Earnings release
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Kimberly-Clark Announces Second Quarter AndFirst Half 2026 Results, Updates 2026 Outlook Aug 4, 2026 Makes significant strides in strategic transformation while sustaining strong business momentum DALLAS, Aug. 4, 2026 /PRNewswire/ -- 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 whilesustaining the momentum of our brands and businesses," said Kimberly-Clark Chairman and CEO Mike Hsu. "Our team is executing with agility andaddressing discrete headwinds that will moderate our growth and earnings potential in 2026. We continue to invest in our innovation-led growth agendaand superior brand propositions that win with consumers across the value spectrum. Combined with industry-leading gross productivity savings, we'reensuring 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 ourstrategic joint venture with Suzano: Arbex. We entered the next phase of development of our next-generation, sustainable materials innovation platformby announcing the construction of an alternative natural fibers pilot plant in the Southwest of the United States. Our pending acquisition of Kenvueremains 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 ofpeople 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 thequality of certain diaper brands in the China market. Independent testing conducted by a government-certified third party confirmed the quality andsafety of the Company's products, refuting the false allegations. While the Company is effectively navigating the situation, the impact from the spreadof false claims across social media significantly impacted the Company's diaper sales in China in the second quarter and is expected to further impactsales 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 andProfessional ("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.Operating profit for the quarter was $633 million, while adjusted operating profit was $757 million, up 6.2 percent versus the prior year driven byone-time tariff refunds, strong productivity savings and favorable currency impacts, partially offset by business exits and the China social mediadisruption, 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 percentversus 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 prioryear. 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 privatelabel diaper business in the US. Organic sales growth was broadly in line with the prior year, including an approximately 50 basis point negative impactfrom 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 marginwas 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 byplanned investments to drive new product trial and improve price:value tiers across the portfolio, as well as supply chain related investments.
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Second quarter operating profit was $633 million compared to $592 million in the prior year. Current quarter results included $54 million of chargesrelated to the 2024 Transformation Initiative, $109 million related to the Kenvue acquisition and a $39 million benefit related to Brazil business taxcredits. Prior year results included $121 million of charges related to the 2024 Transformation Initiative. Excluding these items, adjusted operatingprofit was $757 million compared to $713 million, an increase of 6.2 percent, driven by the increase in adjusted gross profit discussed above andfavorable currency impacts. These gains were partially offset by an approximate 210 basis point headwind from a combination of business exits and theChina 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 21.1percent 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 pricingnet 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 millionand $33 million, respectively, of pre-tax separation costs. Current quarter results also included net tax charges of $107 million related to the impactsfrom 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 yeardue to reporting requirements for discontinued operations. 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 $0.58and $0.30, respectively, for the certain items discussed above that management doesn't believe reflect our underlying and ongoing operations. Excludingthese items, adjusted EPS from continuing operations were $1.80, an increase of 10.4 percent versus the prior year, driven by higher adjusted operatingprofit, 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 incomefrom 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 1.5percent 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 wasdriven 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 80basis points, and $135 million, or approximately 160 basis points, respectively, of charges related to the 2024 Transformation Initiative. Excluding thesecharges, adjusted gross margin was 38.3 percent, up 60 basis points versus the prior year driven by one-time tariff refunds and strong productivitygains, 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, adjustedoperating 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 andfavorable 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 percentcompared 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 pricingnet 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 millionand $33 million, respectively, of pre-tax separation costs. Current year results also included net tax charges of $107 million related to the impacts fromcertain reorganization activities associated with the IFP Transaction. Excluding these amounts, adjusted income from discontinued operations was $232million 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 toreporting requirements for discontinued operations. 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 areinclusive of net charges of $0.49 and $0.53, respectively, for the certain items discussed above that management doesn't believe reflect our underlyingand ongoing operations. Excluding these items, adjusted EPS from continuing operations were $3.40, an increase of 4.6 percent, driven by higheradjusted operating profit, lower net interest expense and higher income from equity companies, partially offset by a higher adjusted effective tax rate.
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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 adjustedoperating profit and income from discontinued operations, partially offset by a higher adjusted effective tax rate. Business Segment Results(Unaudited) Q2 change vs year ago (%)VolumeMix/OtherNet Price DivestituresandBusinessExits CurrencyTranslationTotalOrganicConsolidated (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 (%)VolumeMix/OtherNet Price DivestituresandBusinessExits CurrencyTranslationTotalOrganicConsolidated 1.3 0.4 (0.5) (1.1) 1.5 1.6 1.2NA 0.8 — (0.3) (1.6) 0.2 (0.9) 0.5IPC 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" belowfor 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 businessesand 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 businessin the US. Organic sales decreased 0.7 percent primarily driven by an approximate 180 basis point headwind from a combination of changes in retailinventories and impacts from the Los Angeles Distribution Center fire. Year-to-date organic sales increased 0.5 percent, as volume growth of 0.8percent, led by gains in Consumer Tissue and Professional categories, was partially offset by price-related investments to drive consumer trial of newproducts. Operating profit of $725 million increased 10.7 percent in the quarter driven by one-time tariff refunds and strong productivity savings that more thanoffset a 110 basis point headwind from business exits and increased brand investments. Year-to-date operating profit was up 1.1 percent as costfavorability and strong productivity savings were partially offset by a 310 basis point headwind from business exits, as well as increased brandinvestments. 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 1.0percent. Organic sales benefitted from strong volume-plus-mix led growth of 1.2 percent, reflecting improvements in consumer value propositionsacross the portfolio that more than offset a 140 basis point headwind from the China social media disruption. Personal Care categories gained weightedshare in the quarter with strong gains in Diapers and Pants. Year-to-date organic sales increased 2.5 percent led by volume growth and improvedportfolio 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 morethan offset a 440 basis point headwind from the China social media disruption. Year-to-date operating profit was up 12.5 percent driven by strongproductivity 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 throughdividends. 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 thecategories and countries it competes, currently 2% on a trailing twelve-month basis. This primarily reflects realized and potential unfavorable impactsamounting to approximately 100 basis points at a total company level from the China social media disruptions. Adjusted Operating Profit is now (c) (a) (b) (c) (a) (b)
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expected to grow mid-single digits on a constant-currency basis. Adjusted Earnings Per Share from Continuing Operations are expected to grow highsingle digits on a constant-currency basis including an approximately 30 percent increase in income from equity companies versus 2025. AdjustedEarnings 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-Clarkwebsite. 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. Thesupplemental materials and Kimberly-Clark's Q&A session can be accessed at the Investor Relations section of the Kimberly-Clark website. A replay ofthe webcast will be available following the event through the same website. 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. Ourportfolio of brands, including Huggies, Kleenex, Scott, Kotex, Cottonelle, Poise, Depend, Pull-Ups, Goodnites, Intimus, Plenitud, Sweety, Softex, Vivaand 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. Weare committed to using sustainable practices designed to support a healthy planet, build strong communities, and enable our business to thrive fordecades 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 theyare filed with the SEC. To view these filings, visit the Investors section of the company's website. Forward Looking Statements Certain matters contained in this press release concerning our plans and expectations regarding the pending mergers with Kenvue and the InternationalFamily Care and Professional ("IFP") joint venture transaction with Suzano ("IFP Transaction"), the business outlook, including raw material, energyand other input costs, the anticipated charges and savings from the 2024 Transformation Initiative, cash flow and uses of cash, growth initiatives,innovations, marketing and other spending, net sales, anticipated currency rates and exchange risks, including the impact in Argentina and Türkiye,effective tax rate, contingencies and anticipated transactions of Kimberly-Clark, including dividends, share repurchases and pension contributions,constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are based upon management'sexpectations and beliefs concerning future events impacting Kimberly-Clark. There can be no assurance that these future events will occur asanticipated or that our results will be as estimated. Forward-looking statements speak only as of the date they were made, and we undertake noobligation to publicly update them. The assumptions used as a basis for the forward-looking statements include many estimates that, among other things, depend on the successfulcompletion of the mergers with Kenvue and the achievement of future cost savings and projected volume increases. In addition, many factors outsideour control, including risks and uncertainties around the pending mergers with Kenvue (including the risk that the anticipated benefits and synergies ofthe mergers may not be realized when expected or at all, the terms and scope of the expected financing in connection with the mergers may prove to beless favorable than currently expected, that the mergers may not be completed in a timely manner or at all and the risk of litigation related to themergers), the IFP Transaction (including risks related to the incurrence of significant transaction and separation costs, adverse market reactions,regulatory or legal challenges, and operational disruptions), risks that we are not able to realize the anticipated benefits of the 2024 TransformationInitiative (including risks related to disruptions to our business or operations or related to any delays in implementation), war in Ukraine (including therelated responses of consumers, customers, and suppliers and sanctions issued by the U.S., the European Union, Russia or other countries), governmenttrade or similar regulatory actions (including current and potential trade and tariff actions affecting the countries where we operate and the resultingnegative impacts on our supply chain, commodity costs, and consumer spending), pandemics, epidemics, fluctuations in foreign currency exchangerates, the prices and availability of our raw materials, supply chain disruptions, disruptions in the capital and credit markets, counterparty defaults(including customers, suppliers and financial institutions with which we do business), failure to realize the expected benefits or synergies from ouracquisition and disposition activity, impairment of goodwill and intangible assets and our projections of operating results and other factors that mayaffect our impairment testing, changes in customer preferences, severe weather conditions, regional instabilities and hostilities (including the war inIran), potential competitive pressures on selling prices for our products, energy costs, general economic and political conditions globally and in themarkets in which we do business, as well as our ability to maintain key customer relationships, could affect the realization of these estimates. The factors described under Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, or in our other SECfilings, among others, could cause our future results to differ from those expressed in any forward-looking statements made by us or on our behalf.Other factors not presently known to us or that we presently consider immaterial could also affect our business operations and financial results.
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KIMBERLY-CLARK CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF INCOME(Millions, except per share amounts)(Unaudited) Three Months EndedJune 302026 2025 ChangeNet Sales $ 4,189$ 4,1630.6 %Cost of products sold 2,586 2,707 (4.5 %)Gross Profit 1,603 1,456 10.1 %Marketing, research and general expenses1,004 863 16.3 %Other (income) and expense, net (34) 1 N.M.Operating Profit 633 592 6.9 %Nonoperating expense (12) (17) (29.4 %)Interest income 4 5 (20.0 %)Interest expense (53) (67) (20.9 %)Income from Continuing Operations Before Income Taxes andEquity Interests 572 513 11.5 %Provision for income taxes (217) (116) 87.1 %Income from Continuing Operations Before Equity Interests 355 397 (10.6 %)Share of net income of equity companies 55 47 17.0 %Income from Continuing Operations 410 444 (7.7 %)Income (Loss) from Discontinued Operations, Net of IncomeTaxes (60) 68 (188.2 %)Net Income 350 512 (31.6 %)Net income attributable to noncontrolling interests(5) (3) 66.7 %Net Income Attributable to Kimberly-Clark Corporation$ 345$ 509(32.2 %) Per Share BasisNet Income Attributable to Kimberly-Clark CorporationBasic:Continuing operations $ 1.22$ 1.33(8.3 %)Discontinued operations (0.18) 0.20 (190.0 %)Basic Earnings per Share $ 1.04$ 1.53(32.0 %) Diluted:Continuing operations $ 1.22$ 1.33(8.3 %)Discontinued operations (0.18) 0.20 (190.0 %)Diluted Earnings per Share $ 1.04$ 1.53(32.0 %) Cash Dividends Declared $ 1.28$ 1.261.6 % Common Shares Outstanding June 302026 2025Outstanding shares as of 332.6 331.9Average diluted shares for three months ended333.3 333.3 N.M. - Not Meaningful KIMBERLY-CLARK CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF INCOME(Millions, except per share amounts)(Unaudited) Six Months EndedJune 302026 2025 ChangeNet Sales $ 8,352$ 8,2171.6 %Cost of products sold 5,215 5,252 (0.7 %)Gross Profit 3,137 2,965 5.8 %Marketing, research and general expenses1,924 1,718 12.0 %Other (income) and expense, net (173) 24 N.M.Operating Profit 1,386 1,223 13.3 %Nonoperating expense (27) (34)(20.6 %)Interest income 9 12 (25.0 %)Interest expense (111) (131)(15.3 %)Income from Continuing Operations Before Income Taxes andEquity Interests 1,257 1,070 17.5 %Provision for income taxes (381) (247) 54.3 %Income from Continuing Operations Before Equity Interests 876 823 6.4 %Share of net income of equity companies 108 91 18.7 %Income from Continuing Operations 984 914 7.7 %Income (Loss) from Discontinued Operations, Net of IncomeTaxes 41 171 (76.0 %)Net Income 1,025 1,085 (5.5 %)Net income attributable to noncontrolling interests(15) (9) 66.7 %
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Net Income Attributable to Kimberly-Clark Corporation$ 1,010$ 1,076(6.1 %) Per Share BasisNet Income Attributable to Kimberly-Clark CorporationBasic:Continuing operations $ 2.92$ 2.737.0 %Discontinued operations 0.12 0.51 (76.5 %)Basic Earnings per Share $ 3.04$ 3.24(6.2 %) Diluted:Continuing operations $ 2.91$ 2.727.0 %Discontinued operations 0.12 0.51 (76.5 %)Diluted Earnings per Share $ 3.03$ 3.23(6.2 %) Cash Dividends Declared $ 2.56$ 2.521.6 % Common Shares Outstanding June 302026 2025Average diluted shares for six months ended333.3 333.3 N.M. - Not Meaningful KIMBERLY-CLARK CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(Millions)(Unaudited) June 30, 2026December 31, 2025ASSETSCurrent AssetsCash and cash equivalents $ 956$ 688Accounts receivable, net 1,858 1,892Inventories 1,539 1,475Other current assets 636 535Current assets of discontinued operations1,365 720Total Current Assets 6,354 5,310Property, Plant and Equipment, Net 6,948 6,775Investments in Equity Companies 381 330Goodwill 1,831 1,839Other Intangible Assets, Net 73 77Other Assets 1,036 1,062Non-current Assets of Discontinued Operations1,931 1,705TOTAL ASSETS $ 18,554$ 17,098 LIABILITIES AND STOCKHOLDERS' EQUITYCurrent LiabilitiesDebt payable within one year $ 43$ 694Trade accounts payable 3,372 3,388Accrued expenses and other current liabilities2,269 1,888Dividends payable 423 415Current liabilities of discontinued operations881 740Total Current Liabilities 6,988 7,125Long-Term Debt 6,474 6,474Non-current Employee Benefits 561 605Deferred Income Taxes 473 445Other Liabilities 622 646Non-current Liabilities of Discontinued Operations1,540 151Redeemable Preferred Securities of Subsidiaries 22 22Stockholders' EquityKimberly-Clark Corporation 1,750 1,502Noncontrolling Interests 124 128Total Stockholders' Equity 1,874 1,630TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$ 18,554$ 17,098 KIMBERLY-CLARK CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Millions)(Unaudited) Six Months Ended June 302026 2025Operating ActivitiesNet income $ 1,025$ 1,085Depreciation and amortization 360 440Stock-based compensation 64 73Deferred income taxes (83) (30)
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Net (gains) losses on asset and business dispositions(7) 36Equity companies' earnings (in excess of) less than dividends paid(65) (50)Operating working capital 399 (471)Postretirement benefits (2) 9Other (38) 5Cash Provided by Operations 1,653 1,097Investing ActivitiesCapital spending (776) (401)Proceeds from asset and business dispositions 28 12Investments in time deposits (166) (227)Maturities of time deposits 132 282Other 17 22Cash Used for Investing (765) (312)Financing ActivitiesCash dividends paid (843) (824)Change in short-term debt (252) 51Debt proceeds 1,329 —Debt repayments (400) (250)Proceeds from exercise of stock options — 36Repurchases of common stock — (120)Cash dividends paid to noncontrolling interests (15) (18)Other (41) (58)Cash Used for Financing (222) (1,183)Effect of Exchange Rate Changes on Cash and Cash Equivalents(4) 34Change in Cash and Cash Equivalents 662 (364) Cash and cash equivalents from continuing operations - beginning of period688 1,010Cash and cash equivalents from discontinued operations - beginning of period13 11Cash and Cash Equivalents - Beginning of Period701 1,021 Cash and cash equivalents from continuing operations - end of period956 634Cash and cash equivalents from discontinued operations - end of period407 23Cash and Cash Equivalents - End of Period$ 1,363$ 657 (a) Included in Current assets of discontinued operations. KIMBERLY-CLARK CORPORATIONBUSINESS SEGMENT RESULTS(Millions)(Unaudited) Three Months EndedJune 30 Six Months EndedJune 302026 2025 Change2026 2025 ChangeNet SalesNA $ 2,698$ 2,730(1.2 %)$ 5,349$ 5,398(0.9 %)IPC 1,491 1,433 4.0 % 3,003 2,819 6.5 %Total Net Sales $ 4,189$ 4,1630.6 %$ 8,352$ 8,2171.6 % Operating ProfitNA $ 725$ 65510.7 %$ 1,348$ 1,3331.1 %IPC 186 182 2.2 % 431 383 12.5 %Segment Operating Profit 911 837 8.8 % 1,779 1,716 3.7 %Corporate & Other (278) (245)13.5 % (393) (493)(20.3 %)Total Operating Profit $ 633$ 5926.9 %$ 1,386$ 1,22313.3 % (a)Segment Operating Profit is a non-GAAP financial measure as it excludes certain results included withinCorporate & Other, as discussed below. Refer to "Summary of Non-GAAP Financial Measures" belowfor further discussion of how we utilize non-GAAP financial measures. As shown above, we haveincluded a reconciliation to Total Operating Profit, as determined in accordance with GAAP.(b)Corporate & Other includes income and expense not associated with the ongoing operations of thesegments, including certain operations of the former IFP segment that were divested prior to theIFP Transaction and costs previously allocated to the former IFP segment that aren't reported asdiscontinued operations. SUMMARY OF NON-GAAP FINANCIAL MEASURES The following provides the reconciliation of the non-GAAP financial measures provided in this press release to the most closely related GAAPmeasure. These measures include: Organic Sales Growth, Adjusted Gross Profit, Adjusted Operating Profit, Adjusted Earnings per Share fromContinuing Operations, Adjusted Earnings per Share Attributable to Kimberly-Clark, Adjusted Effective Tax Rate, and Adjusted Income fromDiscontinued Operations. Unless specifically stated, all discussions regarding non-GAAP financial measures reflect results from our continuingoperations for all periods presented. (a) (a) (a) (b)
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Organic Sales Growth is defined as the change in Net Sales, as determined in accordance with U.S. GAAP, excluding the impacts of currencytranslation and divestitures and business exits.Adjusted Gross and Operating Profit, Adjusted Earnings per Share from Continuing Operations, Adjusted Earnings per Share Attributable toKimberly-Clark, Adjusted Effective Tax Rate, and Adjusted Income from Discontinued Operations are defined as Gross Profit, Operating Profit,Diluted Earnings per Share from Continuing Operations, Diluted Earnings per Share Attributable to Kimberly-Clark, Effective Tax Rate, andIncome from Discontinued Operations, Net of Income Taxes, respectively, as determined in accordance with U.S. GAAP, excluding the impactsof certain items that management believes do not reflect our underlying operations, and which are discussed in further detail below. The income tax effect of these non-GAAP items on the Company's Adjusted Earnings per Share from Continuing Operations, Adjusted Earnings perShare Attributable to Kimberly-Clark and Adjusted Income from Discontinued Operations is calculated based upon the tax laws and statutory incometax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. The impact of these non-GAAP items on the Company's effectivetax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on pre-tax income and provision forincome taxes. We use these non-GAAP financial measures to assist in comparing our performance on a consistent basis for purposes of business decision making byremoving the impact of certain items that we do not believe reflect our underlying and ongoing operations. We believe that presenting these non-GAAPfinancial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance byexcluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategicdecisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating ourresults. We believe that the presentation of these non-GAAP financial measures, when considered together with the corresponding U.S. GAAP financialmeasures and the reconciliation to those measures, provides investors with additional understanding of the factors and trends affecting our business thancould be obtained absent these disclosures. These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP measures, and they shouldbe read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. There are limitations to these non-GAAPfinancial measures because they are not prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companiesdue to potential differences in methods of calculation and items being excluded. We compensate for these limitations by using these non-GAAPfinancial measures as a supplement to the GAAP measures and by providing reconciliations of the non-GAAP and comparable GAAP financialmeasures. Certain non-GAAP financial measures referenced in this press release are presented on a forward-looking basis. Kimberly-Clark does notprovide a reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures on aforward-looking basis because it is unable to predict certain adjustment items without unreasonable effort. Please note that these items could be materialto Kimberly-Clark's results calculated in accordance with GAAP. The non-GAAP financial measures exclude the following items for the relevant time periods: 2024 Transformation Initiative - We initiated this transformation to create a more agile and focused operating structure that will accelerate ourproprietary pipeline of innovation in right-to-win spaces and improve our growth trajectory, profitability, and returns on investment.Kenvue Acquisition - Acquisition-related costs incurred in connection with the pending Kenvue Acquisition, primarily related to externaladvisory, legal, accounting, and other related costs.Brazil Business Tax Credits - Favorable legal ruling resolving certain matters related to prior years' business taxes in Brazil.Insurance Recovery – Settlement of insurance claims related to a previous acquisition.IFP Repatriated Earnings – In connection with the IFP Transaction, we recognized deferred tax liabilities for certain permanently reinvestedearnings from the IFP Business that are expected to be repatriated.IFP Separation Costs - Costs incurred in connection with the IFP Transaction related to external advisory, legal, accounting, contractor and otherincremental costs, and are reported in discontinued operations.IFP Reorganization Tax Charges - Net tax charges primarily related to the U.S. federal tax impacts from an intercompany intellectual propertytransaction and reorganization activities completed in connection with the IFP Transaction.IFP Tax Basis Adjustment - In connection with the IFP Transaction, we recognized a deferred tax liability on the difference between our book andtax basis for certain of our investments in subsidiaries reported as discontinued operations. The following tables provide a reconciliation of Organic Sales Growth from continuing operations: Three Months Ended June 30, 2026Percent change vs. the prior year periodNA IPC TotalNet Sales Growth (1.2) 4.0 0.6Currency Translation (0.1) (3.1) (1.1)Divestitures and Business Exits0.5 0.1 0.4Organic Sales Growth (0.7) 1.0 (0.1) Six Months Ended June 30, 2026Percent change vs. the prior year periodNA IPC Total (a)
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Net Sales Growth (0.9) 6.5 1.6Currency Translation (0.2) (4.1) (1.5)Divestitures and Business Exits1.6 — 1.1Organic Sales Growth 0.5 2.5 1.2 (a) Table may not foot due to rounding. The following table provides a reconciliation of Adjusted Gross Profit from continuing operations: Three Months EndedJune 30 Six Months EndedJune 302026 2025 2026 2025Gross Profit $ 1,603$ 1,456$ 3,137$ 2,9652024 Transformation Initiative22 82 64 135Adjusted Gross Profit $ 1,625$ 1,538$ 3,201$ 3,100 The following table provides a reconciliation of Adjusted Operating Profit from continuing operations: Three Months EndedJune 30 Six Months EndedJune 302026 2025 2026 2025Operating Profit $ 633$ 592$ 1,386$ 1,2232024 Transformation Initiative54 121 105 196Kenvue Acquisition 109 — 157 —Brazil Business Tax Credits (39) — (39) —Insurance Recovery — — (120) —Adjusted Operating Profit $ 757$ 713$ 1,489$ 1,419 The following table provides a reconciliation of Adjusted Earnings per Share from Continuing Operations: Three Months EndedJune 30 Six Months EndedJune 302026 2025 2026 2025Diluted Earnings per Share from ContinuingOperations $ 1.22$ 1.33$ 2.91$ 2.722024 Transformation Initiative 0.12 0.27 0.22 0.50Kenvue Acquisition 0.30 — 0.43 —Brazil Business Tax Credits (0.10) — (0.10) —Insurance Recovery — — (0.32) —IFP Repatriated Earnings 0.26 0.03 0.26 0.03Adjusted Earnings per Share fromContinuing Operations $ 1.80$ 1.63$ 3.40$ 3.25 (a) The non-GAAP adjustments included above are presented net of tax. The income tax effect of these non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable inthe tax jurisdiction(s) of the underlying non-GAAP adjustment. Refer to the Adjusted Effective TaxRate reconciliation below for the tax effect of these adjustments on the Company's reportedprovision for income taxes. The following table provides a reconciliation of Adjusted Earnings per Share Attributable to Kimberly-Clark: Three Months EndedJune 30 Six Months EndedJune 302026 2025 2026 2025Diluted Earnings per Share Attributable toKimberly-Clark $ 1.04$ 1.53$ 3.03$ 3.232024 Transformation Initiative 0.12 0.27 0.22 0.50Kenvue Acquisition 0.30 — 0.43 —Brazil Business Tax Credits (0.10) — (0.10) —Insurance Recovery — — (0.32) —IFP Separation Costs 0.18 0.07 0.25 0.07IFP Repatriated Earnings 0.26 0.03 0.26 0.03IFP Reorganization Tax Charges 0.32 — 0.32 —IFP Tax Basis Adjustment — 0.02 — 0.02Adjusted Earnings per Share Attributable toKimberly-Clark $ 2.12$ 1.92$ 4.09$ 3.85 (a) (a)
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The following tables provide a reconciliation of the continuing operations Adjusted Effective Tax Rate: Three Months Ended June 302026 2025Income fromContinuingOperationsBefore IncomeTaxes andEquityInterests Provision forIncome Taxes Income fromContinuingOperationsBefore IncomeTaxes andEquityInterests Provision forIncome TaxesAs Reported $ 572$ (217)$ 513$ (116)2024 Transformation Initiative54 (14) 122 (27)Kenvue Acquisition 109 (10) — —Brazil Business Tax Credits (39) 7 — —IFP Repatriated Earnings — 87 — 10As Adjusted $ 696$ (147)$ 635$ (133) Effective Tax RateAs Reported 37.9 % 22.6 %As Adjusted 21.1 % 20.9 % Six Months Ended June 302026 2025Income fromContinuingOperationsBefore IncomeTaxes andEquityInterests Provision forIncome Taxes Income fromContinuingOperationsBefore IncomeTaxes andEquityInterests Provision forIncome TaxesAs Reported $ 1,257$ (381)$ 1,070$ (247)2024 Transformation Initiative105 (33) 199 (27)Kenvue Acquisition 157 (15) — —Brazil Business Tax Credits (39) 7 — —Insurance Recovery (120) 14 — —IFP Repatriated Earnings — 87 — 10As Adjusted $ 1,360$ (321)$ 1,269$ (264) Effective Tax RateAs Reported 30.3 % 23.1 %As Adjusted 23.6 % 20.8 % The following table provides a reconciliation of Adjusted Income from Discontinued Operations: Three Months EndedJune 30 Six Months EndedJune 302026 2025 2026 2025Income (Loss) from DiscontinuedOperations, Net of Income Taxes $ (60)$ 68$ 41$ 171IFP Separation Costs 72 33 104 33Tax Effect on IFP Separation Costs(12) (8) (20) (8)IFP Reorganization Tax Charges 107 — 107 —IFP Tax Basis Adjustment — 6 — 6Adjusted Income from DiscontinuedOperations $ 107$ 99$ 232$ 202 (a) The income tax effect of this non-GAAP item is calculated based upon the tax laws andstatutory income tax rates applicable in the tax jurisdiction(s) of the non-GAAP adjustment. (a)