Kimberly-Clark (NYSE: KMB) Q1 2026 profit jumps 22% amid major deals
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
Kimberly-Clark reported higher Q1 2026 profit while reshaping its portfolio. Net sales from continuing operations rose 2.7% to $4.16 billion, driven mainly by 2.6% volume growth. Income from continuing operations increased to $574 million from $470 million, and diluted EPS from continuing operations rose to $1.70 from $1.39.
Discontinued operations, reflecting the International Family Care and Professional business being sold into a joint venture with Suzano, contributed $101 million of income. Kimberly-Clark expects Suzano to buy 51% of this joint venture for about $1.7 billion in mid‑2026, with the company retaining 49%.
The company is also progressing on its pending acquisition of Kenvue, expecting to issue roughly 280 million shares and pay about $6.7 billion in cash. Its 2024 Transformation Initiative has generated cumulative pre‑tax charges of $859 million, with Q1 2026 charges of $51 million, but is targeted to deliver $3.0 billion in gross productivity savings. Operating cash flow strengthened to $745 million, up from $327 million, helped by an insurance recovery and better working capital.
Positive
- None.
Negative
- None.
Insights
Q1 profit and cash flow improved as Kimberly-Clark advances a large acquisition, a major divestiture and a multi‑year cost program.
Kimberly-Clark grew continuing net sales 2.7% to $4.16 billion, with 2.6% volume growth offsetting modest price pressure and business exits. Adjusted operating profit rose 3.7% to $732 million, helped by roughly $115 million of productivity savings and lower marketing and overhead spending.
Headline earnings benefited from a $120 million insurance recovery and were weighed by $51 million of transformation charges and $48 million of Kenvue deal costs. The adjusted effective tax rate increased to 26.2% from 20.7%, so adjusted EPS slipped slightly to $1.60 despite higher operating profit.
Strategically, the pending $6.7 billion cash-and-stock acquisition of Kenvue and the planned $1.7 billion sale of 51% of the IFP joint venture with Suzano will substantially reshape the portfolio and capital structure once closed. The 2024 Transformation Initiative, expected to cost $1.5 billion pre‑tax and deliver $3.0 billion in gross productivity plus $200 million in SG&A savings, remains a central driver of future margin performance.
Key Figures
Net sales (continuing ops): $4.163B
Income from continuing operations: $574M
Diluted EPS (continuing ops): $1.70
+5 more
8 metrics
Net sales (continuing ops)
$4.163B
Three months ended March 31, 2026 vs $4.054B in 2025
Income from continuing operations
$574M
Q1 2026 vs $470M in Q1 2025
Diluted EPS (continuing ops)
$1.70
Q1 2026 vs $1.39 in Q1 2025
Adjusted EPS
$1.60
Q1 2026 vs $1.62 in Q1 2025
Operating cash flow
$745M
Three months ended March 31, 2026 vs $327M in 2025
Kenvue cash consideration
$6.7B
Expected cash portion of Kenvue acquisition
IFP JV sale price
$1.7B
Expected proceeds for 51% interest sold to Suzano
Transformation cumulative charges
$859M
Cumulative pre-tax charges through March 31, 2026
Key Terms
2024 Transformation Initiative, discontinued operations, cash flow hedges, net investment hedges, +2 more
6 terms
2024 Transformation Initiative financial
"The 2024 Transformation Initiative is expected to be completed by the end of 2026, with total costs anticipated to be approximately $1.5 billion pre-tax."
discontinued operations financial
"Accordingly, the results of the IFP Business are reported as discontinued operations in the accompanying Condensed Consolidated Statements of Income."
Discontinued operations are parts of a company that it has decided to sell or shut down, and no longer plans to run in the future. This matters to investors because it helps them understand which parts of the business are ongoing and which are being phased out, providing a clearer picture of the company’s current performance and future prospects. Think of it like a store closing a department—it no longer contributes to sales or profits.
cash flow hedges financial
"Derivative instruments used to manage these exposures are designated as cash flow hedges."
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
net investment hedges financial
"A portion of our balance sheet translation exposure for certain affiliates is hedged with cross-currency swap contracts and certain foreign denominated debt which are designated as net investment hedges."
A net investment hedge is a financial step a company takes to protect the reported value of its ownership in foreign subsidiaries from swings in exchange rates. By using derivatives or foreign‑currency borrowings to offset translation gains or losses, the company reduces how much its balance sheet and reported equity jump around when currencies move — like locking a price tag on a foreign store so its value in the home currency stays steadier for investors.
supplier finance program financial
"We have a supplier finance program managed through two global financial institutions under which we agree to pay the financial institutions the stated amount of confirmed invoices."
Organic Sales Growth financial
"Organic Sales Growth is a non-GAAP financial measure."
Organic sales growth measures how much a company’s revenue rises from its regular business activity — like selling more products, charging higher prices, or selling to more customers — without counting money from buying other businesses or one-time currency effects. Investors watch it because it shows whether demand and the company’s core operations are genuinely getting stronger, similar to judging a garden by how much the plants you planted yourself are growing rather than by adding bought potted plants.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended March 31, 2026
OR
For the transition period from ________ to ________
Commission file number 1-225
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices)
(Zip code)
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
x | Smaller reporting company | |||||||||||||
| Accelerated filer | ☐ | Emerging growth company | ||||||||||||
| Non-accelerated filer | ☐ | |||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of April 21, 2026, there were 331,940,357 shares of the Corporation's common stock outstanding.
Table of Contents
PART I – FINANCIAL INFORMATION | 1 | ||||
Item 1. Financial Statements | 1 | ||||
Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2026 and 2025 | 1 | ||||
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2026 and 2025 | 2 | ||||
Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 | 3 | ||||
Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2026 and 2025 | 4 | ||||
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 | 5 | ||||
Notes to the Unaudited Interim Condensed Consolidated Financial Statements | 6 | ||||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 18 | ||||
Item 4. Controls and Procedures | 27 | ||||
PART II – OTHER INFORMATION | 28 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 28 | ||||
Item 5. Other Information | 28 | ||||
Item 6. Exhibits | 29 | ||||
Signatures | 30 | ||||
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended March 31 | ||||||||||||||
| (In millions, except per share amounts) | 2026 | 2025 | ||||||||||||
| Net Sales | $ | $ | ||||||||||||
| Cost of products sold | ||||||||||||||
| Gross Profit | ||||||||||||||
| Marketing, research and general expenses | ||||||||||||||
| Other (income) and expense, net | ( | |||||||||||||
| Operating Profit | ||||||||||||||
| Nonoperating expense | ( | ( | ||||||||||||
| Interest income | ||||||||||||||
| Interest expense | ( | ( | ||||||||||||
| Income from Continuing Operations Before Income Taxes and Equity Interests | ||||||||||||||
| Provision for income taxes | ( | ( | ||||||||||||
| Income from Continuing Operations Before Equity Interests | ||||||||||||||
| Share of net income of equity companies | ||||||||||||||
| Income from Continuing Operations | ||||||||||||||
| Income from Discontinued Operations, Net of Income Taxes | ||||||||||||||
| Net Income | ||||||||||||||
| Net income attributable to noncontrolling interests | ( | ( | ||||||||||||
| Net Income Attributable to Kimberly-Clark Corporation | $ | $ | ||||||||||||
| Per Share Basis | ||||||||||||||
| Net Income Attributable to Kimberly-Clark Corporation | ||||||||||||||
| Basic: | ||||||||||||||
| Continuing operations | $ | $ | ||||||||||||
| Discontinued operations | ||||||||||||||
| Basic Earnings per Share | $ | $ | ||||||||||||
| Diluted: | ||||||||||||||
| Continuing operations | $ | $ | ||||||||||||
| Discontinued operations | ||||||||||||||
| Diluted Earnings per Share | $ | $ | ||||||||||||
See Notes to the Unaudited Interim Condensed Consolidated Financial Statements.
1
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended March 31 | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Net Income | $ | $ | ||||||||||||
| Other Comprehensive Income (Loss), Net of Tax | ||||||||||||||
| Unrealized currency translation adjustments | ( | |||||||||||||
| Employee postretirement benefits | ( | |||||||||||||
| Cash flow hedges | ( | |||||||||||||
| Total Other Comprehensive Income (Loss), Net of Tax | ||||||||||||||
| Comprehensive Income | ||||||||||||||
| Comprehensive income attributable to noncontrolling interests | ( | ( | ||||||||||||
| Comprehensive Income Attributable to Kimberly-Clark Corporation | $ | $ | ||||||||||||
See Notes to the Unaudited Interim Condensed Consolidated Financial Statements.
2
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (In millions, except par value) | March 31, 2026 | December 31, 2025 | ||||||||||||
| ASSETS | ||||||||||||||
| Current Assets | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Accounts receivable, net | ||||||||||||||
| Inventories | ||||||||||||||
| Other current assets | ||||||||||||||
| Current assets of discontinued operations | ||||||||||||||
| Total Current Assets | ||||||||||||||
| Property, Plant and Equipment, Net | ||||||||||||||
| Investments in Equity Companies | ||||||||||||||
| Goodwill | ||||||||||||||
| Other Intangible Assets, Net | ||||||||||||||
| Other Assets | ||||||||||||||
| Non-current Assets of Discontinued Operations | ||||||||||||||
| TOTAL ASSETS | $ | $ | ||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
| Current Liabilities | ||||||||||||||
| Debt payable within one year | $ | $ | ||||||||||||
| Trade accounts payable | ||||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||
| Dividends payable | ||||||||||||||
| Current liabilities of discontinued operations | ||||||||||||||
| Total Current Liabilities | ||||||||||||||
| Long-Term Debt | ||||||||||||||
| Non-current Employee Benefits | ||||||||||||||
| Deferred Income Taxes | ||||||||||||||
| Other Liabilities | ||||||||||||||
| Non-current Liabilities of Discontinued Operations | ||||||||||||||
| Redeemable Preferred Securities of Subsidiaries | ||||||||||||||
| Stockholders' Equity | ||||||||||||||
| Kimberly-Clark Corporation | ||||||||||||||
Preferred stock - | ||||||||||||||
Common stock - $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
Common stock held in treasury, at cost - | ( | ( | ||||||||||||
| Retained earnings | ||||||||||||||
| Accumulated other comprehensive income (loss) | ( | ( | ||||||||||||
| Total Kimberly-Clark Corporation Stockholders' Equity | ||||||||||||||
| Noncontrolling Interests | ||||||||||||||
| Total Stockholders' Equity | ||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | ||||||||||||
See Notes to the Unaudited Interim Condensed Consolidated Financial Statements.
3
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
| Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In millions, except per share amounts. Shares in thousands) | Common Stock Issued | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interests | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Net income in stockholders' equity(a) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax(a) | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based awards exercised or vested | — | — | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Recognition of stock-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
(a) Excludes redeemable interests' share.
| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In millions, except per share amounts. Shares in thousands) | Common Stock Issued | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interests | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Net income in stockholders' equity(a) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax(a) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based awards exercised or vested | — | — | ( | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Recognition of stock-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
(a) Excludes redeemable interests' share.
See Notes to the Unaudited Interim Condensed Consolidated Financial Statements.
4
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended March 31 | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Operating Activities | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Depreciation and amortization | ||||||||||||||
| Stock-based compensation | ||||||||||||||
| Deferred income taxes | ||||||||||||||
| Net (gains) losses on asset and business dispositions | ( | |||||||||||||
| Equity companies' earnings (in excess of) less than dividends paid | ( | ( | ||||||||||||
| Operating working capital | ( | ( | ||||||||||||
| Postretirement benefits | ( | |||||||||||||
| Other | ( | |||||||||||||
| Cash Provided by Operations | ||||||||||||||
| Investing Activities | ||||||||||||||
| Capital spending | ( | ( | ||||||||||||
| Proceeds from asset and business dispositions | ||||||||||||||
| Investments in time deposits | ( | ( | ||||||||||||
| Maturities of time deposits | ||||||||||||||
| Other | ( | |||||||||||||
| Cash Used for Investing | ( | ( | ||||||||||||
| Financing Activities | ||||||||||||||
| Cash dividends paid | ( | ( | ||||||||||||
| Change in short-term debt | ||||||||||||||
| Debt repayments | ( | ( | ||||||||||||
| Proceeds from exercise of stock options | ||||||||||||||
| Repurchases of common stock | ( | |||||||||||||
| Cash dividends paid to noncontrolling interests | ( | ( | ||||||||||||
| Other | ( | ( | ||||||||||||
| Cash Used for Financing | ( | ( | ||||||||||||
| Effect of Exchange Rate Changes on Cash and Cash Equivalents | ( | |||||||||||||
| Change in Cash and Cash Equivalents | ( | ( | ||||||||||||
| Cash and cash equivalents from continuing operations - beginning of period | ||||||||||||||
Cash and cash equivalents from discontinued operations - beginning of period(a) | ||||||||||||||
| Cash and Cash Equivalents - Beginning of Period | ||||||||||||||
| Cash and cash equivalents from continuing operations - end of period | ||||||||||||||
Cash and cash equivalents from discontinued operations - end of period(a) | ||||||||||||||
| Cash and Cash Equivalents - End of Period | $ | $ | ||||||||||||
(a) Included in Current assets of discontinued operations.
See Notes to the Unaudited Interim Condensed Consolidated Financial Statements.
5
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Accounting Policies
Basis of Presentation
The accompanying Unaudited Interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all material adjustments which are of a normal and recurring nature necessary for a fair statement of the results for the periods presented have been reflected. Amounts are reported in millions of dollars, except per share amounts, unless otherwise noted.
For further information, refer to the consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2025. The terms "Corporation," "Company," "Kimberly-Clark," "K-C," "we," "our" and "us" refer to Kimberly-Clark Corporation and its consolidated subsidiaries.
International Family Care and Professional ("IFP") Transaction
On June 5, 2025, we announced that the Company will form a joint venture with Suzano S.A. ("Suzano") and Suzano International Holding B.V., a wholly-owned subsidiary of Suzano ("Buyer"), comprised of substantially all the operations of the Company's former International Family Care and Professional ("IFP") segment (the "IFP Business"). To facilitate this transaction, we entered into an Equity and Asset Purchase Agreement (the "Purchase Agreement") with Buyer, pursuant to which we will, among other things, effectuate a reorganization through the transfer of certain assets, liabilities and equity interests of the IFP Business to Kimberly-Clark IFP NewCo B.V., an indirect wholly-owned subsidiary of the Company (the "Joint Venture"). At the time of closing, which is expected to take place in mid-2026 and will only take place following the satisfaction of consultation requirements and customary closing conditions, including obtaining required regulatory approvals, Buyer will acquire a 51 % interest in the Joint Venture for a purchase price of approximately $1.7 billion, subject to certain closing adjustments set forth in the Purchase Agreement, and we will retain a 49 % equity interest (the "IFP Transaction").
In accordance with ASC 205, Presentation of Financial Statements, we determined the IFP Transaction represents a strategic shift that will have a major effect on our operations and financial results. Accordingly, the results of the IFP Business are reported as discontinued operations in the accompanying Condensed Consolidated Statements of Income and have been excluded from both continuing operations and segment results for all periods presented. Further, the assets and liabilities of the IFP Business are classified as discontinued operations in the accompanying Condensed Consolidated Balance Sheets for all periods presented, and the Company has ceased depreciating and amortizing the long-lived assets of the IFP Business. The Condensed Consolidated Statements of Comprehensive Income, Stockholders' Equity and Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. Unless otherwise noted, amounts and disclosures in the Notes to the Unaudited Interim Condensed Consolidated Financial Statements reflect only Kimberly-Clark's continuing operations. See Note 3 for additional details.
Highly Inflationary Accounting
GAAP requires the use of highly inflationary accounting for countries whose cumulative three-year inflation exceeds 100%. Under highly inflationary accounting, the countries’ functional currency becomes the U.S. dollar, and its income statement and balance sheet are measured in U.S. dollars using both current and historical rates of exchange.
As of July 1, 2018, we adopted highly inflationary accounting for our subsidiaries in Argentina (“K-C Argentina”). The effect of changes in exchange rates on peso-denominated monetary assets and liabilities has been reflected in earnings in Other (income) and expense, net. As of March 31, 2026, K-C Argentina had an immaterial net peso monetary position. Net sales of K-C Argentina were approximately 1
6
As of April 1, 2022, we adopted highly inflationary accounting for our subsidiary in Türkiye (“K-C Türkiye”). The effect of changes in exchange rates on lira-denominated monetary assets and liabilities has been reflected in earnings in Other (income) and expense, net. As of March 31, 2026, K-C Türkiye had an immaterial net lira monetary position. Net sales of K-C Türkiye were less than 1
Recently Issued Accounting Standards
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220). The new guidance requires disclosure in the notes to the financial statements of disaggregated information about specific expense categories underlying certain income statement expense line items. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments should be applied on a prospective basis with retrospective application permitted. We are currently evaluating the impact of this update on our Consolidated Financial Statements and related disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350) to modernize the accounting guidance for internal-use software costs. The new guidance eliminates software development stages and clarifies when to begin capitalizing eligible software costs. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. The amendments can be applied on a prospective basis, a modified basis for in-process projects or a retrospective basis. We are currently evaluating the impact of this update on our Consolidated Financial Statements and related disclosures.
In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832) to establish guidance on the recognition, measurement and presentation of government grants received by business entities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2028, and interim periods within those fiscal years, with early adoption permitted. The amendments can be applied on a modified prospective basis, a modified retrospective basis or a retrospective basis. We are currently evaluating the impact of this update on our Consolidated Financial Statements and related disclosures.
Note 2. 2024 Transformation Initiative
On March 27, 2024, we announced the 2024 Transformation Initiative intended to improve our focus on growth and reduce our structural cost base by realigning our internal operating and management structure to streamline our global supply chain and improve the efficiency of our corporate and regional overhead cost structures. The transformation is expected to impact our organization in all major geographies, and workforce reductions are expected to be in the range of 4 % to 5 %. Certain actions under the 2024 Transformation Initiative are being finalized for implementation, and accounting for such actions will commence when the actions are authorized for execution.
The 2024 Transformation Initiative is expected to be completed by the end of 2026, with total costs anticipated to be approximately $1.5 billion pre-tax. Cash costs are expected to be approximately 60 % of that amount, primarily related to workforce reductions and other program costs. Expected non-cash charges are primarily related to incremental depreciation and asset write-offs, including losses associated with the expected exit of certain markets. Through March 31, 2026, cumulative pre-tax charges for the 2024 Transformation Initiative were $859 ($666 after-tax).
7
The following charges were incurred in connection with the 2024 Transformation Initiative:
| Three Months Ended March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cost of products sold: | ||||||||||||||
| Charges for workforce reductions | $ | $ | ||||||||||||
| Asset write-offs | ||||||||||||||
| Incremental depreciation | ||||||||||||||
| Other exit costs | ||||||||||||||
| Total | ||||||||||||||
| Marketing, research and general expenses: | ||||||||||||||
| Charges for workforce reductions | ||||||||||||||
| Other exit costs | ||||||||||||||
| Total | ||||||||||||||
Other (income) and expense, net(a) | ( | |||||||||||||
| Nonoperating expense | ||||||||||||||
Total charges(b) | ||||||||||||||
| Provision for income taxes | ( | |||||||||||||
| Net charges | ||||||||||||||
| Net charges related to noncontrolling interests | ( | |||||||||||||
| Net charges attributable to Kimberly-Clark Corporation | $ | $ | ||||||||||||
(a)Other (income) and expense, net includes gains from the sale of manufacturing facilities and associated real estate as part of the 2024 Transformation Initiative.
(b)We do not include 2024 Transformation Initiative charges within our segment operating results. Total impact of these charges to the NA segment would have been $56 for the three months ended March 31, 2026 (IPC segment amount was not material), and $27 and $20 to the NA and IPC segments, respectively, for the three months ended March 31, 2025, with the residual relating to Corporate & Other. See further discussion around our segment operating results in Note 9.
The following summarizes the 2024 Transformation Initiative liabilities activity:
| Total | ||||||||
| Liabilities as of December 31, 2025 | $ | |||||||
| Cash payments | ( | |||||||
| Currency and other | ( | |||||||
| Liabilities as of March 31, 2026 | $ | |||||||
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Note 3. Discontinued Operations
As disclosed in Note 1, on June 5, 2025, we announced the sale of a controlling equity interest in a newly formed Joint Venture comprised of our IFP Business. At the time of closing, Buyer will acquire a 51 % interest in the Joint Venture for a purchase price of approximately $1.7 billion, subject to certain post-closing adjustments set forth in the Purchase Agreement. We will retain a 49 % equity interest in the Joint Venture which we expect will initially be recorded at fair value and subsequently accounted for using the equity method of accounting. The transaction is expected to close in mid-2026, pending the satisfaction of consultation requirements and customary closing conditions, including obtaining required regulatory approvals, set forth in the Purchase Agreement.
Financial Information of Discontinued Operations
The following table presents the components of Income from Discontinued Operations, Net of Income Taxes:
| Three Months Ended March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net Sales | $ | $ | ||||||||||||
| Cost of products sold | ||||||||||||||
| Gross Profit | ||||||||||||||
| Marketing, research and general expenses | ||||||||||||||
| Operating Profit | ||||||||||||||
| Nonoperating expense | ( | |||||||||||||
| Income from discontinued operations before income taxes | ||||||||||||||
| Provision for income taxes | ( | ( | ||||||||||||
| Income from Discontinued Operations, Net of Income Taxes | $ | $ | ||||||||||||
As a result of the IFP Transaction, we incurred separation costs of $32 for the three months ended March 31, 2026, which are included in the reported amounts above. These costs were primarily related to external advisory, legal, accounting, contractor and other incremental costs directly related to the IFP Transaction.
The following table presents significant non-cash items and capital expenditures of discontinued operations:
| Three Months Ended March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Depreciation and Amortization | $ | $ | ||||||||||||
| Capital Spending | ||||||||||||||
9
The following table presents the components of assets and liabilities classified as discontinued operations:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Accounts receivable, net | ||||||||||||||
| Inventories | ||||||||||||||
| Other current assets | ||||||||||||||
| Current Assets of Discontinued Operations | $ | $ | ||||||||||||
| Property, Plant and Equipment, Net | $ | $ | ||||||||||||
| Goodwill | ||||||||||||||
| Other Intangible Assets, Net | ||||||||||||||
| Other Assets | ||||||||||||||
| Non-current Assets of Discontinued Operations | $ | $ | ||||||||||||
| Liabilities | ||||||||||||||
| Debt payable within one year | $ | $ | ||||||||||||
| Trade accounts payable | ||||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||
| Current Liabilities of Discontinued Operations | $ | $ | ||||||||||||
| Long-Term Debt | $ | $ | ||||||||||||
| Non-current Employee Benefits | ||||||||||||||
| Deferred Income Taxes | ||||||||||||||
| Other Liabilities | ||||||||||||||
| Non-current Liabilities of Discontinued Operations | $ | $ | ||||||||||||
Joint Venture Agreement and Ancillary Agreements
10
Note 4. Acquisitions
Pending Acquisition of Kenvue, Inc.
On November 2, 2025, we entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire the outstanding equity interests of Kenvue, Inc. ("Kenvue"), a global consumer health leader, for stock and cash consideration (the "Kenvue Acquisition"). Under the terms of the Merger Agreement, which was unanimously approved by the Boards of Directors of each of Kimberly-Clark and Kenvue, each share of Kenvue common stock, par value $0.01 per share, issued and outstanding at the close of the Kenvue Acquisition (subject to certain provisions within the Merger Agreement) will be converted into the right to receive (i) 0.14625 shares of Kimberly-Clark common stock, par value $1.25 per share (the "Stock Consideration"), plus (ii) $3.50 in cash (the "Cash Consideration" and, together with the Stock Consideration, the "Merger Consideration"). In total, we expect approximately 280 million shares of common stock to be issued and approximately $6.7 billion to be paid for the Merger Consideration. The Cash Consideration is expected to be funded through a combination of cash on hand, proceeds from new debt issuance, and proceeds from the IFP Transaction. The actual value of the transaction will fluctuate based upon changes in the price of Kimberly-Clark common stock and the number of shares of Kenvue common stock outstanding at the time of closing.
On January 29, 2026, Kimberly-Clark and Kenvue each held a special meeting of their respective stockholders. During the respective meetings, Kimberly-Clark stockholders approved by requisite vote the issuance of Kimberly-Clark common stock as consideration to holders of Kenvue common stock, and Kenvue stockholders adopted by the requisite vote the Merger Agreement. Additionally, the waiting period applicable to the Kenvue Acquisition under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired on February 4, 2026. Completion of the Kenvue Acquisition, which is expected to take place in the second half of 2026, remains subject to the satisfaction of other customary closing conditions, as described in the Merger Agreement, including the receipt of foreign regulatory approvals. The Merger Agreement also provides for certain termination rights, and under certain specified circumstances, both Kimberly-Clark and Kenvue may be required to pay the other a termination fee of $1.1 billion.
Note 5. Fair Value Information
The following fair value information is based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels in the hierarchy used to measure fair value are:
Level 1 – Unadjusted quoted prices in active markets accessible at the reporting date for identical assets and liabilities.
Level 2 – Quoted prices for similar assets or liabilities in active markets. Quoted prices for identical or similar assets and liabilities in markets that are not considered active or financial instruments for which all significant inputs are observable, either directly or indirectly.
Level 3 – Prices or valuations that require inputs that are significant to the valuation and are unobservable.
A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
During the three months ended March 31, 2026 and for the full year 2025, there were no significant transfers to or from level 3 fair value determinations.
Derivative assets and liabilities are measured on a recurring basis at fair value. As of March 31, 2026 and December 31, 2025, derivative assets were $135 and $81 , respectively, and derivative liabilities were $175 and $191 , respectively. The fair values of derivatives used to manage interest rate risk and commodity price risk are based on the Secured Overnight Financing Rate ("SOFR") and interest rate swap curves and on commodity price quotations, respectively. The fair values of hedging instruments used to manage foreign currency risk are based on published quotations of spot currency rates and forward points, which are converted into implied forward currency rates. Measurement of our derivative assets and liabilities is considered a level 2 measurement. See Note 8 for additional information on our use of derivative instruments.
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Redeemable preferred securities of subsidiaries are measured on a recurring basis at their estimated redemption values, which approximate fair value. As of March 31, 2026 and December 31, 2025, the securities were valued at $22
Company-owned life insurance ("COLI") assets are measured on a recurring basis at fair value. COLI assets were $69 and $71 as of March 31, 2026 and December 31, 2025, respectively. The COLI policies are a source of funding primarily for our nonqualified employee benefits and are included in Other Assets in the Condensed Consolidated Balance Sheets. The COLI policies are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.
The following table includes the fair value of our financial instruments for which disclosure of fair value is required:
| Fair Value Hierarchy Level | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
Cash and cash equivalents(a) | 1 | $ | $ | $ | $ | |||||||||||||||||||||||||||
Time deposits(b) | 1 | |||||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||
Short-term debt(c) | 2 | |||||||||||||||||||||||||||||||
Long-term debt(d) | 2 | |||||||||||||||||||||||||||||||
(a)Cash equivalents are composed of certificates of deposit, time deposits and other interest-bearing investments with original maturity dates of 90 days or less. Cash equivalents are recorded at cost, which approximates fair value.
(b)Time deposits are composed of deposits with original maturities of more than 90 days but less than one year and instruments with original maturities of greater than one year, included in Other current assets or Other Assets in the Condensed Consolidated Balance Sheets, as appropriate. Time deposits are recorded at cost, which approximates fair value.
(c)Short-term debt is composed of U.S. commercial paper and/or other similar short-term debt issued by non-U.S. subsidiaries, all of which are recorded at cost, which approximates fair value.
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Note 6. Earnings Per Share
Basic and diluted earnings per share ("EPS") were calculated as follows:
| Three Months Ended March 31 | ||||||||||||||
| (In millions, except per share amounts) | 2026 | 2025 | ||||||||||||
| Income from Continuing Operations | $ | $ | ||||||||||||
| Less: Net income attributable to noncontrolling interests | ( | ( | ||||||||||||
| Income from Continuing Operations Attributable to Kimberly-Clark Corporation | ||||||||||||||
| Income from Discontinued Operations, Net of Income Taxes | ||||||||||||||
| Net Income Attributable to Kimberly-Clark Corporation | $ | $ | ||||||||||||
| Weighted-Average Common Shares | ||||||||||||||
| Basic | ||||||||||||||
| Dilutive effect of stock options and restricted share unit awards | ||||||||||||||
| Diluted | ||||||||||||||
| Basic: | ||||||||||||||
| Continuing Operations | $ | $ | ||||||||||||
| Discontinued Operations | ||||||||||||||
| Basic Earnings per Share | $ | $ | ||||||||||||
| Diluted: | ||||||||||||||
| Continuing Operations | $ | $ | ||||||||||||
| Discontinued Operations | ||||||||||||||
| Diluted Earnings per Share | $ | $ | ||||||||||||
We use the treasury stock method to calculate the dilutive effect of our outstanding stock-based awards. Options outstanding not included in the computation of diluted EPS because their exercise price was greater than the average market price of the common shares were 2.5 million and 1.2 million for the three months ended March 31, 2026 and 2025, respectively. The number of common shares outstanding as of March 31, 2026 and 2025 was 331.9
Note 7. Stockholders' Equity
Net unrealized currency gains or losses resulting from the translation of assets and liabilities of foreign subsidiaries, except those in highly inflationary economies, are recorded in Accumulated Other Comprehensive Income ("AOCI"). For these operations, changes in exchange rates generally do not affect cash flows; therefore, unrealized translation adjustments are recorded in AOCI rather than net income. Upon sale or substantially complete liquidation of any of these subsidiaries, the applicable unrealized translation adjustment would be removed from AOCI and reported as part of the gain or loss on the sale or liquidation. The change in unrealized translation for the three months ended March 31, 2026 was primarily due to the strengthening of the U.S. dollar versus various foreign currencies.
Also included in unrealized translation amounts are the effects of foreign exchange rate changes on intercompany balances of a long-term investment nature and transactions designated as hedges of net foreign investments.
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The changes in the components of AOCI attributable to Kimberly-Clark, net of tax, are as follows:
| Unrealized Translation | Defined Benefit Pension Plans | Other Postretirement Benefit Plans | Cash Flow Hedges | ||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | ( | ||||||||||||||||||||||||||
| (Income) loss reclassified from AOCI | (a) | ( | (a) | (b) | |||||||||||||||||||||||||
| Net current period other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||||||||
| (Income) loss reclassified from AOCI | (a) | ( | (a) | (b) | |||||||||||||||||||||||||
| Net current period other comprehensive income (loss) | ( | ( | |||||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||
(a) Included in Nonoperating expense as part of the computation of net periodic benefit costs.
(b) Included in Interest expense, Cost of products sold or Other (income) and expense, net, based on the income statement line that the hedged exposure affects earnings.
Note 8. Objectives and Strategies for Using Derivatives
As a multinational enterprise, we are exposed to financial risks, such as changes in foreign currency exchange rates, interest rates, and commodity prices. We employ a number of practices to manage these risks, including operating and financing activities and, where appropriate, the use of derivative instruments.
As of March 31, 2026 and December 31, 2025, derivative assets were $135 and $81 , respectively, and derivative liabilities were $175 and $191 , respectively, primarily comprised of foreign currency exchange, interest rate and commodity price contracts. Derivative assets are recorded in Other current assets or Other Assets, as appropriate, and derivative liabilities are recorded in Accrued expenses and other current liabilities or Other Liabilities, as appropriate.
Foreign Currency Exchange Rate Risk
Translation adjustments result from translating foreign entities' financial statements into U.S. dollars from their functional currencies. The risk to any particular entity's net assets is reduced to the extent that the entity is financed with local currency borrowings. A portion of our balance sheet translation exposure for certain affiliates, which results from changes in translation rates between the affiliates’ functional currencies and the U.S. dollar, is hedged with cross-currency swap contracts and certain foreign denominated debt which are designated as net investment hedges. The foreign currency exposure on certain non-functional currency denominated monetary assets and liabilities, primarily intercompany loans and accounts payable, is hedged primarily with undesignated derivative instruments.
Derivative instruments are used to hedge a portion of forecasted cash flows denominated in foreign currencies for non-U.S. operations' purchases of raw materials, which are priced in U.S. dollars, and imports of intercompany finished goods and work-in-process inventories priced predominantly in U.S. dollars and euros. The derivative instruments used to manage these exposures are designated as cash flow hedges.
Interest Rate Risk
Interest rate risk is managed using a portfolio of variable and fixed-rate debt composed of short and long-term instruments. Interest rate swap contracts may be used to facilitate the maintenance of the desired ratio of variable and fixed-rate debt and are designated as fair value hedges. From time to time, we also hedge the anticipated issuance of fixed-rate debt, and these contracts are designated as cash flow hedges.
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Commodity Price Risk
We use derivative instruments, such as commodity forward and price swap contracts, to hedge a portion of our exposure to market risk arising from changes in prices of certain commodities. These derivatives are primarily designated as cash flow hedges of specific quantities of the underlying commodity expected to be purchased in future months. In addition, we utilize negotiated contracts of varying durations along with strategic pricing mechanisms to manage volatility for a portion of our commodity costs.
Fair Value Hedges
Derivative instruments that are designated and qualify as fair value hedges are predominantly used to manage interest rate risk. The fair values of these derivative instruments are recorded as an asset or liability, as appropriate, with the offset recorded in Interest expense. The offset to the change in fair values of the related debt is also recorded in Interest expense. Any realized gain or loss on the derivatives that hedge interest rate risk is amortized to Interest expense over the life of the related debt. As of March 31, 2026, the aggregate notional values and carrying values of debt subject to outstanding interest rate contracts designated as fair value hedges were $325 and $303 , respectively. For the three months ended March 31, 2026 and 2025, gains or losses recognized in Interest expense for interest rate swaps were not material.
Cash Flow Hedges
For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative instrument is initially recorded in AOCI, net of related income taxes, and recognized in earnings in the same income statement line and period that the hedged exposure affects earnings. As of March 31, 2026, the aggregate notional value of outstanding foreign exchange and commodity derivative contracts designated as cash flow hedges was $2.1 billion. For the three months ended March 31, 2026 and 2025, no 5 . The maximum maturity of cash flow hedges in place as of March 31, 2026 is February 2029.
Net Investment Hedges
For derivative instruments that are designated and qualify as net investment hedges, unrealized gains and losses related to changes in fair value of net investment hedges are recorded in AOCI and offset the change in the value of the net investment being hedged. As of March 31, 2026, the aggregate notional value of these instruments was $2.0 billion. We exclude the interest accruals on cross-currency swap contracts and the forward points on foreign exchange forward contracts from the assessment and measurement of hedge effectiveness. Interest accruals on cross-currency swap contracts are recognized in earnings within Interest expense. We amortize the forward points on foreign exchange contracts into earnings within Interest expense over the life of the hedging relationship. For the three months ended March 31, 2026 and 2025, unrealized gains of $27 and unrealized losses of $20 , respectively, related to net investment hedge fair value changes were recorded in AOCI and no material amounts were reclassified from AOCI to Interest expense.
For the three months ended March 31, 2026 and 2025, no material amounts were excluded from the assessment of net investment, fair value or cash flow hedge effectiveness.
Undesignated Hedging Instruments
Gains or losses on undesignated foreign exchange instruments are immediately recognized in Other (income) and expense, net. For the three months ended March 31, 2026 and 2025, we recognized losses of $3 and gains of $24 , respectively. The effect on earnings from the use of these undesignated derivatives is substantially neutralized by the transactional gains and losses recorded on the underlying assets and liabilities. As of March 31, 2026, the notional amount of these undesignated derivative instruments was approximately $4.6 billion.
Note 9. Segment Reporting
The Company's continuing operations are organized by operating segments aggregated into two
As a result of the IFP Transaction discussed in Notes 1 and 3, the results of operations and applicable assets and liabilities of the IFP Business are reported as discontinued operations in the Company's financial statements and are excluded from segment results for all periods presented. Certain operations and commercial activities of the former IFP segment retained by K-C are now reported in the NA and IPC segments. For further information about these changes, refer to our Annual Report on Form 10-K for the year ended December 31, 2025.
15
The reportable segments were determined in accordance with how our Chief Executive Officer, who is our chief operating decision maker ("CODM"), develops and executes global strategies to drive growth and profitability. These strategies include global plans for branding and product positioning, technology, research and development programs, cost reductions including supply chain management, and capacity and capital investments for each of these businesses. The primary measure of segment profitability utilized by our CODM is segment operating profit. Our CODM uses this measure to assess the operating results and performance of our segments, perform analytical comparisons to budget and allocate resources to each segment. Segment operating profit excludes Corporate & Other, which primarily encompasses certain unallocated general corporate expenses, impairment charges, one-time (gains) or losses associated with acquisitions and divestitures, costs related to our reorganization activities that are not associated with the ongoing operations of the segments, certain operations of the former IFP segment that were divested prior to the IFP Transaction, and costs previously allocated to the former IFP segment that aren't reported as discontinued operations. Our CODM does not use assets by segment to evaluate performance or allocate resources. Therefore, we do not disclose assets by segment.
The principal sources of revenue in each segment are described below:
•North America consists of products encompassing each of our five global daily-need categories across consumer and professional channels including disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, reusable underwear, facial and bathroom tissue, paper towels, napkins, wipers, tissue, towels, soaps and sanitizers and other related products. These products are sold under the Huggies, Pull-Ups, GoodNites, Kotex, Poise, Depend, Kleenex, Scott, Cottonelle, Viva, Wypall and other brand names.
•International Personal Care consists of three core categories — Baby & Child Care, Adult Care and Feminine Care, including disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, reusable underwear and other related products. These products are sold under the Huggies, Kotex, Goodfeel, Intimus, Depend and other brand names.
The tables below present net sales and the significant expense categories that are included in Segment Operating Profit and regularly provided to our CODM:
| Three Months Ended March 31, 2026 | ||||||||||||||||||||
| NA | IPC | Total | ||||||||||||||||||
| Net Sales | $ | $ | $ | |||||||||||||||||
| Cost of Products Sold | ||||||||||||||||||||
| Advertising and Promotion Expense | ||||||||||||||||||||
| Research, Selling and General Expense | ||||||||||||||||||||
Other (Income) and Expense, net(a) | ||||||||||||||||||||
| Segment Operating Profit | $ | $ | $ | |||||||||||||||||
| Corporate & Other | ( | |||||||||||||||||||
| Total Operating Profit | $ | |||||||||||||||||||
| Three Months Ended March 31, 2025 | ||||||||||||||||||||
| NA | IPC | Total | ||||||||||||||||||
| Net Sales | $ | $ | $ | |||||||||||||||||
| Cost of Products Sold | ||||||||||||||||||||
| Advertising and Promotion Expense | ||||||||||||||||||||
| Research, Selling and General Expense | ||||||||||||||||||||
Other (Income) and Expense, net(a) | ||||||||||||||||||||
| Segment Operating Profit | $ | $ | $ | |||||||||||||||||
| Corporate & Other | ( | |||||||||||||||||||
| Total Operating Profit | $ | |||||||||||||||||||
(a) Other (income) and expense, net primarily includes the effects of changes in exchange rates on monetary assets and liabilities for subsidiaries where we have adopted highly inflationary accounting.
16
Depreciation and amortization expense by segment:
| Three Months Ended March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| NA | $ | $ | ||||||||||||
| IPC | ||||||||||||||
| Total Segment Depreciation and Amortization | ||||||||||||||
| Corporate & Other | ||||||||||||||
Total(a) | $ | $ | ||||||||||||
(a) Excludes discontinued operations. See Note 3 for depreciation and amortization of discontinued operations.
Capital spending by segment:
| Three Months Ended March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| NA | $ | $ | ||||||||||||
| IPC | ||||||||||||||
| Total Segment Capital Spending | ||||||||||||||
| Corporate & Other | ||||||||||||||
Total(a) | $ | $ | ||||||||||||
Sales of Principal Products:
| Three Months Ended March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Baby and Child Care | $ | $ | ||||||||||||
| Family Care | ||||||||||||||
| Professional | ||||||||||||||
| Adult Care | ||||||||||||||
| Feminine Care | ||||||||||||||
| All other | ||||||||||||||
| Total | $ | $ | ||||||||||||
Note 10. Supplemental Balance Sheet Data
The following schedule presents a summary of inventories by major class:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| LIFO | Non-LIFO | Total | LIFO | Non-LIFO | Total | |||||||||||||||||||||||||||||||||
| Raw materials | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Work in process | ||||||||||||||||||||||||||||||||||||||
| Finished goods | ||||||||||||||||||||||||||||||||||||||
| Supplies and other | ||||||||||||||||||||||||||||||||||||||
| Excess of FIFO or weighted-average cost over LIFO cost | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Inventories are valued at the lower of cost or net realizable value, determined on the FIFO or weighted-average cost methods, and at the lower of cost or market, determined on the LIFO cost method.
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The following schedule presents a summary of property, plant and equipment, net:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Land | $ | $ | ||||||||||||
| Buildings | ||||||||||||||
| Machinery and equipment | ||||||||||||||
| Construction in progress | ||||||||||||||
| Less accumulated depreciation | ( | ( | ||||||||||||
| Total | $ | $ | ||||||||||||
Supplier Finance Program
We have a supplier finance program managed through two global financial institutions under which we agree to pay the financial institutions the stated amount of confirmed invoices from our participating suppliers on the invoice due date. We, or the global financial institutions, may terminate our agreements at any time upon 30 days written notice. The global financial institutions may terminate our agreements at any time upon three days written notice in the event there are insufficient funds available for disbursement. We do not provide any forms of guarantees under these agreements. Supplier participation in the program is solely up to the supplier, and the participating suppliers negotiate their arrangements directly with the global financial institutions. We have no economic interest in a supplier’s decision to participate in the program, and their participation has no bearing on our payment terms or amounts due. The payment terms that we have with our suppliers under this program generally range from 75 to 180 days and are considered commercially reasonable. The outstanding amount related to the suppliers participating in this program was $1.0 billion and $1.1 billion as of March 31, 2026 and December 31, 2025, of which $185 and $184 , respectively, are reported as discontinued operations. Amounts are recorded within Trade accounts payable and Current liabilities of discontinued operations.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Introduction
This Management's Discussion and Analysis ("MD&A") of Financial Condition and Results of Operations is intended to provide investors with an understanding of our recent performance, financial condition, cash flows and future prospects. The following MD&A should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 and the Unaudited Interim Condensed Consolidated Financial Statements and related notes contained in this Quarterly Report on Form 10-Q. Our analysis compares results for the three months ended March 31, 2026 to the same period in 2025. As discussed in the Notes to the Unaudited Interim Condensed Consolidated Financial Statements, the results and related assets and liabilities of the IFP Business are reported as discontinued operations. As a result, unless specifically stated, all discussions included below reflect continuing operations for all periods presented. Any reference to "N.M." indicates the calculation is not meaningful. Amounts are reported in millions of dollars, except per share amounts, unless otherwise noted. The following will be discussed and analyzed:
•Overview of Business and Recent Developments
•Results of Operations
•Liquidity and Capital Resources
Throughout this MD&A, we refer to financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. ("GAAP"), and are therefore referred to as non-GAAP financial measures. We believe these measures provide our investors with additional information about our underlying results and trends, as well as insight to some of the financial measures used to evaluate management. For additional information and reconciliations to the most closely comparable financial measures presented in our Unaudited Interim Condensed Consolidated Financial Statements, which are calculated in accordance with GAAP, see "Summary of Non-GAAP Financial Measures" below.
Overview of Business and Recent Developments
We are a global company focused on delivering products and solutions that provide better care for a better world, with manufacturing facilities in 30 countries, including our equity affiliates, and products sold in more than 175
18
countries and territories. Our products are sold under well-known brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend.
Conflict in the Middle East
Ongoing geopolitical conflicts in the Middle East have led to disruptions in global energy supplies and volatility in global energy prices, including the prices for certain raw materials that are principally derived from petroleum, which may contribute to inflationary pressures, disrupt global supply chains and adversely impact consumer spending patterns. Based on preliminary analysis reflecting the current market environment and assuming oil prices remain at $100 per barrel for the remainder of the year, we estimate incremental input costs of approximately $200 (prior to consideration of mitigation actions) during the remainder of 2026. We are continuing to evaluate the evolving macroeconomic environment and our ability to mitigate the impact on our business, consolidated results of operations and financial condition.
Pending Acquisition of Kenvue, Inc.
On November 2, 2025, we entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire the outstanding equity interests of Kenvue, Inc. ("Kenvue"), a global consumer health leader, for stock and cash consideration (the "Kenvue Acquisition"). Under the terms of the Merger Agreement, which was unanimously approved by the Boards of Directors of each of Kimberly-Clark and Kenvue, each share of Kenvue common stock, par value $0.01 per share, issued and outstanding at the close of the Kenvue Acquisition (subject to certain provisions within the Merger Agreement) will be converted into the right to receive (i) 0.14625 shares of Kimberly-Clark common stock, par value $1.25 per share (the "Stock Consideration"), plus (ii) $3.50 in cash (the "Cash Consideration" and, together with the Stock Consideration, the "Merger Consideration"). In total, we expect approximately 280 million shares of common stock to be issued and approximately $6.7 billion to be paid for the Merger Consideration. The Cash Consideration is expected to be funded through a combination of cash on hand, proceeds from new debt issuance, and proceeds from the IFP Transaction (as defined below). The actual value of the transaction will fluctuate based upon changes in the price of Kimberly-Clark common stock and the number of shares of Kenvue common stock outstanding at the time of closing.
During the three months ended March 31, 2026, we incurred $48 of acquisition-related costs in connection with the Kenvue Acquisition, which are included in Marketing, research and general expenses. See Item 1, Note 4 to the Unaudited Interim Condensed Consolidated Financial Statements for further details.
International Family Care and Professional ("IFP") Transaction
On June 5, 2025, we announced that the Company will form a joint venture with Suzano S.A. ("Suzano") and Suzano International Holding B.V., a wholly-owned subsidiary of Suzano ("Buyer"), comprised of substantially all the operations of the Company's former IFP segment (the "IFP Business"). At the time of closing, which is expected to take place in mid-2026 and will only take place following the satisfaction of consultation requirements and customary closing conditions, including obtaining required regulatory approvals, Buyer will acquire a 51% interest in the joint venture for a purchase price of approximately $1.7 billion, subject to certain closing adjustments set forth in the Equity and Asset Purchase Agreement, and we will retain a 49% equity interest (the "IFP Transaction"). As a result, the results of operations and applicable assets and liabilities of the IFP Business are reported as discontinued operations in the Company's financial statements for all periods presented. See Item 1, Notes 1 and 3 to the Unaudited Interim Condensed Consolidated Financial Statements for further details.
As a result of the IFP Transaction discussed above, the Company's continuing operations are now organized into two reportable segments defined by geographic region: North America ("NA") and International Personal Care ("IPC"). The results of the IFP Business are excluded from segment results for all periods presented. Segments are described in greater detail in Item 1, Note 9 to the Unaudited Interim Condensed Consolidated Financial Statements.
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2024 Transformation Initiative
The 2024 Transformation Initiative is designed to sharpen our strategic focus through a new operating model and strategy that leverages three synergistic pillars:
•Accelerating pioneering innovation to capture significant growth available in our product categories by investing in science-based and proprietary technology to solve unmet and evolving consumer needs, and delivering breakthrough storytelling to drive category participation and brand love;
•Optimizing our margin structure to deliver superior consumer propositions at every rung of the good, better, best ladder, and implement initiatives and deploy technology and data analytics designed to create a fast, adaptable, integrated supply chain with greater visibility that can deliver continuous improvement; and
•Wiring our organization for growth to drive agility, speed, and focused execution that extends our competitive advantages further into the future.
The transformation is expected to impact our organization in all major geographies, and workforce reductions are expected to be in the range of 4% to 5%. Certain actions under the 2024 Transformation Initiative are being finalized for implementation, and accounting for such actions will commence when the actions are authorized for execution. The 2024 Transformation Initiative is expected to be completed by the end of 2026. Total pre-tax savings are expected to be $3.0 billion in gross productivity; inclusive of input cost and manufacturing cost savings, and $200 in selling, general and administrative expenses. Total costs are anticipated to be approximately $1.5 billion pre-tax. Cash costs are expected to be approximately 60% of that amount, primarily related to workforce reductions and other program costs. Expected non-cash charges are primarily related to incremental depreciation and asset write-offs, including losses associated with the expected exit of certain markets. For the three months ended March 31, 2026 and 2025, total 2024 Transformation Initiative charges were $51 pre-tax ($32 after-tax) and $77 pre-tax ($77 after-tax), respectively. Through March 31, 2026, cumulative pre-tax charges for the 2024 Transformation Initiative were $859 ($666 after-tax), and approximately 90% of the total expected selling, general and administrative expense savings have been realized or approved for action program to date.
Results of Operations
Consolidated Results
Summary of Results
| Three Months Ended March 31 | ||||||||||||||||||||
| 2026 | 2025 | % Change | ||||||||||||||||||
| Net Sales | $ | 4,163 | $ | 4,054 | 2.7 | % | ||||||||||||||
| Gross Profit | 1,534 | 1,509 | 1.7 | % | ||||||||||||||||
| Operating Profit | 753 | 631 | 19.3 | % | ||||||||||||||||
| Provision for income taxes | (164) | (131) | 25.2 | % | ||||||||||||||||
| Income from Continuing Operations | 574 | 470 | 22.1 | % | ||||||||||||||||
| Income from Discontinued Operations, Net of Income Taxes | 101 | 103 | (1.9) | % | ||||||||||||||||
| Net Income Attributable to Kimberly-Clark Corporation | 665 | 567 | 17.3 | % | ||||||||||||||||
| Diluted Earnings per Share from Continuing Operations | 1.70 | 1.39 | 22.3 | % | ||||||||||||||||
| Diluted Earnings per Share from Discontinued Operations | 0.30 | 0.31 | (3.2) | % | ||||||||||||||||
Adjusted Results - Continuing Operations
| Three Months Ended March 31 | ||||||||||||||||||||
| 2026 | 2025 | % Change | ||||||||||||||||||
Adjusted Gross Profit(a) | $ | 1,576 | $ | 1,562 | 0.9 | % | ||||||||||||||
Adjusted Operating Profit(a) | 732 | 706 | 3.7 | % | ||||||||||||||||
Adjusted Earnings per Share(a) | 1.60 | 1.62 | (1.2) | % | ||||||||||||||||
Adjusted Effective Tax Rate(a) | 26.2 | % | 20.7 | % | 5.5 | % | ||||||||||||||
(a) Adjusted amounts are non-GAAP financial measures. See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to Non-GAAP measures.
20
Net Sales
Drivers of the changes in net sales were:
| Percent Change in Net Sales | Volume | Mix/Other | Net Price | Divestitures and Business Exits(c) | Currency Translation | Total(a) | Organic(b) | |||||||||||||||||||||||||||||||||||||
| Three Months Ended | 2.6 | 0.4 | (0.5) | (1.8) | 2.0 | 2.7 | 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" below for 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 businesses and markets in conjunction with the 2024 Transformation Initiative.
Net sales of $4.2 billion for the three months ended March 31, 2026 increased 2.7% primarily driven by organic sales growth and favorable currency impacts, partially offset by divestitures and business exits. Organic sales increased 2.5% primarily from volume gains of 2.6%.
Gross and Operating Profits
Gross profit of $1.5 billion for the three months ended March 31, 2026 increased 1.7%, while gross margin of 36.8% decreased 40 basis points. Gross margin in the current and prior year included approximately 110 basis points and 130 basis points, respectively, of charges related to the 2024 Transformation Initiative, primarily for incremental depreciation expense. Excluding these charges, adjusted gross profit was $1.6 billion, an increase of 0.9%, while adjusted gross margin was 37.9%, a decrease of 60 basis points. The decrease was primarily due to supply chain related investments and unfavorable pricing net of cost inflation, partially offset by gross productivity savings from integrated margin management of approximately $115.
Operating profit of $753 for the three months ended March 31, 2026 increased 19.3%, inclusive of charges of $51 and $48 related to the 2024 Transformation Initiative and the Kenvue Acquisition, respectively, offset by a benefit of $120 related to the settlement of insurance claims from a previous acquisition. Results in the prior year included charges of $75 related to the 2024 Transformation Initiative. Excluding these items, adjusted operating profit for the three months ended March 31, 2026 and 2025 was $732 and $706, respectively.
Drivers of the changes in adjusted operating profit were:
| Percent Change in Adjusted Operating Profit | Volume | Net Price | Input Costs | Other Manufacturing Costs(a) | Currency Translation | Other(b) | Total(c) | |||||||||||||||||||||||||||||||||||||
| Three Months Ended | 0.4 | (2.9) | (4.6) | 4.7 | 2.5 | 3.6 | 3.7 | |||||||||||||||||||||||||||||||||||||
(a) Includes net impact of productivity initiatives, product and supply chain investments and other changes in cost of products sold.
(b) Includes impact of changes in product mix, marketing, research and general expenses and other (income) and expense, net.
(c) Adjusted Operating Profit is a non-GAAP financial measure. See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to non-GAAP measures.
Adjusted operating profit for the three months ended March 31, 2026 increased 3.7% driven by lower marketing, research and general expenses and favorable currency impacts, partially offset by impacts from divestitures and business exits of approximately 470 basis points.
Income from Continuing Operations
Income from Continuing Operations for the three months ended March 31, 2026 was $574 compared to $470 in the prior year. The increase was primarily related to the settlement of insurance claims from a previous acquisition, coupled with higher income from equity companies, partially offset by higher income tax expense.
Our share of net income of equity companies for the three months ended March 31, 2026 was $53 compared to $44 in the prior year. The increase was primarily driven by Kimberly-Clark de Mexico, S.A.B. de C.V., due to favorable foreign currency impacts and productivity savings, partially offset by higher inputs costs.
The effective tax rate for the three months ended March 31, 2026 was 23.9% compared to 23.5% in the prior year. The adjusted effective tax rate for the three months ended March 31, 2026 was 26.2% compared to 20.7% in the prior year. The increase was driven by the lapping of discrete tax benefits related to the resolution of certain tax matters in the first quarter of 2025 and a change in the US tax law effective July 2025.
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Diluted earnings per share of $1.70 for the three months ended March 31, 2026 increased 22.3% reflective of the increase in income from continuing operations discussed above. Adjusted diluted earnings per share of $1.60 decreased 1.2% primarily due to the higher adjusted effective tax rate discussed above.
Income from Discontinued Operations, Net of Income Taxes
Income from discontinued operations, net of income taxes for the three months ended March 31, 2026 was $101 compared to $103 in the prior year. Current year results included pre-tax separation costs of $32 that were offset by the cessation of depreciation and amortization expense of approximately $30.
Segment Results
Drivers of the changes in segment net sales and operating profit were:
| Percent Change in Segment Net Sales | Volume | Mix/Other | Net Price | Divestitures and Business Exits(c) | Currency Translation | Total(a) | Organic(b) | |||||||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| NA | 1.9 | (0.2) | — | (2.7) | 0.3 | (0.6) | 1.8 | |||||||||||||||||||||||||||||||||||||
| IPC | 4.1 | 1.4 | (1.5) | — | 5.2 | 9.1 | 4.0 | |||||||||||||||||||||||||||||||||||||
| Percent Change in Segment Operating Profit | Volume | Net Price | Input Costs | Other Manufacturing Costs(d) | Currency Translation | Other(e) | Total | |||||||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| NA | (1.5) | 0.1 | (2.3) | (0.3) | 0.4 | (4.5) | (8.1) | |||||||||||||||||||||||||||||||||||||
| IPC | 6.4 | (10.6) | (8.5) | 15.1 | 7.6 | 11.9 | 21.9 | |||||||||||||||||||||||||||||||||||||
(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" below for 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 businesses and markets in conjunction with the 2024 Transformation Initiative.
(d) Includes net impact of productivity initiatives, product and supply chain investments and other changes in cost of products sold.
(e) Includes impact of changes in product mix, marketing, research and general expenses and other (income) and expense, net.
North America
| Three Months Ended March 31 | ||||||||||||||||||||
| 2026 | 2025 | % Change | ||||||||||||||||||
| Net Sales | $ | 2,651 | $ | 2,668 | (0.6) | % | ||||||||||||||
| Operating Profit | 623 | 678 | (8.1) | % | ||||||||||||||||
Net sales of $2.7 billion for the three months ended March 31, 2026 decreased 0.6%, as the exit of the private label diaper business in the US was partially offset by organic sales growth. Organic sales increased 1.8% primarily from volume gains of 1.9%, driven by Baby & Child Care, Family Care and Professional categories.
Operating profit for the three months ended March 31, 2026 of $623 decreased 8.1%, driven by impacts from divestitures and business exits (approximately 490 basis points), supply chain related investments and incremental advertising spend, partially offset by gross productivity savings.
International Personal Care
| Three Months Ended March 31 | ||||||||||||||||||||
| 2026 | 2025 | % Change | ||||||||||||||||||
| Net Sales | $ | 1,512 | $ | 1,386 | 9.1 | % | ||||||||||||||
| Operating Profit | 245 | 201 | 21.9 | % | ||||||||||||||||
Net sales of $1.5 billion for the three months ended March 31, 2026 increased 9.1% primarily driven by favorable currency impacts of 5.2% and organic sales growth of 4.0%. Organic sales benefited from volume and mix gains of 4.1% and 1.4%, respectively, primarily in China, Indonesia, South Korea and Brazil, partially offset by lower pricing.
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Operating profit for the three months ended March 31, 2026 of $245 increased 21.9% driven by gross productivity savings, volume and mix gains, favorable currency impacts and lower marketing, research and general expenses, partially offset by unfavorable pricing net of cost inflation.
Liquidity and Capital Resources
As detailed in Item 1, Note 1 to the Unaudited Interim Condensed Consolidated Financial Statements, the Condensed Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. As a result, unless specifically stated, the following discussion reflects Kimberly Clark's consolidated results for all periods presented.
Cash Provided by Operations
Cash provided by operations was $745 during the three months ended March 31, 2026 compared to $327 in the prior year. The increase was driven primarily by an insurance recovery associated with the settlement of claims from a previous acquisition and favorable changes in operating working capital, due in part to lower incentive payments in the current year.
Investing
Cash used for investing was $355 during the three months ended March 31, 2026 compared to $119 in the prior year, primarily reflecting higher planned capital spending. During the three months ended March 31, 2026, our capital spending was $424 compared to $204 in the prior year. We anticipate that full year capital spending will be approximately $1.3 billion, including incremental spending from the 2024 Transformation Initiative.
Financing
Cash used for financing was $527 during the three months ended March 31, 2026 compared to $683 in the prior year. This decrease was primarily due to an increase in U.S. commercial paper borrowings, partially offset by higher debt repayments in the current year. During the three months ended March 31, 2026, we did not repurchase any shares of common stock.
We issue long-term debt in the public market periodically. Proceeds from the offerings are used for general corporate purposes, including repayment of maturing debt or outstanding commercial paper indebtedness.
Our short-term debt, which consists of U.S. commercial paper with original maturities up to 90 days and/or other short-term debt issued by non-U.S. subsidiaries, was $595 as of March 31, 2026 (included in Debt payable within one year on the Condensed Consolidated Balance Sheets). The average month-end balance of short-term debt for the three months ended March 31, 2026 was $711. These short-term borrowings provide supplemental funding to support our operations. The level of short-term debt generally fluctuates depending upon the amount of operating cash flows and the timing of customer receipts and payments for items such as pension contributions, dividends and income taxes.
As a result of the pending Kenvue Acquisition, in November 2025, the Company and JPMorgan Chase Bank, N.A. (the "Bank") executed a certain bridge loan facility commitment letter, pursuant to which the Bank has committed to provide bridge financing (the "Bridge Facility") in an amount of $7.7 billion to the Company to fund the Cash Consideration, the fees, costs and expenses incurred in connection with the transactions contemplated by the Merger Agreement and to repay certain existing indebtedness of Kenvue and/or its subsidiaries. In December 2025, $3.8 billion of the commitments in the Bridge Facility were terminated in connection with entry into the New Revolving Credit Facility and DDTL Credit Facility (as defined below).
In December 2025, we entered into (i) the Five-Year Revolving Credit Agreement by and among Kimberly-Clark, JPMorgan Chase Bank, N.A. (the "Bank") and the other lenders party thereto (the “New Revolving Credit Facility”) and (ii) the Delayed Draw Term Loan Credit Agreement by and among Kimberly-Clark, the Bank, and the other lenders party thereto (the “DDTL Credit Facility”). The New Revolving Credit Facility matures in December 2030 and provides for a revolving credit facility of up to $4.0 billion (which may be increased by up to $1.0 billion upon obtaining additional commitments from the then-existing or new lenders and the satisfaction of certain other conditions). Concurrently with the closing of the New Revolving Credit Facility and the DDTL Credit Facility, we terminated the commitments outstanding under our previous $750 revolving credit facility, originally set to mature in May 2026 and reduced the commitments outstanding under our existing $2.0 billion revolving credit facility, which matures in June 2028, to $1.0 billion. For further information, refer to our Annual Report on Form 10-K for the year ended December 31, 2025.
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As of March 31, 2026 and December 31, 2025, total debt from continuing operations was $7.1 billion and $7.2 billion, respectively.
The Organization for Economic Co-Operation and Development introduced a framework under Pillar Two which includes a 15% global minimum tax rate. Many jurisdictions in which we do business have started to enact laws implementing Pillar Two. We are monitoring these developments and currently do not believe these rules will have a material impact on our financial results.
We believe that our ability to generate cash from operations and our capacity to issue short-term and long-term debt are adequate to fund working capital, obligations related to our 2024 Transformation Initiative, capital spending, pension contributions, share repurchases, dividends and other needs for the foreseeable future. Further, we do not expect restrictions or taxes on repatriation of cash held outside of the U.S. to have a material effect on our overall business, liquidity, financial condition or results of operations for the foreseeable future.
Information Concerning Forward-Looking Statements
Certain matters contained in this report concerning our plans and expectations regarding the pending Kenvue Acquisition (referred to below as the "pending mergers" or the "mergers") and the pending IFP Transaction, the business outlook, including raw material, energy and 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's expectations and beliefs concerning future events impacting Kimberly-Clark. There can be no assurance that these future events will occur as anticipated or that our results will be as estimated. Forward-looking statements speak only as of the date they were made, and we undertake no obligation 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 successful completion of the mergers and the achievement of future cost savings and projected volume increases. In addition, many factors outside our control, including risks and uncertainties around the pending mergers (including the risk that the anticipated benefits and synergies of the 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 be less 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 the mergers), the pending IFP Transaction (including risks related to delays or failure to complete the proposed transaction, 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 Transformation Initiative (including risks related to disruptions to our business or operations or related to any delays in implementation), war in Ukraine (including the related responses of consumers, customers, and suppliers and sanctions issued by the U.S., the European Union, Russia or other countries), government trade or similar regulatory actions (including current and potential trade and tariff actions affecting the countries where we operate and the resulting negative impacts on our supply chain, commodity costs, and consumer spending), pandemics, epidemics, fluctuations in foreign currency exchange rates, 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 our acquisition and disposition activity, impairment of goodwill and intangible assets and our projections of operating results and other factors that may affect our impairment testing, changes in customer preferences, severe weather conditions, regional instabilities and hostilities (including the war in Iran), potential competitive pressures on selling prices for our products, energy costs, general economic and political conditions globally and in the markets 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 SEC filings, 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.
SUMMARY OF NON-GAAP FINANCIAL MEASURES
The following provides the reconciliation of the non-GAAP financial measures provided in this report to the most closely related GAAP measure. These measures include: Organic Sales Growth, Adjusted Gross Profit, Adjusted
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Operating Profit, Adjusted Earnings per Share, and Adjusted Effective Tax Rate. All discussions regarding non-GAAP financial measures reflect results from our continuing operations for all periods presented.
•Organic Sales Growth is defined as the change in Net Sales, as determined in accordance with GAAP, excluding the impacts of currency translation and divestitures and business exits.
•Adjusted Gross and Operating Profit, Adjusted Earnings per Share, and Adjusted Effective Tax Rate are defined as Gross Profit, Operating Profit, Diluted Earnings per Share, and Effective Tax Rate, respectively, as determined in accordance with GAAP, excluding the impacts of 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 is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. The impact of these non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income from Continuing Operations Before Income Taxes and Equity Interests and Provision for income taxes.
We use these non-GAAP financial measures to assist in comparing our performance on a consistent basis for purposes of business decision making by removing the impact of certain items that we do not believe reflect our underlying and ongoing operations. We believe that presenting these non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating our results. We believe that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliation to those measures, provides investors with additional understanding of the factors and trends affecting our business than could 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 should be read only in conjunction with our Unaudited Interim Condensed Consolidated Financial Statements prepared in accordance with GAAP. There are limitations to these non-GAAP financial measures because they are not prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companies due to potential differences in methods of calculation and items being excluded. We compensate for these limitations by using these non-GAAP financial measures as a supplement to the GAAP measures and by providing reconciliations of the non-GAAP and comparable GAAP financial measures.
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 our proprietary pipeline of innovation in right-to-win spaces and improve our growth trajectory, profitability, and returns on investment. See Item 1, Note 2 to the Unaudited Interim Condensed Consolidated Financial Statements for details.
•Kenvue Acquisition - Acquisition-related costs incurred in connection with the pending Kenvue Acquisition, primarily related to external advisory, legal, accounting, and other related costs. See Item 1, Note 4 to the Unaudited Interim Condensed Consolidated Financial Statements for details.
•Insurance Recovery – Settlement of insurance claims related to a previous acquisition.
The following table provides a reconciliation of Organic Sales Growth from continuing operations:
| Three Months Ended March 31, 2026 | ||||||||||||||||||||
| Percent change vs. the prior year period | ||||||||||||||||||||
| NA | IPC | Total | ||||||||||||||||||
| Net Sales Growth | (0.6) | 9.1 | 2.7 | |||||||||||||||||
| Currency Translation | (0.3) | (5.2) | (2.0) | |||||||||||||||||
| Divestitures and Business Exits | 2.7 | — | 1.8 | |||||||||||||||||
Organic Sales Growth(a) | 1.8 | 4.0 | 2.5 | |||||||||||||||||
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The following table provides a reconciliation of Adjusted Gross Profit from continuing operations:
| Three Months Ended March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Gross Profit | $ | 1,534 | $ | 1,509 | ||||||||||
| 2024 Transformation Initiative | 42 | 53 | ||||||||||||
| Adjusted Gross Profit | $ | 1,576 | $ | 1,562 | ||||||||||
The following table provides a reconciliation of Adjusted Operating Profit from continuing operations:
| Three Months Ended March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Operating Profit | $ | 753 | $ | 631 | ||||||||||
| 2024 Transformation Initiative | 51 | 75 | ||||||||||||
| Kenvue Acquisition | 48 | — | ||||||||||||
| Insurance Recovery | (120) | — | ||||||||||||
| Adjusted Operating Profit | $ | 732 | $ | 706 | ||||||||||
The following table provides a reconciliation of Adjusted Earnings per Share from continuing operations:
| Three Months Ended March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Diluted Earnings per Share | $ | 1.70 | $ | 1.39 | ||||||||||
| 2024 Transformation Initiative | 0.09 | 0.23 | ||||||||||||
| Kenvue Acquisition | 0.13 | — | ||||||||||||
| Insurance Recovery | (0.32) | — | ||||||||||||
Adjusted Earnings per Share(a) | $ | 1.60 | $ | 1.62 | ||||||||||
(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 in the tax jurisdiction(s) of the underlying non-GAAP adjustment. Refer to the Adjusted Effective Tax Rate reconciliation below for the tax effect of these adjustments on the Company's reported Provision for income taxes.
The following table provides a reconciliation of the continuing operations Adjusted Effective Tax Rate:
| Three Months Ended March 31 | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Income From Continuing Operations Before Income Taxes and Equity Interests | Provision for Income Taxes | Income From Continuing Operations Before Income Taxes and Equity Interests | Provision for Income Taxes | |||||||||||||||||||||||
| As Reported | $ | 685 | $ | (164) | $ | 557 | $ | (131) | ||||||||||||||||||
| 2024 Transformation Initiative | 51 | (19) | 77 | — | ||||||||||||||||||||||
| Kenvue Acquisition | 48 | (5) | — | — | ||||||||||||||||||||||
| Insurance Recovery | (120) | 14 | — | — | ||||||||||||||||||||||
| As Adjusted | $ | 664 | $ | (174) | $ | 634 | $ | (131) | ||||||||||||||||||
| Effective Tax Rate | ||||||||||||||||||||||||||
| As Reported | 23.9 | % | 23.5 | % | ||||||||||||||||||||||
| As Adjusted | 26.2 | % | 20.7 | % | ||||||||||||||||||||||
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Item 4. Controls and Procedures
As of March 31, 2026, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of March 31, 2026. There were no changes in our internal control over financial reporting during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We repurchase shares of Kimberly-Clark common stock from time to time pursuant to publicly announced share repurchase programs. On January 22, 2021, our Board of Directors authorized a share repurchase program that allows for the repurchase of 40 million shares in an amount not to exceed $5 billion. As of March 31, 2026, the Company has repurchased approximately 9.2 million shares and approximately 30.8 million shares remain available for repurchase under the program. No shares were repurchased during the three months ended March 31, 2026.
Item 5. Other Information
(c)Our directors and officers may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Securities Exchange Act of 1934, as amended. During the three months ended March 31, 2026, no such plans or other arrangements were adopted terminated
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Item 6. Exhibits
(a)Exhibits
Exhibit No. (31)a. Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act, filed herewith.
Exhibit No. (31)b. Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act, filed herewith.
Exhibit No. (32)a. Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, furnished herewith.
Exhibit No. (32)b. Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, furnished herewith.
Exhibit No. (101).INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
Exhibit No. (101).SCH XBRL Taxonomy Extension Schema Document
Exhibit No. (101).CAL XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit No. (101).DEF XBRL Taxonomy Extension Definition Linkbase Document
Exhibit No. (101).LAB XBRL Taxonomy Extension Label Linkbase Document
Exhibit No. (101).PRE XBRL Taxonomy Extension Presentation Linkbase Document
Exhibit No. (104) The cover page from this Current Report on Form 10-Q formatted as Inline XBRL
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| KIMBERLY-CLARK CORPORATION | ||||||||
| (Registrant) | ||||||||
| By: | /s/ Andrew Scribner | |||||||
| Andrew Scribner | ||||||||
| Vice President and Controller | ||||||||
| (Principal Accounting Officer) | ||||||||
April 28, 2026
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FAQ
How did Kimberly-Clark (KMB) perform financially in Q1 2026?
Kimberly-Clark delivered higher profit in Q1 2026. Net sales from continuing operations rose 2.7% to $4.16 billion, while income from continuing operations increased to $574 million. Diluted EPS from continuing operations improved to $1.70, versus $1.39 a year earlier.
What is Kimberly-Clark’s pending acquisition of Kenvue and its expected size?
Kimberly-Clark plans to acquire Kenvue for stock and cash. Each Kenvue share will receive 0.14625 Kimberly-Clark shares plus $3.50 cash. The company expects to issue about 280 million shares and pay roughly $6.7 billion in cash to complete the transaction.
What is the Suzano joint venture and how does it affect Kimberly-Clark (KMB)?
Kimberly-Clark is carving out its International Family Care and Professional business into a joint venture with Suzano. Suzano will acquire a 51% interest for about $1.7 billion, while Kimberly-Clark retains 49%. The IFP business is now reported as discontinued operations in the company’s financial statements.
What progress has Kimberly-Clark made on its 2024 Transformation Initiative?
The 2024 Transformation Initiative aims to streamline operations and improve margins. It is expected to cost about $1.5 billion pre‑tax and generate $3.0 billion in gross productivity plus $200 million in SG&A savings. By March 31, 2026, cumulative pre‑tax charges reached $859 million.
How strong was Kimberly-Clark’s cash flow and capital spending in Q1 2026?
Kimberly-Clark’s operating cash flow improved significantly in Q1 2026. Cash provided by operations increased to $745 million from $327 million, helped by an insurance recovery and better working capital. Capital spending also rose to $424 million, with full-year spending expected around $1.3 billion.
How did segment performance look for Kimberly-Clark’s North America and International Personal Care units?
North America sales were $2.65 billion, down 0.6%, with operating profit of $623 million, down 8.1%, partly due to business exits and higher investments. International Personal Care grew sales 9.1% to $1.51 billion and operating profit 21.9% to $245 million, aided by volume, mix and currency tailwinds.