Kimberly-Clark (KMB) Q2 2026 (Q&A) earnings summary

Executive summary

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

• Adjusted operating profit for Q2 rose 6.2% to $757 million, and adjusted EPS from continuing operations increased 10.4% to $1.80, driven by productivity gains and one-time tariff refunds.

• Transformation initiatives advanced, including the Arbex joint venture with Suzano, a new sustainable materials pilot plant, and the pending Kenvue acquisition.

• Q2 results were negatively impacted by false social media allegations affecting diaper sales in China, with independent tests confirming product safety.

• The IFP segment was divested, with the transaction closing July 1, 2026, and results reported as discontinued operations.

Financial highlights

• Q2 2026 net income attributable to shareholders was $345 million, down 32% year-over-year, mainly due to discontinued operations and higher tax expense.

• Q2 gross margin was 38.3%; adjusted gross margin was 38.8%, up 190 bps year-over-year.

• Q2 operating profit was $633 million; adjusted operating profit was $757 million, up 6.2% year-over-year.

• Q2 diluted EPS from continuing operations was $1.22; adjusted EPS was $1.80, up 10.4% year-over-year.

• Cash provided by operations for the first half was $1.7 billion, up from $1.1 billion last year.

Outlook and guidance

• 2026 organic sales growth expected to be about 100 bps below weighted average category growth due to China disruption and business exits.

• Adjusted operating profit expected to grow mid-single digits, and adjusted EPS from continuing operations to grow high single digits on a constant-currency basis.

• Adjusted free cash flow for 2026 expected to be ~$2 billion, with capital expenditures accelerating to ~$1.3 billion.

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

• Continued near-term headwinds in China and incremental input costs of ~$150 million from Middle East conflict.