Kimberly-Clark Reports Q2 and First-Half 2026 Results, Updates Full-Year Outlook Amid Strategic Transformation

Kimberly-Clark Corporation reported second-quarter and first-half 2026 financial results, highlighting continued progress in its strategic transformation, innovation-led growth initiatives, and productivity improvements, while updating its outlook for the remainder of the year.

For the second quarter ended June 30, 2026, the company posted net sales of $4.2 billion, an increase of 0.6% year over year. Organic sales were broadly in line with the prior year, while adjusted operating profit increased 6.2% to $757 million. Adjusted earnings per share (EPS) from continuing operations rose 10.4% to $1.80, supported by productivity savings, one-time tariff refunds, and favorable currency impacts. Gross margin improved to 38.3%, with adjusted gross margin reaching 38.8%, up 190 basis points from the prior year.

Kimberly-Clark said quarterly performance was negatively affected by false allegations regarding the quality of certain diaper brands in China. The company stated that independent testing conducted by a government-certified third party confirmed the quality and safety of its products, but the spread of the claims across social media significantly reduced diaper sales in China during the quarter and is expected to continue affecting sales and profits in the near term.

Chairman and Chief Executive Officer Mike Hsu said the company continued to accelerate its transformation while maintaining business momentum. During the quarter, Kimberly-Clark launched its strategic joint venture with Suzano, Arbex, announced construction of an alternative natural fibers pilot plant in the southwestern United States, and said its pending acquisition of Kenvue remains on track to close by the end of 2026.

For the first six months of 2026, net sales increased 1.6% to $8.4 billion, driven by 1.2% organic sales growth and favorable currency effects. Adjusted operating profit rose 4.9%, while adjusted EPS from continuing operations increased 4.6% to $3.40. Operating cash flow reached $1.7 billion, compared with $1.1 billion in the same period last year. Capital expenditure totaled $776 million, and the company returned $843 million to shareholders through dividends. Total debt from continuing operations declined to $6.5 billion as of June 30, 2026, from $7.2 billion at the end of 2025.

By business segment, North America recorded $2.7 billion in quarterly net sales, down 1.2%, primarily reflecting the exit of the company's private-label diaper business and impacts from retail inventory changes and the Los Angeles Distribution Center fire. International Personal Care generated $1.5 billion in quarterly net sales, up 4.0%, supported by favorable currency movements and volume-plus-mix growth despite the China market disruption.

Looking ahead, Kimberly-Clark revised its 2026 guidance, stating that organic sales growth is now expected to be approximately 100 basis points below its weighted average category growth, primarily reflecting the impact of the China social media disruption. The company expects adjusted operating profit to grow at a mid-single-digit rate on a constant-currency basis and adjusted EPS from continuing operations to increase at a high-single-digit rate. Adjusted EPS attributable to Kimberly-Clark is projected to decline at a low-single-digit rate on a constant-currency basis.