Kimberly-Clark Keeps 2026 Outlook After China Diaper Hit
Organic sales growth is still expected about 100 basis points below 1.7 percent trailing category growth, with China social-media disruptions cited as the drag.
Kimberly-Clark Corporation (KMB), a core S&P 500 consumer-products company, said its full-year 2026 outlook remains consistent with previous expectations after preliminary third-quarter results, with organic sales growth still expected to run about 100 basis points below weighted-average category growth.
That gap primarily reflects realized and potential unfavorable impacts of about 100 basis points at a total-company level from previously disclosed China social-media disruptions. Weighted-average category growth was now approximately 1.7 percent on a trailing 12-month basis.
Adjusted operating profit is still expected to grow mid-single digits on a constant-currency basis, and adjusted earnings per share from continuing operations are expected to grow high single digits on a constant-currency basis. Adjusted earnings per share attributable to Kimberly-Clark is still expected to see a low single-digit decline on a constant-currency basis. The outlook excludes any potential acquisitions, including the previously announced pending acquisition of Kenvue Inc., as well as divestitures and other items not yet identified and quantified.
The China episode first showed up in the second quarter. Net sales were $4.2 billion, up 0.6 percent, with organic sales growth broadly in line with the prior year after an approximately 50 basis point negative impact from the social-media disruption. That compared with first-quarter net sales of $4.2 billion, up 2.7 percent, and organic sales growth of 2.5 percent.
False allegations about the quality of certain diaper brands in China significantly impacted diaper sales in the second quarter and were expected to further impact sales and profits in the near term. Independent testing by a government-certified third party confirmed product quality and safety.
Profitability still moved higher in the second quarter. Adjusted operating profit was $757 million, up 6.2 percent versus the prior year, after $732 million in the first quarter, up 3.7 percent. Adjusted EPS from continuing operations was $1.80, up 10.4 percent versus the prior year, after $1.60 in the first quarter, down 1.2 percent. Adjusted EPS attributable to Kimberly-Clark was $2.12, up 10.4 percent versus the prior year, after $1.97 in the first quarter, up 2.1 percent.
Gross margin was 38.3 percent in the second quarter, versus 36.8 percent in the first quarter. Adjusted gross margin was 38.8 percent, versus 37.9 percent. The second-quarter adjusted operating-profit increase was attributed to 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.
In the first quarter, organic sales growth of 2.5 percent was driven by volume-plus-mix growth of 3.0 percent, partially offset by lower pricing of 0.5 percent. Reported net sales of $4.2 billion included favorable currency impacts of 2.0 percent, partially offset by a 1.8 percent decline from the exit of the company’s private-label diaper business in the U.S.
Kimberly-Clark will issue final third-quarter and nine-month results on November 5, 2026. Management will host a live Q&A with analysts beginning at 8:00 a.m. EST. The 2026 outlook reflects assumptions subject to change given the macro environment.