Kimberly-Clark Announces Second Quarter and First Half 2026 Results, Updates 2026 Outlook (Form 8-K)

Kimberly-Clark Announces Second Quarter and First Half 2026 Results, Updates 2026 Outlook

Makes significant strides in strategic transformation

while sustaining strong business momentum

DALLAS, August 4, 2026 - Kimberly-Clark Corporation (Nasdaq: KMB) today reported second quarter 2026 results reflecting sustained, innovation-driven volume-plus-mix gains and industry-leading productivity that more than offset several significant, discrete unfavorable impacts.

"Our achievements in the first half of the year show that Kimberly-Clark's durable operating model is enabling us to accelerate our transformation while sustaining the momentum of our brands and businesses," said Kimberly-Clark Chairman and CEO Mike Hsu. "Our team is executing with agility and addressing discrete headwinds that will moderate our growth and earnings potential in 2026. We continue to invest in our innovation-led growth agenda and superior brand propositions that win with consumers across the value spectrum. Combined with industry-leading gross productivity savings, we're ensuring that our base business is well positioned to drive sustainable growth in 2027 and beyond."

Hsu continued, "We also made significant strides to advance the next phase of Kimberly-Clark's Powering Care strategy. We successfully launched our strategic joint venture with Suzano: Arbex. We entered the next phase of development of our next-generation, sustainable materials innovation platform by announcing the construction of an alternative natural fibers pilot plant in the Southwest of the United States. Our pending acquisition of Kenvue remains on track to close by the end of this year. In sum, our vision for a new kind of health and wellness company, reimagined care for billions of people around the world, and lasting value for shareholders is becoming clearer by the day."

The Company also noted that its second-quarter results were negatively impacted by a discrete disruption stemming from false allegations regarding the quality of certain diaper brands in the China market. Independent testing conducted by a government-certified third party confirmed the quality and safety of the Company's products, refuting the false allegations. While the Company is effectively navigating the situation, the impact from the spread of false claims across social media significantly impacted the Company's diaper sales in China in the second quarter and is expected to further impact sales and profits in the near term.

Quarter Highlights

•Unless otherwise noted, reported results in this release are based on continuing operations and exclude the International Family Care and Professional ("IFP") business, which is reported as discontinued operations.

•Delivered net sales of $4.2 billion, up 0.6 percent, with organic sales growth broadly in line with the prior year.

•Gross margin was 38.3 percent; adjusted gross margin was 38.8 percent, up 190 basis points versus the prior year.

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•Operating profit for the quarter was $633 million, while adjusted operating profit was $757 million, up 6.2 percent versus the prior year driven by one-time tariff refunds, strong productivity savings and favorable currency impacts, partially offset by business exits and the China social media disruption, planned investments to drive new product trial and supply chain related investments.

•Diluted earnings per share ("EPS") from continuing operations were $1.22; adjusted EPS from continuing operations were $1.80, up 10.4 percent versus the prior year.

•Diluted EPS attributable to Kimberly-Clark were $1.04; adjusted EPS attributable to Kimberly-Clark were $2.12, up 10.4 percent versus the prior year.

Second Quarter 2026 Results

Net sales of $4.2 billion increased 0.6 percent, as favorable currency impacts of 1.1 percent were partially offset by the exit of the company's private label diaper business in the US. Organic sales growth was broadly in line with the prior year, including an approximately 50 basis point negative impact from the China social media disruption.

Gross margin was 38.3 percent compared to 35.0 percent in the prior year, inclusive of $22 million, or approximately 50 basis points, and $82 million, or approximately 200 basis points, respectively, of charges related to the 2024 Transformation Initiative. Excluding these charges, adjusted gross margin was 38.8 percent, an increase of 190 basis points versus the prior year as one-time tariff refunds and strong productivity savings were partially offset by planned investments to drive new product trial and improve price:value tiers across the portfolio, as well as supply chain related investments.

Second quarter operating profit was $633 million compared to $592 million in the prior year. Current quarter results included $54 million of charges related to the 2024 Transformation Initiative, $109 million related to the Kenvue acquisition and a $39 million benefit related to Brazil business tax credits. Prior year results included $121 million of charges related to the 2024 Transformation Initiative. Excluding these items, adjusted operating profit was $757 million compared to $713 million, an increase of 6.2 percent, driven by the increase in adjusted gross profit discussed above and favorable currency impacts. These gains were partially offset by an approximate 210 basis point headwind from a combination of business exits and the China social media disruption.

Net interest expense was $49 million versus $62 million in the prior year primarily driven by lower interest expense.

The second quarter effective tax rate was 37.9 percent, compared to 22.6 percent in the prior year. On an adjusted basis, the effective rate was 21.1 percent compared to 20.9 percent in the prior year.

Net income of equity companies was $55 million compared to $47 million in the prior year driven primarily by favorable currency impacts and pricing net of cost inflation, partially offset by higher general and administrative expenses.

Income (loss) from discontinued operations, net of income taxes was $(60) million compared to $68 million in the prior year, inclusive of $72 million and $33 million, respectively, of pre-tax separation costs. Current quarter results also included net tax charges of $107 million related to the impacts from certain reorganization activities associated with the IFP Transaction. Excluding these amounts, adjusted income from discontinued operations was $107 million compared to $99 million in the prior year, an increase of 8.1 percent primarily driven by lower depreciation expense in the current year due to reporting requirements for discontinued operations.

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Diluted EPS from continuing operations were $1.22 compared to $1.33 in the prior year. These reported amounts are inclusive of net charges of $0.58 and $0.30, respectively, for the certain items discussed above that management doesn't believe reflect our underlying and ongoing operations. Excluding these items, adjusted EPS from continuing operations were $1.80, an increase of 10.4 percent versus the prior year, driven by higher adjusted operating profit, lower net interest expense and higher income from equity companies.

Diluted EPS attributable to Kimberly-Clark were $1.04 compared to $1.53 in the prior year. These reported amounts are inclusive of net charges of $1.08 and $0.39, respectively, for certain items discussed above that management doesn't believe reflect our underlying and ongoing operations. Excluding these items, adjusted EPS attributable to Kimberly-Clark were $2.12, up 10.4 percent, driven by higher adjusted operating profit and income from discontinued operations.

Year-To-Date Results

For the first half of the year, net sales of $8.4 billion increased 1.6 percent, as organic sales growth of 1.2 percent and favorable currency impacts of 1.5 percent were partially offset by a 1.1 percent decline from the exit of the company's private label diaper business in the US. Organic sales growth was driven by a 1.3 percent increase in volume from broad growth within each segment.

For the first half of the year, gross margin was 37.6 percent compared to 36.1 percent in the prior year, inclusive of $64 million, or approximately 80 basis points, and $135 million, or approximately 160 basis points, respectively, of charges related to the 2024 Transformation Initiative. Excluding these charges, adjusted gross margin was 38.3 percent, up 60 basis points versus the prior year driven by one-time tariff refunds and strong productivity gains, partially offset by unfavorable pricing net of cost inflation and supply chain related investments.

Year-to-date operating profit was $1.4 billion compared to $1.2 billion in the prior year, inclusive of net charges of $103 million and $196 million, respectively, for certain items that management does not believe reflect our underlying and ongoing operations. Excluding these items, adjusted operating profit was $1.5 billion compared to $1.4 billion, an increase of 4.9 percent driven by the increase in adjusted gross profit discussed above and favorable currency impacts, partially offset by a 290 basis point headwind from business exits as well as increased brand investments.

Year-to-date effective tax rate was 30.3 percent, compared to 23.1 percent in the prior year. On an adjusted basis, the effective rate was 23.6 percent compared to 20.8 percent in the prior year. The first half of 2025 benefited from the resolution of certain tax matters.

Net income of equity companies was $108 million compared to $91 million in the prior year driven primarily by favorable currency impacts and pricing net of cost inflation, partially offset by higher general and administrative expenses.

Income (loss) from discontinued operations, net of income taxes was $41 million compared to $171 million in the prior year, inclusive of $104 million and $33 million, respectively, of pre-tax separation costs. Current year results also included net tax charges of $107 million related to the impacts from certain reorganization activities associated with the IFP Transaction. Excluding these amounts, adjusted income from discontinued operations was $232 million compared to $202 million in the prior year, an increase of 14.9 percent primarily driven by lower depreciation expense in the current year due to reporting requirements for discontinued operations.

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Through the first half of the year diluted EPS from continuing operations were $2.91 compared to $2.72 in the prior year. These reported amounts are inclusive of net charges of $0.49 and $0.53, respectively, for the certain items discussed above that management doesn't believe reflect our underlying and ongoing operations. Excluding these items, adjusted EPS from continuing operations were $3.40, an increase of 4.6 percent, driven by higher adjusted operating profit, lower net interest expense and higher income from equity companies, partially offset by a higher adjusted effective tax rate.

Diluted EPS attributable to Kimberly-Clark were $3.03 compared to $3.23 in the prior year. These reported amounts are inclusive of net charges of $1.06 and $0.62, respectively, for certain items discussed above that management doesn't believe reflect our underlying and ongoing operations. Excluding these items, adjusted EPS attributable to Kimberly-Clark were $4.09 compared to $3.85 last year, up 6.2 percent driven by higher adjusted operating profit and income from discontinued operations, partially offset by a higher adjusted effective tax rate.

Business Segment Results

(Unaudited)

Q2 change vs year ago (%)						Volume						Mix/Other						Net Price						Divestitures and Business Exits(c)						Currency Translation						Total(a)						Organic(b)
Consolidated						(0.1)						0.4						(0.5)						(0.4)						1.1						0.6						(0.1)
NA						(0.3)						0.2						(0.7)						(0.5)						0.1						(1.2)						(0.7)
IPC						0.3						0.9						(0.2)						(0.1)						3.1						4.0						1.0

YTD change vs year ago (%)						Volume						Mix/Other						Net Price						Divestitures and Business Exits(c)						Currency Translation						Total(a)						Organic(b)
Consolidated						1.3						0.4						(0.5)						(1.1)						1.5						1.6						1.2
NA						0.8						-						(0.3)						(1.6)						0.2						(0.9)						0.5
IPC						2.2						1.2						(0.8)						-						4.1						6.5						2.5

(a) Total may not sum across due to rounding.

(b) Represents the change in net sales excluding the impacts of currency translation and divestitures and business exits. Organic Sales Growth is a non-GAAP financial measure. See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to non-GAAP measures.

(c) Impact of the exit of the Company's private label diaper business in the United States and other exited businesses and markets in conjunction with the 2024 Transformation Initiative.

North America ("NA")

Net sales of $2.7 billion decreased 1.2 percent in the quarter, including a 0.5 percent impact from the exit of the company's private label diaper business in the US. Organic sales decreased 0.7 percent primarily driven by an approximate 180 basis point headwind from a combination of changes in retail inventories and impacts from the Los Angeles Distribution Center fire. Year-to-date organic sales increased 0.5 percent, as volume growth of 0.8 percent, led by gains in Consumer Tissue and Professional categories, was partially offset by price-related investments to drive consumer trial of new products.

Operating profit of $725 million increased 10.7 percent in the quarter driven by one-time tariff refunds and strong productivity savings that more than offset a 110 basis point headwind from business exits and increased brand

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investments. Year-to-date operating profit was up 1.1 percent as cost favorability and strong productivity savings were partially offset by a 310 basis point headwind from business exits, as well as increased brand investments.

International Personal Care ("IPC")

Net sales of $1.5 billion increased 4.0 percent in the quarter driven by favorable currency impacts of 3.1 percent and organic sales growth of 1.0 percent. Organic sales benefitted from strong volume-plus-mix led growth of 1.2 percent, reflecting improvements in consumer value propositions across the portfolio that more than offset a 140 basis point headwind from the China social media disruption. Personal Care categories gained weighted share in the quarter with strong gains in Diapers and Pants. Year-to-date organic sales increased 2.5 percent led by volume growth and improved portfolio mix of 2.2 percent and 1.2 percent, respectively, partially offset by price investments.

Operating profit of $186 million increased 2.2 percent in the quarter driven by strong productivity savings and favorable currency impacts that more than offset a 440 basis point headwind from the China social media disruption. Year-to-date operating profit was up 12.5 percent driven by strong productivity savings, favorable currency impacts, volume-plus-mix led net sales growth, and overhead efficiencies.

Cash Flow and Balance Sheet

For the first six months of 2026 cash provided by operations (inclusive of discontinued operations) was $1.7 billion compared to $1.1 billion last year. Year-to-date capital spending was $776 million compared to $401 million last year and the company returned $843 million to shareholders through dividends. Total debt from continuing operations was $6.5 billion as of June 30, 2026, down from $7.2 billion as of December 31, 2025.

2026 Outlook

The Company now expects 2026 Organic Sales Growth to be approximately 100 basis points below its weighted average category growth in the categories and countries it competes, currently 2% on a trailing twelve-month basis. This primarily reflects realized and potential unfavorable impacts amounting to approximately 100 basis points at a total company level from the China social media disruptions. Adjusted Operating Profit is now expected to grow mid-single digits on a constant-currency basis. Adjusted Earnings Per Share from Continuing Operations are expected to grow high single digits on a constant-currency basis including an approximately 30 percent increase in income from equity companies versus 2025. Adjusted Earnings Per Share Attributable to Kimberly-Clark are expected to see a low single digit decline on a constant-currency basis.

This outlook reflects assumptions subject to change given the macro environment.

Supplemental Materials and Live Webcast

Supplemental materials will be available at approximately 6:30 a.m. Eastern Daylight Time in the Investor Relations section of the Kimberly-Clark website. The company will host a live Q&A session with investors and analysts on August 4, 2026, at 8:00 a.m. Eastern Daylight Time. The supplemental materials and Kimberly-Clark's Q&A session can be accessed at the Investor Relations section of the Kimberly-Clark website. A replay of the webcast will be available following the event through the same website.

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About Kimberly-Clark

Kimberly-Clark (NASDAQ: KMB) and its trusted brands are an indispensable part of life for people in more than 175 countries and territories. Our portfolio of brands, including Huggies, Kleenex, Scott, Kotex, Cottonelle, Poise, Depend, Pull-Ups, Goodnites, Intimus, Plenitud, Sweety, Softex, Viva and WypAll, hold No. 1 or No. 2 share positions in approximately 70 countries. Our company's purpose is to deliver Better Care for a Better World. We are committed to using sustainable practices designed to support a healthy planet, build strong communities, and enable our business to thrive for decades to come. To keep up with the latest news and learn more about the company's more than 150-year history of innovation, visit the Kimberly-Clark website.

Copies of Kimberly-Clark's Annual Report to Stockholders and its proxy statements and other SEC filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, are made available free of charge on the company's website on the same day they are filed with the SEC. To view these filings, visit the Investors section of the company's website.