01—Abstract
Summary
Summary of the 10-Q filed August 4, 2026. Cited figures are marked; the original filing is the authoritative source.
Kimberly-Clark Corporation's second-quarter 2026 10-Q reports net sales of $4.19 billiona for the three months ended June 30, 2026, up 0.6% from $4.16 billion, with organic sales growth roughly flat (a 0.1% decline).
Operating profit rose to $633 millionb from $592 million, and diluted EPS from continuing operations was $1.22 versus $1.33 a year earlier. Adjusted diluted EPS was $1.80, up 10.4%, while net income attributable to Kimberly-Clark fell to $345 million from $509 million, reflecting a $60 million loss from discontinued operations driven by separation costs and tax charges tied to the IFP Transaction. For the six months, net sales were $8.35 billion (up 1.6%) and diluted EPS from continuing operations was $2.91 versus $2.72.
The quarter was shaped by several items management highlighted: a China diaper social media disruption that significantly hurt sales in China, an estimated $150 millionc of incremental input costs for the rest of 2026 tied to Middle East conflict, and $109 million of Kenvue Acquisition costs in the quarter. Reported results also benefited from one-time tariff refunds and a $39 million Brazil tax credit benefit. The IFP Transaction with Suzano was completed on July 1, 2026, after the quarter end, with Kimberly-Clark expected to record a pre-tax gain of more than $1.0 billion in the third quarter.
The pending Kenvue acquisition, expected to close in the second half of 2026, remains subject to foreign regulatory approvals. Balance sheet activity included $1.3 billiond of IFP Term Loan Facility borrowings (non-recourse to Kimberly-Clark after closing), which reduced short-term borrowings, and total continuing-operations debt of $6.5 billion at June 30, 2026, down from $7.2 billion at year-end 2025.
Cash provided by operations was $1.65 billion for the six months, helped by an insurance recovery and working capital changes, while capital spending rose to $776 million, and management expects full-year capital spending of about $1.3 billion. No shares were repurchased in the quarter.
02—Key points
Key Highlights
- Net sales of $4.19 billion in Q2 2026, up 0.6% versus the prior year, mainly from currency; organic sales were roughly flat, including a roughly 50 basis point negative impact from the China social media disruption.
- Gross margin rose to 38.3% from a prior-year level 330 basis points lower, helped by one-time tariff refunds and about $120 million of gross productivity savings; adjusted gross margin rose to 38.8%.
- Diluted EPS from continuing operations was $1.22 versus $1.33, while adjusted diluted EPS rose 10.4% to $1.80.
- Net income attributable to Kimberly-Clark fell to $345 million from $509 million, reflecting a $60 million loss from discontinued operations including $72 million of IFP separation costs.
- The IFP Transaction with Suzano closed July 1, 2026 for a cash price of about $1.3 billion, and Kimberly-Clark retained a 49% stake with an initial estimated fair value of about $1.2 billion; a pre-tax gain of more than $1.0 billion is expected in Q3 2026.
- Management estimates about $150 million of incremental input costs for the rest of 2026 from Middle East-related energy and raw material price volatility, before mitigation.
- Total debt from continuing operations declined to $6.5 billion from $7.2 billion, and the 2024 Transformation Initiative was extended through 2028 with total pre-tax costs expected at about $1.5 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Kimberly-Clark kept $0.08.
- Revenue$4.19B100.0%
- Cost of revenue−$2.59B61.7%
- Gross profit$1.60B38.3%
- Operating costs−$970.0M23.2%
- Operating income$633.0M15.1%
- Interest, other & tax−$288.0M6.9%
- Net income$345.0M8.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 4, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $4.19B$4.16B | +0.6% |
| Cost of Revenue | $2.59B$2.71B | −4.5% |
| Gross Profit | $1.60B$1.46B | +10.1% |
| Operating Income | $633.00M$592.00M | +6.9% |
| Interest Expense | $53.00M$67.00M | −20.9% |
| Net Income | $345.00M$509.00M | −32.2% |
| EPS (Basic) | $1.04$1.53 | −32.0% |
| EPS (Diluted) | $1.04$1.53 | −32.0% |
| Shares Outstanding (Basic) | 332.40M332.10M | +0.1% |
| Shares Outstanding (Diluted) | 333.30M333.30M | 0.0% |
05—Questions
Frequently Asked Questions
How did Kimberly-Clark perform in the second quarter of 2026?
Net sales rose 0.6% to $4.19 billion and operating profit rose to $633 million from $592 million. Diluted EPS from continuing operations was $1.22 versus $1.33, while adjusted diluted EPS increased 10.4% to $1.80, with the gap driven by Kenvue acquisition costs and 2024 Transformation Initiative charges.
What is the status of the IFP Transaction?
The IFP Transaction with Suzano was completed on July 1, 2026. Buyer acquired a 51% interest in the joint venture for a cash purchase price of about $1.3 billion, subject to post-closing adjustments, and Kimberly-Clark expects to recognize a pre-tax gain of more than $1.0 billion in discontinued operations in the third quarter of 2026.
What is the status of the pending Kenvue acquisition?
The Kenvue Acquisition is expected to close in the second half of 2026. Kenvue shareholders and Kimberly-Clark shareholders approved the transaction in January 2026, and the HSR waiting period expired February 4, 2026, but closing still requires other customary conditions, including foreign regulatory approvals. Kimberly-Clark incurred $157 million of acquisition-related costs in the first half of 2026.
What risks did management highlight for the rest of 2026?
Management pointed to the China diaper social media disruption, which is expected to further affect sales and profits in the near term, and an estimated $150 million of incremental input costs from Middle East conflict-related energy and raw material price volatility for the remainder of 2026, before mitigation actions.
How did the balance sheet and cash flows change?
Cash provided by operations was $1.65 billion for the six months ended June 30, 2026, up from $1.10 billion. Total debt from continuing operations fell to $6.5 billion from $7.2 billion, while capital spending rose to $776 million for the first half and full-year capital spending is expected to be about $1.3 billion. No shares were repurchased in the quarter.
06—Continue