Organic Growth Performance: Kimberly-Clark's organic sales growth in Q1 2025 was below expectations, coming in below approximately 2% (1.5%-2% range) compared to 5.6% growth in Q1 2024. Factors contributing to this include softer category growth, fewer shipment days, reduced private label shipments, and planned strategic pricing investments. Yearly forecast anticipates a ramp-up in organic sales growth post Q1, targeting growth higher than 1.5%-2% for the year through stronger product innovations and market activations.

Tariff-Related Costs: The company is facing a $300 million headwind from tariffs, which will impact gross profit. Specifically, approximately two-thirds of this cost is attributed to 145% tariffs on China imports, with others stemming from reciprocal tariffs on various countries. The expectation is that approximately one-third of this impact can be mitigated through supply chain adjustments and productivity measures over the year.

Sustained Investment in Innovation: Despite the cost pressures from tariffs, Kimberly-Clark plans to maintain its marketing investments at around a 6% level. The goal is to support new product innovations and improved market propositions, particularly focusing on value offerings in response to the budget-conscious consumer. Key innovations like Huggies Snug & Dry are expected to drive future market growth through enhanced consumer acceptance.