Kimberly-Clark (KMB) Q1 2026 Prepared Remarks earnings summary

Executive summary

• Net sales for Q1 2026 reached $4.2 billion, up 2.7% year-over-year, driven by 2.5% organic growth and strong volume-plus-mix gains, despite business exits and a challenging environment.

• Adjusted operating profit rose 3.7% to $732 million, with stable earnings, margin expansion, and strong cash generation supported by productivity and innovation.

• Diluted EPS from continuing operations was $1.70, up 22.3%; adjusted EPS was $1.60, down 1.2% due to a higher tax rate.

• Progress continues on the Kenvue acquisition and IFP joint venture, both on track for 2026 completion, with synergy and leadership plans in place.

• Transformation initiatives and innovation remain key drivers for sustainable, profitable growth.

Financial highlights

• Adjusted operating profit up 3.7% year-over-year to $732 million; adjusted EPS from continuing operations down 1.2%, while adjusted EPS attributable to shareholders rose 2.1%.

• Gross profit for Q1 2026 was $1.53 billion, with gross margin at 36.8% and adjusted gross margin at 37.9%, down 60 basis points year-over-year.

• Adjusted free cash flow was $405 million in Q1, with cash provided by operations at $745 million, more than double the prior year.

• Capital spending increased to $424 million, with full-year guidance at $1.3 billion.

• Total debt stood at $7.1 billion as of March 31, 2026.

Outlook and guidance

• 2026 organic sales growth expected to be in line with or ahead of category averages (~2.5%), with mid- to high-single digit adjusted operating profit growth and double-digit adjusted EPS growth from continuing operations on a constant-currency basis.

• Full-year capital spending expected to be $1.3 billion, including transformation-related investments.

• Guidance excludes impact from Kenvue acquisition closure before year-end.

• Reported net sales to reflect a 50 bps negative impact from US private label diaper exit and a 50 bps positive impact from currency.

• Transformation Initiative targets $3.0 billion in gross productivity savings and $200 million in SG&A savings by end of 2026.