Kimberly-Clark de Mexico: 4Q25 Preview

Amid a more favorable FX backdrop, we are revising our estimates modestly upward ahead of results. After a year marked by significant FX volatility and hedge-related pressures, the scenario into 4Q25 has shifted meaningfully. Following the sharp depreciation observed at the beginning of last year —when the MXN moved from the high-mid teens and closed the quarter at an average exchange rate of 20.4 — Kimberly-Clark de México implemented FX hedges that weighed on margins through most of 2025, particularly up to 3Q25.

In contrast, during 4Q25 the average exchange rate stood at P$18.3, resulting in a solid tailwind for Kimberly-Clark de México: (i) a materially stronger MXN vs. prior periods, coupled with the absence of hedge carry-over effects that had pressured margins in denominated in USD and minimal revenue exposure to the currency, KCM remains highly sensitive to FX movements. We estimate that each P$1 appreciation/depreciation in the exchange rate impacts gross margin by c.140bps, underscoring the significance of the current FX environment.

We have a neutral view on Consumer, and while KCM’s products are relatively resilient, we still see pricing power as currently limited. In some products, we continue to expect consumer trade down, yet the company’s new product pipeline and cost savings initiatives could partially offset some of the top-line and margin pressure, respectively, along with the aforementioned FX tailwinds.

Looking into 2026E, we forecast revenues of ~P$58.0bn, implying a 4.8% YoY growth, alongside 25.6% EBITDA margin, representing a 30bps expansion YoY.

The company is planned to report its 4Q25 results on Thursday January 22, 2025 AMC, with its CC to be hosted on January 23 at 9:30 am ET.