.1% on the day. The stock has a 52-week range of $96.26 to $145.82 and offers a dividend yield of 4.89%, making it attractive to income-focused investors despite the near-term volatility from the strategic portfolio moves.
Looking ahead, investors will focus on execution of the two major transactions, particularly the integration of Kenvue and the realization of projected synergies. The company's ability to deliver on its guidance for double-digit EPS growth from continuing operations while managing the complex portfolio transition will be key to restoring investor confidence and supporting share price performance through 2026.