Kimberly-Clark (NYSE: KMB) lifts Q2 margins as it reshapes portfolio and eyes Kenvue
Rhea-AI Filing Summary
Kimberly-Clark reported modest top-line growth but stronger margins from its core business for the quarter ended June 30, 2026. Net sales from continuing operations were $4.19 billion, up 0.6% year over year, while income from continuing operations was $410 million versus $444 million, reflecting a higher effective tax rate. Adjusted operating profit rose to $757 million and adjusted EPS from continuing operations increased 10.4% to $1.80, driven by productivity savings, tariff refunds and currency tailwinds, partly offset by lower net pricing and the exit of certain businesses.
The company completed the sale of a 51% interest in its International Family Care and Professional business on July 1, 2026 for approximately $1.3 billion in cash and retained a 49% equity stake initially valued at about $1.2 billion; this business is reported as discontinued operations, which posted a $60 million loss this quarter due to separation and tax charges. Kimberly-Clark continues to pursue the pending Kenvue acquisition, expected to involve issuing about 280 million shares and paying roughly $6.7 billion in cash.
The 2024 Transformation Initiative, extended through 2028, has generated cumulative pre-tax charges of $913 million toward an anticipated $1.5 billion, with significant productivity savings already identified. Management also notes short-term pressure from a social-media-driven diaper demand disruption in China and estimates roughly $150 million of incremental 2026 input costs tied to Middle East energy volatility.
Positive
- None.
Negative
- None.
Filing Explained
The proposed Kenvue issuance of 280 million shares is alongside 332.6 million currently outstanding; issuance has not yet occurred.
Kimberly-Clark reports that the Kenvue acquisition remains pending: the contemplated consideration includes about
As a Form 10-Q, this filing provides interim financial statements and updates on risks and liquidity. The proposed shares are an issuance plan, not shares issued in this filing.
Issuing those additional shares would increase the total share count and reduce existing holders’ percentage ownership absent offsetting changes; the filing does not provide a completed issuance or closing date.
The IFP transaction is complete as of July 1, 2026. The filing states that approximately
The next material resolution point is completion of the Kenvue acquisition, expected in the second half of 2026 but still subject to foreign regulatory approvals and other customary closing conditions.
Key Figures
Net Sales: $ 4,189
Income from Continuing Operations: $ 410
Net Income Attributable to Kimberly-Clark Corporation: $ 345
+5 more
8 metrics
Net Sales
$ 4,189
Three months ended June 30, 2026 from continuing operations
Income from Continuing Operations
$ 410
Three months ended June 30, 2026
Net Income Attributable to Kimberly-Clark Corporation
$ 345
Three months ended June 30, 2026, including discontinued operations
Diluted Earnings per Share from Continuing Operations
1.22
Three months ended June 30, 2026
Cash Provided by Operations
$ 1,653
Six months ended June 30, 2026
Total Debt from Continuing Operations
$ 6.5 billion
As of June 30, 2026
IFP Transaction Cash Purchase Price
approximately $1.3 billion
Cash consideration received at completion on July 1, 2026
Expected Kenvue Cash Consideration
approximately $6.7 billion
Planned cash portion of Kenvue Acquisition Merger Consideration
Key Terms
discontinued operations, highly inflationary accounting, cash flow hedges, Organic Sales Growth, +1 more
5 terms
discontinued operations financial
"the results of the IFP Business are reported as discontinued operations"
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.
highly inflationary accounting financial
"we adopted highly inflationary accounting for our subsidiaries in Argentina"
Highly inflationary accounting is the set of rules used when a company does business in an economy where prices are rising very rapidly, forcing its financial records to be updated so amounts reflect current purchasing power. For investors this matters because it changes reported revenue, profit, and debts to show a truer picture of performance and financial health—similar to updating an old household budget to today’s prices so comparisons over time are meaningful.
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.
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.
Adjusted Operating Profit financial
"Adjusted Operating Profit is a non-GAAP financial measure"
Adjusted operating profit is a measure of a company’s routine profit from its core business activities after removing one‑time events, unusual costs or non‑cash items so the result reflects ongoing operations. Think of it like judging a car’s normal fuel efficiency after ignoring a single visit to the body shop; investors use it to compare underlying profitability across periods or peers and to judge whether the business is sustainably earning money, but the specific exclusions can be subjective.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Kimberly-Clark (KMB) perform from continuing operations in Q2 2026?
Kimberly-Clark generated $4,189 million of net sales and $410 million of income from continuing operations in Q2 2026. Diluted EPS from continuing operations was $1.22, while adjusted EPS rose to $1.80, reflecting margin gains and cost savings.
What is the status and size of Kimberly-Clark (KMB)'s pending Kenvue acquisition?
Kimberly-Clark plans to acquire Kenvue with approximately 280 million shares of stock plus about $6.7 billion in cash. Shareholders of both firms approved the deal, key U.S. antitrust waiting periods expired, and closing remains subject to additional foreign regulatory approvals.
What are the key terms of Kimberly-Clark (KMB)'s IFP joint venture with Suzano?
Kimberly-Clark sold a 51% stake in its International Family Care and Professional business for about $1.3 billion in cash and retained a 49% equity interest initially valued near $1.2 billion. The business is treated as discontinued operations, with a joint venture structure and brand licensing.
How large is Kimberly-Clark (KMB)'s 2024 Transformation Initiative and what has been spent?
The 2024 Transformation Initiative is expected to cost about $1.5 billion pre-tax and deliver significant productivity savings. Through June 30, 2026, cumulative pre-tax charges were $913 million (about $706 million after tax), with the program extended through the end of 2028.
How did discontinued operations affect Kimberly-Clark (KMB)'s Q2 2026 earnings?
Discontinued operations, primarily the IFP Business, produced a $60 million loss in Q2 2026 versus $68 million income a year earlier. Results included $72 million of separation costs and $130 million of income tax expense tied to restructuring for the IFP transaction.
What macro challenges did Kimberly-Clark (KMB) highlight for Q2 2026?
Kimberly-Clark cited a China diaper social media disruption that materially reduced local diaper sales and profits, plus Middle East conflict driving higher energy-linked input costs. Management estimates about $150 million of incremental input costs for the rest of 2026 before mitigation actions.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended June 30, 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 July 28, 2026, there were 332,579,038 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 and Six Months Ended June 30, 2026 and 2025 | 1 | ||||
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2026 and 2025 | 2 | ||||
Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 | 3 | ||||
Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2026 and 2025 | 4 | ||||
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 | 6 | ||||
Notes to the Unaudited Interim Condensed Consolidated Financial Statements | 7 | ||||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 21 | ||||
Item 4. Controls and Procedures | 32 | ||||
PART II – OTHER INFORMATION | 33 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 33 | ||||
Item 5. Other Information | 33 | ||||
Item 6. Exhibits | 34 | ||||
Signatures | 35 | ||||
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||
| (In millions, except per share amounts) | 2026 | 2025 | 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 (Loss) 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 June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 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) | June 30, 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 June 30, 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 March 31, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
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 June 30, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 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 June 30, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
(a) Excludes redeemable interests' share.
4
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
| Three Months Ended June 30, 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 March 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 June 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 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 June 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
(a) Excludes redeemable interests' share.
See Notes to the Unaudited Interim Condensed Consolidated Financial Statements.
5
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six Months Ended June 30 | ||||||||||||||
| (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 proceeds | ||||||||||||||
| 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.
6
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, 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"). On July 1, 2026, subsequent to the quarter ended June 30, 2026, all consultation requirements and customary closing conditions set forth in the Purchase Agreement were satisfied and the IFP Transaction was completed. See Note 11 for further details.
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 June 30, 2026, K-C Argentina had an immaterial net peso monetary position. Net sales of K-C Argentina were approximately 1
7
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 June 30, 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.
During the second quarter of 2026, our Board of Directors approved an extension of the 2024 Transformation Initiative through the end of 2028. Total pre-tax costs are anticipated to be approximately $1.5 billion, with cash costs 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 June 30, 2026, cumulative pre-tax charges for the 2024 Transformation Initiative were $913 ($706 after-tax).
8
The following charges were incurred in connection with the 2024 Transformation Initiative:
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||
| 2026 | 2025 | 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 $45 and $101 for the three and six months ended June 30, 2026, respectively (IPC segment amount was not material); $58 and $71 to the NA and IPC segments, respectively, for the three months ended June 30, 2025; and $85 and $91 to the NA and IPC segments, respectively, for the six months ended June 30, 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 June 30, 2026 | $ | |||||||
9
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. On July 1, 2026, subsequent to the quarter ended June 30, 2026, all consultation requirements and customary closing conditions set forth in the Purchase Agreement were satisfied and the IFP Transaction was completed. See Note 11 for further details.
On June 26, 2026, Fampro Tissue Finance Co Limited (“Fampro”) entered into a facilities agreement (the “Facilities Agreement”) with FamPro Tissue Holdings B.V., as the original guarantor, Banco Bilbao Vizcaya Argentaria, S.A. New York Branch, Bank of America, N.A., London Branch, BNP Paribas and J.P. Morgan Securities plc, as mandated lead arrangers, bookrunners and global coordinators and the others lenders party thereto, that provides for (i) EUR 1,170 million of senior unsecured term loans (the “IFP Term Loan Facility”) and (ii) a EUR 260 million senior unsecured revolving credit facility (the “IFP Revolving Credit Facility”). The IFP Term Loan Facility matures in June 2031 and the IFP Revolving Credit Facility matures in June 2031 with two one-year extensions subject to consent of the lenders.
Borrowings under the IFP Term Loan Facility and the IFP Revolving Credit Facility will bear interest at a rate equal to EURIBOR (subject to a floor of 0.00 %) plus an applicable margin. The applicable margin for the IFP Term Loan Facility will range from 0.95 % to 1.90 % depending on our credit rating and is initially 1.15 %. The applicable margin for the IFP Revolving Credit Facility will range from 0.65 % to 1.6 % depending on credit rating and is initially 0.85 %.
On June 29, 2026, the Company borrowed approximately $1.3 billion under the IFP Term Loan Facility. In connection with the closing of the IFP Transaction, the obligations under the Facilities Agreement were transferred to the Joint Venture and as a result, the obligations are non-recourse to Kimberly-Clark.
Financial Information of Discontinued Operations
The following table presents the components of Income (Loss) from Discontinued Operations, Net of Income Taxes:
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Net Sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Cost of products sold | ||||||||||||||||||||||||||
| Gross Profit | ||||||||||||||||||||||||||
| Marketing, research and general expenses | ||||||||||||||||||||||||||
| Other (income) and expense, net | ||||||||||||||||||||||||||
| Operating Profit | ||||||||||||||||||||||||||
| Nonoperating expense | ||||||||||||||||||||||||||
| Income from discontinued operations before income taxes | ||||||||||||||||||||||||||
| Provision for income taxes | ( | ( | ( | ( | ||||||||||||||||||||||
| Income (Loss) from Discontinued Operations, Net of Income Taxes | $ | ( | $ | $ | $ | |||||||||||||||||||||
As a result of the IFP Transaction, we incurred separation costs of $72 and $104 for the three and six months ended June 30, 2026, respectively, and $33 for the three and six months ended June 30, 2025, 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 Provision for income taxes for the three and six months ended June 30, 2026 includes incremental net tax charges relating to the impacts from an intercompany intellectual property transaction and reorganization activities completed in connection with the IFP Transaction.
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The following table presents significant non-cash items and capital expenditures of discontinued operations:
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Depreciation and Amortization | $ | $ | $ | $ | ||||||||||||||||||||||
| Capital Spending | ||||||||||||||||||||||||||
The following table presents the components of assets and liabilities classified as discontinued operations:
| June 30, 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
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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 six months ended June 30, 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 June 30, 2026 and December 31, 2025, derivative assets were $135 and $81 , respectively, and derivative liabilities were $213 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.
12
Redeemable preferred securities of subsidiaries are measured on a recurring basis at their estimated redemption values, which approximate fair value. As of June 30, 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 June 30, 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 | ||||||||||||||||||||||||||||
| June 30, 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.
13
Note 6. Earnings Per Share
Basic and diluted earnings per share ("EPS") were calculated as follows:
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||
| (In millions, except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Income from Continuing Operations | $ | $ | $ | $ | ||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests | ( | ( | ( | ( | ||||||||||||||||||||||
| Income from Continuing Operations Attributable to Kimberly-Clark Corporation | ||||||||||||||||||||||||||
| Income (Loss) 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 2.4 1.1 332.6 million and 331.9 million, respectively.
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 six months ended June 30, 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.
14
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 June 30, 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 June 30, 2026 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||
(a) Included in Nonoperating expense as part of the computation of net periodic benefit costs.
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 June 30, 2026 and December 31, 2025, derivative assets were $135 and $81 , respectively, and derivative liabilities were $213 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. We also use derivative instruments, such as forward-starting swaps or treasury lock contracts, to manage our exposure to changes in benchmark interest rates associated with our anticipated issuance of fixed-rate debt. These derivative instruments are typically designated as cash flow hedges.
15
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 June 30, 2026, the aggregate notional values and carrying values of debt subject to outstanding interest rate contracts designated as fair value hedges were $325 and $304 , respectively. For the three and six months ended June 30, 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.
Foreign Exchange and Commodity Contracts
As of June 30, 2026, the aggregate notional value of outstanding foreign exchange and commodity derivative contracts designated as cash flow hedges was $2.1 billion. Unrealized losses of $17 and $124 were recorded in AOCI for the three months ended June 30, 2026 and 2025, respectively. Unrealized gains of $20 and unrealized losses of $144 were recorded in AOCI for the six months ended June 30, 2026 and 2025, respectively. Losses of $15 and $11 for the three months ended June 30, 2026 and 2025, respectively, and losses of $44 and $17 for the six months ended June 30, 2026 and 2025, respectively, were reclassified from AOCI to Income (Loss) from Discontinued Operations, Net of Income Taxes (discussed further below), Other (income) and expense, net and Cost of products sold.
For the three and six months ended June 30, 2026, no material gains or losses were reclassified from AOCI into earnings as a result of the discontinuance of cash flow hedge accounting. For the three and six months ended June 30, 2025, we discontinued cash flow hedge accounting for certain foreign exchange and commodity instruments with a notional value of $681 because the forecasted transactions were no longer probable of occurring due to the IFP Transaction. As a result, pre-tax losses of $20 were reclassified from AOCI into Income (Loss) from Discontinued Operations, Net of Income Taxes. The maximum maturity of foreign exchange and commodity derivative contracts in place as of June 30, 2026 is May 2029.
Forward-Starting Interest Rate Swap Contracts
In the second quarter of 2026, we entered into $4.3 billion of aggregate notional forward-starting interest rate swaps in anticipation of the issuance of fixed-rate debt in connection with the Kenvue Acquisition. The gains or losses initially recorded in AOCI will be amortized and recorded in Interest expense over the term of the hedged debt. Unrealized losses of $24
As of June 30, 2026, losses associated with our cash flow hedges expected to be reclassified from AOCI into Interest expense, Cost of products sold or Other (income) and expense, net during the next twelve months are $2 .
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 June 30, 2026, the aggregate notional value of these instruments was $1.8 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. Unrealized losses of $12 and $128 were recorded in AOCI for the three months ended June 30, 2026 and 2025, respectively. Unrealized gains of $15 and unrealized losses of $148 were recorded in AOCI for the six months
16
ended June 30, 2026 and 2025, respectively. For the three and six months ended June 30, 2026 and 2025, no material amounts were reclassified from AOCI to Interest expense.
For the three and six months ended June 30, 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. Gains of $0 and $38 were recorded for the three months ended June 30, 2026 and 2025, respectively. Losses of $3 and gains of $62 were recorded for the six months ended June 30, 2026 and 2025, 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 June 30, 2026, the notional amount of these undesignated derivative instruments was approximately $5.4 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.
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.
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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 June 30, 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 | $ | |||||||||||||||||||
| Six Months Ended June 30, 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 June 30, 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.
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| Six Months Ended June 30, 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.
Depreciation and amortization expense by segment:
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||
| 2026 | 2025 | 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 June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| NA | $ | $ | $ | $ | ||||||||||||||||||||||
| IPC | ||||||||||||||||||||||||||
| Total Segment Capital Spending | ||||||||||||||||||||||||||
| Corporate & Other | ||||||||||||||||||||||||||
Total(a) | $ | $ | $ | $ | ||||||||||||||||||||||
Sales of Principal Products:
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Baby and Child Care | $ | $ | $ | $ | ||||||||||||||||||||||
| Family Care | ||||||||||||||||||||||||||
| Professional | ||||||||||||||||||||||||||
| Adult Care | ||||||||||||||||||||||||||
| Feminine Care | ||||||||||||||||||||||||||
| All other | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
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Note 10. Supplemental Balance Sheet Data
The following schedule presents a summary of inventories by major class:
| June 30, 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.
The following schedule presents a summary of property, plant and equipment, net:
| June 30, 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 $1.1 billion as of June 30, 2026 and December 31, 2025, of which $186 and $184 , respectively, are reported as discontinued operations. Amounts are recorded within Trade accounts payable and Current liabilities of discontinued operations.
Note 11. Subsequent Events
On July 1, 2026, all consultation requirements and customary closing conditions set forth in the Purchase Agreement were satisfied and the IFP Transaction was completed for a cash purchase price of approximately $1.3 billion, subject to certain post-closing adjustments. A portion of the cash proceeds is expected to be attributed to a long-term license granted to the Joint Venture for the use of certain of Kimberly-Clark’s global brands, patents, and know-how in manufacturing. We also retained a 49 % equity interest in the Joint Venture, with an initial estimated fair value of approximately $1.2 billion.
Based on preliminary estimates, we expect to recognize a pre-tax gain of more than $1.0 billion within our results from discontinued operations in the third quarter of 2026.
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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 and six months ended June 30, 2026 to the same periods 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 countries and territories. Our products are sold under well-known brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend.
China Diapers Social Media Disruption
During the second quarter of 2026, false allegations regarding the quality of certain diaper brands in the China market emerged and were carried across social media channels. Independent testing conducted by a government-certified third party confirmed the quality and safety of our products, refuting the false allegations. While we are effectively navigating the situation, the impact from the spread of false claims across social media significantly impacted our diaper sales in China in the second quarter of 2026 and is expected to further impact sales and profits in the near term.
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 the current market environment and assuming oil prices remain at current levels for the remainder of the year, we estimate incremental input costs of approximately $150 (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.
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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 and six months ended June 30, 2026, we incurred $109 and $157, respectively, 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, 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 (the "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. On July 1, 2026, subsequent to the quarter ended June 30, 2026, all consultation requirements and customary closing conditions set forth in the Purchase Agreement were satisfied and the IFP Transaction was completed. See Item 1, Note 1, Note 3 and Note 11 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.
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. During the second quarter of 2026, our Board of Directors approved an extension of the 2024 Transformation Initiative through the end of 2028. 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 pre-tax costs are anticipated to be approximately $1.5 billion, with cash costs expected to be approximately
22
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 June 30, 2026 and 2025, total 2024 Transformation Initiative charges were $54 pre-tax ($40 after-tax) and $122 pre-tax ($95 after-tax), respectively. For the six months ended June 30, 2026 and 2025, total 2024 Transformation Initiative charges were $105 pre-tax ($72 after-tax), and $199 pre-tax ($172 after-tax), respectively. Through June 30, 2026, cumulative pre-tax charges for the 2024 Transformation Initiative were $913 ($706 after-tax), and approximately 95% 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 June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||||||
| Net Sales | $ | 4,189 | $ | 4,163 | 0.6 | % | $ | 8,352 | $ | 8,217 | 1.6 | % | ||||||||||||||||||||||||||
| Gross Profit | 1,603 | 1,456 | 10.1 | % | 3,137 | 2,965 | 5.8 | % | ||||||||||||||||||||||||||||||
| Operating Profit | 633 | 592 | 6.9 | % | 1,386 | 1,223 | 13.3 | % | ||||||||||||||||||||||||||||||
| Provision for income taxes | (217) | (116) | 87.1 | % | (381) | (247) | 54.3 | % | ||||||||||||||||||||||||||||||
| Income from Continuing Operations | 410 | 444 | (7.7) | % | 984 | 914 | 7.7 | % | ||||||||||||||||||||||||||||||
| Income (Loss) from Discontinued Operations, Net of Income Taxes | (60) | 68 | (188.2) | % | 41 | 171 | (76.0) | % | ||||||||||||||||||||||||||||||
| Net Income Attributable to Kimberly-Clark Corporation | 345 | 509 | (32.2) | % | 1,010 | 1,076 | (6.1) | % | ||||||||||||||||||||||||||||||
| Diluted Earnings per Share from Continuing Operations | 1.22 | 1.33 | (8.3) | % | 2.91 | 2.72 | 7.0 | % | ||||||||||||||||||||||||||||||
| Diluted Earnings per Share from Discontinued Operations | (0.18) | 0.20 | (190.0) | % | 0.12 | 0.51 | (76.5) | % | ||||||||||||||||||||||||||||||
Adjusted Results - Continuing Operations
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||||||
Adjusted Gross Profit(a) | $ | 1,625 | $ | 1,538 | 5.7 | % | $ | 3,201 | $ | 3,100 | 3.3 | % | ||||||||||||||||||||||||||
Adjusted Operating Profit(a) | 757 | 713 | 6.2 | % | 1,489 | 1,419 | 4.9 | % | ||||||||||||||||||||||||||||||
Adjusted Earnings per Share(a) | 1.80 | 1.63 | 10.4 | % | 3.40 | 3.25 | 4.6 | % | ||||||||||||||||||||||||||||||
Adjusted Effective Tax Rate(a) | 21.1 | % | 20.9 | % | 0.2 | % | 23.6 | % | 20.8 | % | 2.8 | % | ||||||||||||||||||||||||||
(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.
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 | (0.1) | 0.4 | (0.5) | (0.4) | 1.1 | 0.6 | (0.1) | |||||||||||||||||||||||||||||||||||||
| Six Months Ended | 1.3 | 0.4 | (0.5) | (1.1) | 1.5 | 1.6 | 1.2 | |||||||||||||||||||||||||||||||||||||
(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.
23
Net sales of $4.2 billion for the three months ended June 30, 2026 increased 0.6% primarily driven by favorable currency impacts, while organic sales growth was relatively flat compared to the prior year, including an approximately 50 basis point negative impact from the China social media disruption.
Net sales of $8.4 billion for the six months ended June 30, 2026 increased 1.6% primarily driven by organic sales growth and favorable currency impacts, partially offset by divestitures and business exits. Organic sales increased 1.2% primarily from volume gains of 1.3%.
Gross and Operating Profits
Gross profit of $1.6 billion for the three months ended June 30, 2026 increased 10.1%, while gross margin of 38.3% increased 330 basis points. Gross margin in the current and prior year included approximately 50 basis points and 200 basis points, respectively, of charges related to the 2024 Transformation Initiative, primarily for incremental depreciation expense and asset write-offs. Excluding these charges, adjusted gross margin increased 190 basis points to 38.8%. The increase was primarily due to one-time tariff refunds and gross productivity savings from integrated margin management of approximately $120, partially offset by unfavorable pricing net of cost inflation.
Gross profit of $3.1 billion for the six months ended June 30, 2026 increased 5.8%, while gross margin of 37.6% increased 150 basis points. Gross margin in the current and prior year included approximately 80 basis points and 160 basis points, respectively, of charges related to the 2024 Transformation Initiative, primarily for incremental depreciation expense and asset write-offs. Excluding these charges, adjusted gross margin increased 60 basis points to 38.3%. The increase was primarily due to one-time tariff refunds and gross productivity savings from integrated margin management of approximately $235, partially offset by supply chain related investments and unfavorable pricing net of cost inflation.
Operating profit for the three months ended June 30, 2026 was $633 compared to $592 in the prior year. Results included charges related to the 2024 Transformation Initiative of $54 and $121 for the three months ended June 30, 2026 and 2025, respectively. Results in current quarter also included charges of $109 related to the Kenvue Acquisition, and a benefit of $39 related to Brazil business tax credits.
Operating profit for the six months ended June 30, 2026 was $1.4 billion compared to $1.2 billion in the prior year. Results included charges related to the 2024 Transformation Initiative of $105 and $196 for the six months ended June 30, 2026 and 2025, respectively. Results in the current year also included charges of $157 related to the Kenvue Acquisition, a benefit of $120 related to the settlement of insurance claims from a previous acquisition and a benefit of $39 related to Brazil business tax credits.
Excluding these items, adjusted operating profit for the three and six months ended June 30, 2026 was $757 and $1.5 billion, respectively, compared to $713 and $1.4 billion in the prior year.
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 | (3.0) | (2.8) | — | 14.2 | 1.2 | (3.4) | 6.2 | |||||||||||||||||||||||||||||||||||||
| Six Months Ended | (1.3) | (2.9) | (2.3) | 9.5 | 1.9 | — | 4.9 | |||||||||||||||||||||||||||||||||||||
(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 and six months ended June 30, 2026 increased 6.2% and 4.9%, respectively, driven by the increase in adjusted gross profit discussed above and favorable currency impacts. These gains were partially offset by impacts of approximately 210 basis points and 340 basis points for the three and six months ended June 30, 2026, respectively, from a combination of business exits and the China social media disruption.
Income from Continuing Operations
Income from Continuing Operations for the three months ended June 30, 2026 was $410 compared to $444 in the prior year, as the increase in operating profit drivers discussed above was more than offset by higher income tax expense.
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Income from Continuing Operations for the six months ended June 30, 2026 was $984 compared to $914 in the prior year, as the increase in operating profit drivers discussed above, coupled with higher income from equity companies, was partially offset by higher income tax expense.
Our share of net income of equity companies for the three and six months ended June 30, 2026 was $55 and $108, respectively, compared to $47 and $91 in the prior year. The increases for each period were primarily due to favorable currency impacts and pricing net of cost inflation, partially offset by higher general and administrative expenses.
The effective tax rate for the three and six months ended June 30, 2026 was 37.9% and 30.3%, respectively, compared to 22.6% and 23.1% in the prior year. The adjusted effective tax rate for the three and six months ended June 30, 2026 was 21.1% and 23.6%, respectively, compared to 20.9% and 20.8% in the prior year. The increase was driven by the lapping of benefits from the resolution of certain tax matters in the first half of 2025.
Diluted earnings per share for the three months ended June 30, 2026 were $1.22 compared to $1.33 in the prior year, reflective of the decrease in income from continuing operations discussed above. Adjusted diluted earnings per share for the three months ended June 30, 2026 were $1.80, representing a 10.4% increase compared to the prior year, primarily driven by higher adjusted operating profit, lower net interest expense and higher income from equity companies.
Diluted earnings per share for the six months ended June 30, 2026 were $2.91 compared to $2.72 in the prior year, reflective of the increase in income from continuing operations discussed above. Adjusted diluted earnings per share for the six months ended June 30, 2026 were $3.40, representing a 4.6% increase compared to the prior year, driven by higher adjusted operating profit, lower net interest expense and higher income from equity companies, partially offset by a higher adjusted effective tax rate.
Income (Loss) from Discontinued Operations, Net of Income Taxes
Income (loss) from discontinued operations, net of income taxes for the three and six months ended June 30, 2026 was $(60) and $41, respectively, compared to $68 and $171 in the prior year. The decrease was driven by pre-tax separation costs of $72 and $104 for the three and six months ended June 30, 2026, respectively, compared to $33 in the prior year. Current year results also included net tax charges of $107 million related to the impacts from certain reorganization activities associated with the IFP Transaction. The incremental charges in the current year were partially offset by lower depreciation expense due to reporting requirements for discontinued operations.
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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 | (0.3) | 0.2 | (0.7) | (0.5) | 0.1 | (1.2) | (0.7) | |||||||||||||||||||||||||||||||||||||
| IPC | 0.3 | 0.9 | (0.2) | (0.1) | 3.1 | 4.0 | 1.0 | |||||||||||||||||||||||||||||||||||||
| Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| NA | 0.8 | — | (0.3) | (1.6) | 0.2 | (0.9) | 0.5 | |||||||||||||||||||||||||||||||||||||
| IPC | 2.2 | 1.2 | (0.8) | — | 4.1 | 6.5 | 2.5 | |||||||||||||||||||||||||||||||||||||
| Percent Change in Segment Operating Profit | Volume | Net Price | Input Costs | Other Manufacturing Costs(d) | Currency Translation | Other(e) | Total | |||||||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| NA | (2.9) | (2.7) | 3.4 | 13.1 | 0.1 | (0.3) | 10.7 | |||||||||||||||||||||||||||||||||||||
| IPC | (1.3) | (1.4) | (12.0) | 13.1 | 4.6 | (0.8) | 2.2 | |||||||||||||||||||||||||||||||||||||
| Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| NA | (2.2) | (1.3) | 0.5 | 6.3 | 0.2 | (2.4) | 1.1 | |||||||||||||||||||||||||||||||||||||
| IPC | 2.8 | (6.2) | (10.2) | 14.2 | 6.2 | 5.7 | 12.5 | |||||||||||||||||||||||||||||||||||||
(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.
(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 June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||||||
| Net Sales | $ | 2,698 | $ | 2,730 | (1.2) | % | $ | 5,349 | $ | 5,398 | (0.9) | % | ||||||||||||||||||||||||||
| Operating Profit | 725 | 655 | 10.7 | % | 1,348 | 1,333 | 1.1 | % | ||||||||||||||||||||||||||||||
Net sales of $2.7 billion for the three months ended June 30, 2026 decreased 1.2% driven by the exit of the private label diaper business in the US and a decrease in organic sales. Organic sales decreased 0.7%, primarily driven by changes in retail inventories of 1.0% and impacts from the fire at our Los Angeles distribution center of 0.8%. Net sales of $5.3 billion for the six months ended June 30, 2026 decreased 0.9%, as the exit of the private label diaper business in the US was partially offset by organic sales growth. Organic sales increased 0.5% driven by volume gains of 0.8%, primarily in Consumer Tissue and Professional categories, partially offset by lower pricing to drive sales of new product.
Operating profit for the three and six months ended June 30, 2026 of $725 and $1.3 billion increased 10.7% and 1.1%, respectively, driven by one-time tariff refunds and gross productivity savings, partially offset by impacts from business exits of 110 basis points and 310 basis points for the three and six months ended June 30, 2026, respectively, and incremental advertising spend.
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International Personal Care
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||||||
| Net Sales | $ | 1,491 | $ | 1,433 | 4.0 | % | $ | 3,003 | $ | 2,819 | 6.5 | % | ||||||||||||||||||||||||||
| Operating Profit | 186 | 182 | 2.2 | % | 431 | 383 | 12.5 | % | ||||||||||||||||||||||||||||||
Net sales of $1.5 billion for the three months ended June 30, 2026 increased 4.0% primarily driven by favorable currency impacts of 3.1% and organic sales growth of 1.0%. Organic sales growth, which included a 140 basis point headwind from the China social media disruption, was driven by volume plus mix gains of 1.2%, reflecting growth within multiple categories, namely diapers and pants. Net sales of $3.0 billion for the six months ended June 30, 2026 increased 6.5%, primarily driven by favorable currency impacts of 4.1% and organic sales growth of 2.5%. Organic sales growth was driven by volume and mix gains of 2.2% and 1.2%, respectively, partially offset by lower pricing.
Operating profit for the three and six months ended June 30, 2026 of $186 and $431, increased 2.2% and 12.5%, respectively. The increase for the three months ended June 30, 2026 was primarily driven by gross productivity savings and favorable currency impacts, partially offset by a 440 basis point impact from the China social media disruption. The increase for the six months ended June 30, 2026 was driven by gross productivity savings, favorable currency impacts and volume and mix led net sales growth, partially offset by unfavorable pricing net of cost inflation and supply chain related investments.
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 $1.7 billion during the six months ended June 30, 2026 compared to $1.1 billion 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 timing and lower incentive payments in the current year.
Investing
Cash used for investing was $765 during the six months ended June 30, 2026 compared to $312 in the prior year, primarily reflecting higher planned capital spending. During the six months ended June 30, 2026, our capital spending was $776 compared to $401 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 $222 during the six months ended June 30, 2026 compared to $1.2 billion in the prior year. This decrease was primarily due to debt proceeds of $1.3 billion related to the IFP Term Loan Facility (see Item 1, Note 3 to the Unaudited Interim Condensed Consolidated Financial Statements for details), a portion of which were used to repay our U.S. commercial paper facilities. During the six months ended June 30, 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 $31 as of June 30, 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 six months ended June 30, 2026 was $652. 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.
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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.
As of June 30, 2026 and December 31, 2025, total debt from continuing operations was $6.5 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 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 IFP Transaction (including risks related to the incurrence of significant transaction and separation costs, adverse market reactions, regulatory or legal challenges, and operational disruptions), risks that we are not able to realize the anticipated benefits of the 2024 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
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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 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.
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•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.
•Brazil Business Tax Credits - Favorable legal ruling resolving certain matters related to prior years' business taxes in Brazil.
•Insurance Recovery - Settlement of insurance claims related to a previous acquisition.
•IFP Repatriated Earnings - In connection with the IFP Transaction, we recognized deferred tax liabilities for certain permanently reinvested earnings from the IFP Business that are expected to be repatriated.
The following tables provide a reconciliation of Organic Sales Growth from continuing operations:
| Three Months Ended June 30, 2026 | ||||||||||||||||||||
| Percent change vs. the prior year period | ||||||||||||||||||||
| NA | IPC | Total | ||||||||||||||||||
| Net Sales Growth | (1.2) | 4.0 | 0.6 | |||||||||||||||||
| Currency Translation | (0.1) | (3.1) | (1.1) | |||||||||||||||||
| Divestitures and Business Exits | 0.5 | 0.1 | 0.4 | |||||||||||||||||
Organic Sales Growth(a) | (0.7) | 1.0 | (0.1) | |||||||||||||||||
| Six Months Ended June 30, 2026 | ||||||||||||||||||||
| Percent change vs. the prior year period | ||||||||||||||||||||
| NA | IPC | Total | ||||||||||||||||||
| Net Sales Growth | (0.9) | 6.5 | 1.6 | |||||||||||||||||
| Currency Translation | (0.2) | (4.1) | (1.5) | |||||||||||||||||
| Divestitures and Business Exits | 1.6 | — | 1.1 | |||||||||||||||||
Organic Sales Growth(a) | 0.5 | 2.5 | 1.2 | |||||||||||||||||
(a) Table may not foot due to rounding.
The following table provides a reconciliation of Adjusted Gross Profit from continuing operations:
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Gross Profit | $ | 1,603 | $ | 1,456 | $ | 3,137 | $ | 2,965 | ||||||||||||||||||
| 2024 Transformation Initiative | 22 | 82 | 64 | 135 | ||||||||||||||||||||||
| Adjusted Gross Profit | $ | 1,625 | $ | 1,538 | $ | 3,201 | $ | 3,100 | ||||||||||||||||||
The following table provides a reconciliation of Adjusted Operating Profit from continuing operations:
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Operating Profit | $ | 633 | $ | 592 | $ | 1,386 | $ | 1,223 | ||||||||||||||||||
| 2024 Transformation Initiative | 54 | 121 | 105 | 196 | ||||||||||||||||||||||
| Kenvue Acquisition | 109 | — | 157 | — | ||||||||||||||||||||||
| Brazil Business Tax Credits | (39) | — | (39) | — | ||||||||||||||||||||||
| Insurance Recovery | — | — | (120) | — | ||||||||||||||||||||||
| Adjusted Operating Profit | $ | 757 | $ | 713 | $ | 1,489 | $ | 1,419 | ||||||||||||||||||
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The following table provides a reconciliation of Adjusted Earnings per Share from continuing operations:
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Diluted Earnings per Share | $ | 1.22 | $ | 1.33 | $ | 2.91 | $ | 2.72 | ||||||||||||||||||
| 2024 Transformation Initiative | 0.12 | 0.27 | 0.22 | 0.50 | ||||||||||||||||||||||
| Kenvue Acquisition | 0.30 | — | 0.43 | — | ||||||||||||||||||||||
| Brazil Business Tax Credits | (0.10) | — | (0.10) | — | ||||||||||||||||||||||
| Insurance Recovery | — | — | (0.32) | — | ||||||||||||||||||||||
| IFP Repatriated Earnings | 0.26 | 0.03 | 0.26 | 0.03 | ||||||||||||||||||||||
Adjusted Earnings per Share(a) | $ | 1.80 | $ | 1.63 | $ | 3.40 | $ | 3.25 | ||||||||||||||||||
(a) The non-GAAP adjustments included above are presented net of tax. The income tax effect of these non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable 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 tables provide a reconciliation of the continuing operations Adjusted Effective Tax Rate:
| Three Months Ended June 30 | ||||||||||||||||||||||||||
| 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 | $ | 572 | $ | (217) | $ | 513 | $ | (116) | ||||||||||||||||||
| 2024 Transformation Initiative | 54 | (14) | 122 | (27) | ||||||||||||||||||||||
| Kenvue Acquisition | 109 | (10) | — | — | ||||||||||||||||||||||
| Brazil Business Tax Credits | (39) | 7 | — | — | ||||||||||||||||||||||
| IFP Repatriated Earnings | — | 87 | — | 10 | ||||||||||||||||||||||
| As Adjusted | $ | 696 | $ | (147) | $ | 635 | $ | (133) | ||||||||||||||||||
| Effective Tax Rate | ||||||||||||||||||||||||||
| As Reported | 37.9 | % | 22.6 | % | ||||||||||||||||||||||
| As Adjusted | 21.1 | % | 20.9 | % | ||||||||||||||||||||||
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| Six Months Ended June 30 | ||||||||||||||||||||||||||
| 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 | $ | 1,257 | $ | (381) | $ | 1,070 | $ | (247) | ||||||||||||||||||
| 2024 Transformation Initiative | 105 | (33) | 199 | (27) | ||||||||||||||||||||||
| Kenvue Acquisition | 157 | (15) | — | — | ||||||||||||||||||||||
| Brazil Business Tax Credits | (39) | 7 | — | — | ||||||||||||||||||||||
| Insurance Recovery | (120) | 14 | — | — | ||||||||||||||||||||||
| IFP Repatriated Earnings | — | 87 | — | 10 | ||||||||||||||||||||||
| As Adjusted | $ | 1,360 | $ | (321) | $ | 1,269 | $ | (264) | ||||||||||||||||||
| Effective Tax Rate | ||||||||||||||||||||||||||
| As Reported | 30.3 | % | 23.1 | % | ||||||||||||||||||||||
| As Adjusted | 23.6 | % | 20.8 | % | ||||||||||||||||||||||
Item 4. Controls and Procedures
As of June 30, 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 June 30, 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 June 30, 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 June 30, 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 June 30, 2026, no such plans or other arrangements were adopted terminated
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Item 6. Exhibits
(a)Exhibits
Exhibit No. (10)q. Form of Award Agreements under 2021 Equity Participation Plan for Performance Restricted Stock Units, filed herewith.
Exhibit No. (10)r. Form of Award Agreements under 2021 Equity Participation Plan for Off-Cycle Time-Vested Restricted Stock Units, filed herewith.
Exhibit No. (10)t. Form of Award Agreements under 2021 Equity Participation Plan for Annual Time-Vested Restricted Stock Units, filed herewith.
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/ Nelson Urdaneta | |||||||
| Nelson Urdaneta | ||||||||
| Senior Vice President and Chief Financial Officer | ||||||||
| (Principal Financial and Accounting Officer) | ||||||||
August 4, 2026
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