Kimberly-Clark (KMB) Q3 2026 Prepared Remarks earnings summary

Executive summary

• Q3 net sales were $4.134B, down 0.4% YoY; organic sales fell 1.3%, with China disruption and North American retailer inventory movements weighing on results.

• Adjusted EPS from continuing operations rose 17.2% to $1.70; adjusted EPS attributable to shareholders declined 6.6%, partly reflecting the IFP divestiture.

• Kenvue acquisition closed Nov. 2, 2026; integration is focused on growth, efficiencies, synergies and deleveraging.

Financial highlights

• Q3 adjusted operating profit was $677M versus $683M, down 0.9%; adjusted gross margin fell 130 bps to 35.5%.

• Q3 continuing-operations net income was $405M versus $344M; diluted EPS was $1.19 versus $1.01.

• Q3 adjusted operating profit excluded $106M of Kenvue-related costs and $55M of transformation charges.

• Nine-month organic sales grew 0.3%; adjusted operating profit was $2.166B versus $2.102B, and adjusted continuing-operations EPS was $5.10 versus $4.70.

• Nine-month adjusted free cash flow was $1.398B; cash from operations was $2.408B and capital expenditures were $1.039B.

Outlook and guidance

• Standalone 2026 organic sales growth is expected to be ~100 bps below weighted-average category growth of ~1.7%.

• Constant-currency adjusted operating profit growth is expected in the mid-single digits and continuing-operations adjusted EPS growth in the high-single digits; attributable adjusted EPS is expected to decline at a low-single-digit rate.

• Standalone adjusted free cash flow target is ~$2B; capital expenditures are expected to be ~$1.3B.

• Kenvue-related EPS dilution is expected to be no more than mid-single digits in 2027, followed by double-digit growth in 2028 and a return to the long-term earnings algorithm by integration Year 2.

• Integration targets include $1.9B of cost synergies within three years and $1.4B of revenue synergies within four years.