Kimberly-Clark expects US$300 million impact from tariffs and adjusts 2025 projections

Kimberly-Clark, the U.S.-based multinational behind brands like Huggies, Kleenex, and Kotex, announced that its production costs are expected to increase by US$300 million in 2025 due to tariffs imposed by the U.S. government.

According to the company, the increase stems from tariffs as high as 145% on products imported from China, as well as reciprocal tariffs of 10% on supplier countries and an additional 25% imposed by other nations in retaliation to U.S. trade policies.

“The current environment now means higher costs across our global supply chain compared to our expectations earlier in the year. However, we remain confident in our ability to offset these costs over time”, said Kimberly-Clark CEO Mike Hsu in the company’s Q1 2025 financial report.

Speaking with analysts after the results were released, Hsu acknowledged that the change in the trade environment presents a short-term challenge but also sees it as an opportunity to restructure the supply network and accelerate savings — though he admitted such measures will take time.

The executive warned that tariff policies are likely to affect the average U.S. consumer, prompting the company to focus on ensuring its products remain affordable while maintaining market competitiveness.

 

“We believe we can mitigate most of the cost by changing sourcing, and that’s why there is an impact this year, which we believe we’ll offset next year”, Hsu added.

Kimberly-Clark CFO Nelson Urdaneta explained that although the estimated impact is US$300 million, not all of the company’s production is affected. Around 80% of the products sold in the U.S. are manufactured locally, meaning only 20% of its cost base in the country is exposed to tariffs.

He emphasized that shifting sourcing strategies is not an immediate solution, as it involves redesigning logistics and operations strategies that cannot be implemented overnight. The company expects to mitigate one-third of the impact this year and the remainder in 2026.

“We are moving quickly with actions to mitigate these costs and, frankly, the lessons we learned during the 2021, 2022, and 2023 cycles have been very helpful. And the other part is that we’re one year into our Powering Care transformation”, Urdaneta highlighted.

He also said that, due to the impact of tariffs, the company has adjusted its growth outlook for 2025. It now anticipates flat operating profit and earnings per share (EPS), in contrast to previous expectations of mid- to high-single-digit growth.

Despite the pressure, Urdaneta stressed that the company does not plan to cut investments in product innovation.