Kimberly-Clark (KMB) Q2 2026 Prepared Remarks earnings summary

Executive summary

• Achieved net sales of $4.2 billion in Q2 2026, up 0.6% year-over-year, with organic sales flat due to China social media disruption impacting diaper sales.

• Adjusted operating profit rose 6.2% to $757 million, driven by gross productivity savings and one-time tariff refunds, despite headwinds from business exits and China disruption.

• Adjusted EPS from continuing operations increased 10.4% to $1.80, supported by productivity gains and lower net interest expense.

• Transformation initiatives advanced, including the Arbex joint venture with Suzano, Kenvue acquisition progress, and alternative natural fiber innovation.

• Maintained strong brand momentum through innovation, marketing, and disciplined execution across key markets, especially in North America and Asia.

Financial highlights

• Q2 2026 net sales were $4.2 billion (+0.6%); organic sales growth was -0.1% year-over-year.

• Q2 adjusted operating profit was $757 million (+6.2%); adjusted gross margin was 38.8% (+190 bps).

• Adjusted EPS from continuing operations was $1.80 (+10.4%); adjusted EPS attributable to the company was $2.12 (+10.4%).

• Adjusted free cash flow for H1 2026 reached $1.1 billion, on pace for $2 billion for the full year.

• Cash provided by operations in H1 was $1.7 billion; capital spending was $776 million; $843 million returned to shareholders via dividends.

Outlook and guidance

• 2026 organic sales growth expected to be ~100 bps below category average due to China disruption.

• Adjusted operating profit projected to grow mid-single digits (constant currency); adjusted EPS from continuing operations to grow high single digits.

• Adjusted EPS attributable expected to see a low single-digit decline (constant currency).

• Free cash flow guidance maintained at ~$2 billion, with capital investments increasing to ~$1.3 billion.

• The Kenvue acquisition is expected to close in H2 2026, subject to regulatory approvals.