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Investing.com -- Kimberly-Clark Corporation reported second-quarter earnings that significantly exceeded analyst expectations, driven by the strongest volume growth in five years. Shares rose 3.4% following the announcement as investors responded positively to the company’s performance and outlook.
The consumer products giant posted adjusted earnings per share of $1.92, handily beating the analyst consensus of $1.65 by $0.27. Revenue came in at $4.16 billion, below the consensus estimate of $4.77 billion, but organic sales grew 3.9% YoY, fueled by robust volume growth of 5.0%.
The revenue decline of 1.6% was primarily attributed to divestitures, business exits, and unfavorable currency translation.
"Our second quarter results are indicative of the exceptional progress we are making executing our Powering Care strategy," said Kimberly-Clark (NASDAQ:KMB) Chairman and CEO Mike Hsu. "This was a very active quarter and one of the strongest in our recent history. We delivered strong organic sales growth, fueled by the highest volume growth we’ve achieved in five years."
The company’s adjusted gross margin was 36.9%, down 180 basis points versus the prior year, reflecting planned investments to improve price-value tiers across the portfolio and incremental tariff-driven costs, partially offset by productivity gains. North America organic sales increased 4.3%, while International Personal Care organic sales grew 3.3%.
Following the strong performance, Kimberly-Clark raised its 2025 outlook, now expecting organic sales growth to outpace the weighted average growth in its categories and countries, which are currently growing at approximately 2%. The company anticipates adjusted operating profit to grow at a low-to-mid single-digit rate on a constant-currency basis versus the prior year.
Adjusted free cash flow is expected to be approximately $2 billion in 2025, with adjusted earnings per share projected to grow at a low-to-mid single-digit rate on a constant-currency basis.