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Kimberly-Clark's Q2 adjusted EPS rose 10.4%, while sales grew 0.6% but missed estimates.
Gross margin expanded 190 basis points as tariff refunds and productivity offset added investments.
China disruption and business exits pressured sales, while 2026 profit growth remains mid-single-digit.
Kimberly-Clark Corporation (KMB - Free Report) posted second-quarter 2026 results, with top line increasing year over year. However, net sales missed the Zacks Consensus Estimate.
Taking a Closer Look at KMB’s Q2 Results
Adjusted earnings attributable to Kimberly-Clark were $2.12 per share, up 10.4% year over year, driven by higher adjusted operating profit and income from discontinued operations. Adjusted earnings from continuing operations increased 10.4% year over year to $1.80. The Zacks Consensus Estimate for the metric was pinned at $2.00 per share.
Kimberly-Clark Corporation Price, Consensus and EPS Surprise
Kimberly-Clark’s sales were $4,189 million, marking 0.6% growth from $4,163 million in the prior-year quarter. However, the figure missed the Zacks Consensus Estimate of $4,232 million. Reported sales benefited from a 1.1% favorable currency impact. However, this was partly offset by a drag from divestitures and business exits, including the exit of the company’s U.S. private-label diaper business.
Organic sales slipped 0.1%, including an approximately 50-basis-point drag from a social media disruption affecting the company’s diaper business in China.
The adjusted gross margin expanded 190 basis points year over year to 38.8%. One-time tariff refunds and strong productivity savings more than offset product-trial investments and supply-chain-related spending.
Adjusted operating profit rose 6.2% to $757 million. The improvement reflected higher adjusted gross profit and favorable currency movements. These gains were partly offset by a roughly 210-basis-point headwind from business exits and the China disruption.
KMB Provides Q2 Insights by Segment
North America (“NA”) segment’s net sales declined 1.2% year over year to $2,698 million. Organic sales fell 0.7%, mainly due to an approximately 180-basis-point headwind from retail inventory changes and the Los Angeles Distribution Center fire.
NA’s operating profit increased 10.7% to $725 million. Tariff refunds and productivity gains more than offset business-exit pressures and increased brand investments.
The International Personal Care (“IPC”) segment’s net sales advanced 4% to $1,491 million, supported by a 3.1% currency benefit and 1% organic growth. Volume and mix increased a combined 1.2%, despite a roughly 140-basis-point sales headwind from the China social media disruption.
IPC’s operating profit grew 2.2% to $186 million. Productivity savings and currency benefits outweighed a roughly 440-basis-point profit headwind from the China social media disruption.
Kimberly-Clark’s Financial Health Snapshot
The company ended the quarter with cash and cash equivalents of $956 million, long-term debt of $6,474 million and total stockholders’ equity of $1,874 million.
For the six months ended June 30, 2026, cash provided by operations was $1,653 million. Management incurred capital spending of $776 million in the same time frame. The company returned $843 million to its shareholders via dividends.
What to Expect From KMB in 2026
Kimberly-Clark expects 2026 organic sales growth to trail the weighted average growth of the categories and countries it competes in by approximately 100 basis points. Those categories and markets were growing about 2% on a trailing 12-month basis.
The revised sales view primarily reflects realized and potential companywide impacts of about 100 basis points from the China social media disruption. Management expects the issue to continue affecting sales and profits in the near term.
Adjusted operating profit is projected to grow at a mid-single-digit rate on a constant-currency basis.
Adjusted EPS from continuing operations is expected to increase at a high-single-digit rate, including an approximately 30% rise in income from equity companies. Adjusted EPS attributable to Kimberly-Clark is forecasted to decline at a low-single-digit rate on a constant-currency basis.
This Zacks Rank #3 (Hold) company has gained 10.7% in the past three months compared with the industry’s 3.7% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Darling Ingredients Inc. (DAR - Free Report) develops, produces and sells sustainable natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America and internationally. At present, Darling Ingredients sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Darling Ingredients’ current fiscal-year sales and earnings implies growth of 13.2% and 685.3%, respectively, from the year-ago figures. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF holds a Zacks Rank #2 (Buy). Chefs' Warehouse delivered a trailing four-quarter earnings surprise of 30.4%, on average.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 10.8% and 24.7%, respectively, from the year-ago reported figures.
US Foods Holding Corp. (USFD - Free Report) engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2. US Foods Holding delivered a trailing four-quarter earnings surprise of 1.4%, on average.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago figures.
View the Zacks #1 Rank List
Image: Bigstock
Kimberly-Clark Q2 Earnings Rise Y/Y, Gross Margin Expands
Key Takeaways
Kimberly-Clark Corporation (KMB - Free Report) posted second-quarter 2026 results, with top line increasing year over year. However, net sales missed the Zacks Consensus Estimate.
Taking a Closer Look at KMB’s Q2 Results
Adjusted earnings attributable to Kimberly-Clark were $2.12 per share, up 10.4% year over year, driven by higher adjusted operating profit and income from discontinued operations. Adjusted earnings from continuing operations increased 10.4% year over year to $1.80. The Zacks Consensus Estimate for the metric was pinned at $2.00 per share.
Kimberly-Clark Corporation Price, Consensus and EPS Surprise
Kimberly-Clark Corporation price-consensus-eps-surprise-chart | Kimberly-Clark Corporation Quote
Kimberly-Clark’s sales were $4,189 million, marking 0.6% growth from $4,163 million in the prior-year quarter. However, the figure missed the Zacks Consensus Estimate of $4,232 million. Reported sales benefited from a 1.1% favorable currency impact. However, this was partly offset by a drag from divestitures and business exits, including the exit of the company’s U.S. private-label diaper business.
Organic sales slipped 0.1%, including an approximately 50-basis-point drag from a social media disruption affecting the company’s diaper business in China.
The adjusted gross margin expanded 190 basis points year over year to 38.8%. One-time tariff refunds and strong productivity savings more than offset product-trial investments and supply-chain-related spending.
Adjusted operating profit rose 6.2% to $757 million. The improvement reflected higher adjusted gross profit and favorable currency movements. These gains were partly offset by a roughly 210-basis-point headwind from business exits and the China disruption.
KMB Provides Q2 Insights by Segment
North America (“NA”) segment’s net sales declined 1.2% year over year to $2,698 million. Organic sales fell 0.7%, mainly due to an approximately 180-basis-point headwind from retail inventory changes and the Los Angeles Distribution Center fire.
NA’s operating profit increased 10.7% to $725 million. Tariff refunds and productivity gains more than offset business-exit pressures and increased brand investments.
The International Personal Care (“IPC”) segment’s net sales advanced 4% to $1,491 million, supported by a 3.1% currency benefit and 1% organic growth. Volume and mix increased a combined 1.2%, despite a roughly 140-basis-point sales headwind from the China social media disruption.
IPC’s operating profit grew 2.2% to $186 million. Productivity savings and currency benefits outweighed a roughly 440-basis-point profit headwind from the China social media disruption.
Kimberly-Clark’s Financial Health Snapshot
The company ended the quarter with cash and cash equivalents of $956 million, long-term debt of $6,474 million and total stockholders’ equity of $1,874 million.
For the six months ended June 30, 2026, cash provided by operations was $1,653 million. Management incurred capital spending of $776 million in the same time frame. The company returned $843 million to its shareholders via dividends.
What to Expect From KMB in 2026
Kimberly-Clark expects 2026 organic sales growth to trail the weighted average growth of the categories and countries it competes in by approximately 100 basis points. Those categories and markets were growing about 2% on a trailing 12-month basis.
The revised sales view primarily reflects realized and potential companywide impacts of about 100 basis points from the China social media disruption. Management expects the issue to continue affecting sales and profits in the near term.
Adjusted operating profit is projected to grow at a mid-single-digit rate on a constant-currency basis.
Adjusted EPS from continuing operations is expected to increase at a high-single-digit rate, including an approximately 30% rise in income from equity companies. Adjusted EPS attributable to Kimberly-Clark is forecasted to decline at a low-single-digit rate on a constant-currency basis.
This Zacks Rank #3 (Hold) company has gained 10.7% in the past three months compared with the industry’s 3.7% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Darling Ingredients Inc. (DAR - Free Report) develops, produces and sells sustainable natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America and internationally. At present, Darling Ingredients sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Darling Ingredients’ current fiscal-year sales and earnings implies growth of 13.2% and 685.3%, respectively, from the year-ago figures. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF holds a Zacks Rank #2 (Buy). Chefs' Warehouse delivered a trailing four-quarter earnings surprise of 30.4%, on average.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 10.8% and 24.7%, respectively, from the year-ago reported figures.
US Foods Holding Corp. (USFD - Free Report) engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2. US Foods Holding delivered a trailing four-quarter earnings surprise of 1.4%, on average.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago figures.