KP Tissue (KPT) Q2 2025 earnings summary

Executive summary

• Revenue increased 5.2% year-over-year to $536.1 million in Q2 2025, driven by higher consumer segment sales, favorable pricing, and FX gains, partially offset by lower away-from-home volume.

• Adjusted EBITDA rose 11.0% year-over-year to $72.5 million, with net income more than doubling to $22.1 million, supported by FX gains, income tax recovery, and improved EBITDA.

• Strategic investments include a $35 million upgrade at the Memphis facility and continued expansion in the U.S., with network production rates exceeding targets.

• Maintained leading market share in Canadian bathroom and facial tissue categories, with market share in facial tissue growing and bathroom tissue share slightly declining due to prior price increases.

• U.S. sales grew 12% for the first half of 2025, though Q2 growth slowed due to front-loaded shipments and away-from-home market softness.

Financial highlights

• Q2 2025 sales reached $536.1 million, up 5.2% year-over-year, with Canadian revenue up 7.4% and U.S. revenue up 2.4%.

• Adjusted EBITDA was $72.5 million, up 11% year-over-year, with a margin of 13.5%.

• Net income for Q2 2025 was $22.1 million, compared to $10.6 million in Q2 2024, and net income margin improved to 4.1% from 2.1%.

• Sequentially, revenue declined 1.8% from Q1 2025, mainly due to lower U.S. sales volume after front-loaded shipments in Q1.

• Cost of sales increased 7.2% to $462.2 million, representing 86.2% of revenue.

Outlook and guidance

• Q3 2025 adjusted EBITDA is expected in the range of $75 million to $80 million, reflecting anticipated recovery and margin management.

• Full-year 2025 capital expenditures are anticipated between $70 million and $90 million, including investments in Memphis and Sherbrooke.

• Continued focus on margin management and expanding U.S. premium private label amid economic volatility.