10-Q · April 28, 2026
Kimberly‑Clark reported Q1 2026 net sales of $4,163 million, up 2.7% year-over-year, with operating profit rising 19.3% to $753 million and diluted EPS from continuing operations increasing 22.3% to $1.70. Cash provided…
Earnings analysis · 10-Q
KMB earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Kimberly-Clark delivered modest Q2 sales growth of 0.6% and substantial gross-margin expansion to 38.3%, with adjusted EPS rising 10.4% to $1.80. However, reported EPS fell to $1.04 due to discontinued-operation losses…
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Kimberly-Clark delivered modest Q2 sales growth of 0.6% and substantial gross-margin expansion to 38.3%, with adjusted EPS rising 10.4% to $1.80. However, reported EPS fell to $1.04 due to discontinued-operation losses and elevated taxes, while China diaper disruption, higher expected energy-linked costs, and Kenvue-related funding and execution needs temper the earnings improvement. Cash flow improved materially, and continuing-operations debt declined by $700 million versus year-end.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.04
What stood out
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Revenue modestly higher, organic sales flat
Q2 net sales were $4.189 billion, up 0.6% year over year from $4.163 billion and up 0.7% from $4.160 billion in Q1 2026. Organic sales were effectively flat, declining 0.1%.
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Gross margin expanded sharply
Gross margin expanded 330 basis points year over year to 38.3% on gross profit of $1.603 billion; adjusted gross margin rose 190 basis points to 38.8%, aided by approximately $120 million of productivity savings and one-time tariff refunds.
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Operating profit rises despite transaction costs
Operating profit increased 6.9% to $633 million, although operating margin was 15.1%, down about 300 basis points sequentially from 18.1% in Q1 2026. Adjusted operating profit rose 6.2% to $757 million.
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Segment profits grew despite uneven sales
North America operating profit increased 10.7% to $725 million despite a 1.2% sales decline, while IPC revenue grew 4.0% to $1.491 billion and operating profit increased 2.2% to $186 million.
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Cash generation strengthened
Six-month operating cash flow rose to $1.7 billion from $1.1 billion. After $776 million of capital spending, derived free cash flow was approximately $924 million, versus approximately $699 million in the prior-year period.
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Debt balance declined by $700 million
Total continuing-operations debt fell to $6.5 billion at June 30, 2026 from $7.2 billion at December 31, 2025. Short-term debt was only $31 million at quarter-end.
What to watch
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China diaper disruption remains a near-term drag
China diaper social-media allegations reduced total Q2 organic sales by approximately 50 basis points and IPC organic sales by 140 basis points; IPC operating profit absorbed a 440-basis-point impact. Management expects further sales and profit effects in the near term.
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Energy-linked input inflation could pressure margins
Assuming oil prices remain at current levels, management estimates approximately $150 million of incremental input costs during the remainder of 2026 before mitigation. Q2 adjusted operating profit was also pressured by 2.8% from net price and 3.0% from volume.
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Kenvue acquisition adds financing and execution risk
The pending Kenvue transaction required $109 million of Q2 acquisition-related costs and contemplates approximately $6.7 billion of cash consideration plus issuance of about 280 million KMB shares. Available bridge financing commitments totaled $3.9 billion after $3.8 billion was terminated.
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Reported EPS declined as tax rate increased
Reported diluted EPS from continuing operations fell 8.3% year over year to $1.22 from $1.33, and total reported diluted EPS was $1.04 after a $0.18 per-share loss from discontinued operations. The reported effective tax rate rose to 37.9% from 22.6%.
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North America sales faced inventory and fire impacts
North America Q2 revenue fell 1.2% to $2.698 billion; organic sales declined 0.7%, including a 1.0% effect from retail inventory changes and a 0.8% impact from the Los Angeles distribution-center fire.
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Transformation remains a sizable execution commitment
The transformation initiative is expected to carry approximately $1.5 billion of pre-tax costs, about 60% cash, through its extension to the end of 2028. Cumulative pre-tax charges were $913 million through June 30, 2026.
Management's outlook
No numeric revenue or EPS outlook was included in the 10-Q. Management expects approximately $1.3 billion of full-year 2026 capital spending and estimates approximately $150 million of incremental input costs for the remainder of 2026 if oil prices remain at current levels; the previously disclosed outlook was lowered for China disruption effects.
Earlier filings 4
10-K · February 12, 2026
Kimberly‑Clark is executing a strategic pivot (Powering Care) while pursuing two large portfolio transactions: a pending acquisition of Kenvue (stock + cash) and the IFP joint‑venture with Suzano (51% sale for ~ $1.7…
10-Q · August 1, 2025
Kimberly‑Clark reported Q2 net sales of $4,163 million, down $68 million (1.6%) versus prior-year quarter, with gross margin contracting to 35.0% (from 37.7%) but operating profit rising to $592 million (up $53 million)…
10-Q · October 22, 2024
Kimberly‑Clark reported Q3 net sales of $4,952 million, down $180 million versus Q3 2023 ($5,132 million), while diluted EPS rose to $2.69 from $1.73 a year ago. Gross margin expanded slightly to ~36.0% and operating…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.