Kimberly-Clark Adjusted Earnings Rise as Margins Recover
The consumer goods company reported adjusted earnings per share of $2.12 for the second quarter.
Kimberly-Clark (KMB) reported a 10.4% year-over-year increase in adjusted earnings per share to $2.12 for the second quarter. The result marked a significant acceleration from the 2.1% increase reported in the first quarter.
While profitability improved, top-line growth slowed. Net sales for the quarter were $4.2 billion, up 0.6% year-over-year. This represented a deceleration from the first quarter, where net sales were also $4.2 billion but had grown 2.7% year-over-year. Organic sales growth slowed to levels broadly in line with the prior year, down from 2.5% organic growth in the first quarter.
Profitability gains were driven by a recovery in margins. Adjusted gross margin expanded to 38.8%, an increase of 190 basis points year-over-year. This reversed a 60 basis point decline seen in the first quarter. Adjusted operating profit grew 6.2% year-over-year to $757 million, accelerating from the 3.7% growth reported in the previous quarter.
Regional performance was impacted by operational and social disruptions. North America organic sales decreased 0.7% due to a distribution center fire and a 180 basis point headwind from retail inventories. International Personal Care organic sales grew 1.0%, despite a 140 basis point headwind caused by a social media disruption in China regarding diaper quality.
Kimberly-Clark updated its 2026 outlook due to the disruptions in China. The company now expects organic sales growth to be approximately 100 basis points below the weighted average category growth of 2%. It also updated its 2026 outlook for adjusted earnings per share, now expecting a low single-digit decline on a constant-currency basis.
The company announced the launch of a strategic joint venture with Suzano called Arbex and the construction of an alternative natural fibers pilot plant in the Southwest U.S.. Total debt from continuing operations decreased to $6.5 billion as of June 30, 2026, from $7.2 billion as of December 31, 2025.