Kimberly-Clark (KMB) Q1 2026 (Q&A) earnings summary

Executive summary

• Net sales for Q1 2026 were $4.2 billion, up 2.7% year-over-year, with organic sales growth of 2.5% driven by strong volume, innovation, and productivity, despite macroeconomic uncertainty.

• Adjusted operating profit grew 3.7% year-over-year to $732 million, with broad-based volume gains and stable global market share.

• Income from continuing operations increased 22.1% to $574 million; diluted EPS from continuing operations was $1.70, up 22.3%.

• Company reaffirmed its 2026 outlook, highlighting upcoming product launches and the pending Kenvue acquisition and IFP joint venture, with regulatory and operational readiness advancing.

• Continued execution of transformation and innovation strategies, with significant charges and insurance recoveries impacting results.

Financial highlights

• Gross margin was 36.8%, with adjusted gross margin at 37.9%, down 60 bps year-over-year.

• Adjusted EPS from continuing operations was $1.60, down 1.2% year-over-year; adjusted EPS attributable to the company was $1.97, up 2.1%.

• Cash provided by operations was $745 million, more than double the prior year, driven by insurance recovery and improved working capital.

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

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

Outlook and guidance

• 2026 organic sales growth expected to match or exceed category averages (~2.5%), with mid- to high-single-digit constant-currency adjusted operating profit growth and double-digit adjusted EPS growth from continuing operations.

• Adjusted free cash flow projected at ~$2B, with capital expenditures accelerating to ~$1.3B.

• Currency translation expected to favorably impact EPS by ~170 bps.

• Management expects continued input cost pressures due to geopolitical conflicts and energy price volatility.

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