Kimberly-Clark (KMB) Q3 2026 (Q&A) earnings summary

Executive summary

• Q3 net sales were $4.1B, down 0.4%; organic sales fell 1.3%, including a ~270 bps China social-media disruption headwind and North American retailer inventory pressure.

• Adjusted operating profit declined 0.9% to $677M; adjusted continuing-operations EPS rose 17.2% to $1.70, while adjusted EPS attributable to Kimberly-Clark fell 6.6% to $1.70.

• Kenvue acquisition closed November 2, 2026; integration is phased across first-100-day execution, establishing a foundation in 2027, then pursuing longer-term growth.

Financial highlights

• Q3 adjusted gross margin was 35.5%, down 130 bps; pricing net of cost inflation and supply-chain investment pressured results, partly offset by productivity.

• 9M organic sales grew 0.3%; adjusted operating profit increased 3.0% to $2.166B and adjusted continuing-operations EPS rose 8.5% to $5.10.

• 9M adjusted free cash flow was $1.398B versus $1.263B; cash provided by operations, including discontinued operations, was $2.4B versus $1.8B.

• Q3 net income was $1.8B versus $454M, primarily reflecting discontinued-operations income of $1.4B, including the IFP transaction gain.

Outlook and guidance

• FY26 standalone outlook targets mid-single-digit constant-currency adjusted operating profit growth, high-single-digit adjusted continuing-operations EPS growth, and a low-single-digit decline in adjusted EPS attributable to Kimberly-Clark.

• FY26 organic sales growth is expected to be ~100 bps below weighted-average market growth of ~1.7%; China disruption accounts for ~100 bps of total-company impact.

• Adjusted free cash flow is expected to be ~$2B; capital expenditures ~$1.3B and adjusted tax rate ~23%.

• FY27 adjusted EPS dilution is expected to be no more than mid-single digit versus standalone results; mid- to high-single-digit EPS CAGR is expected by year two of integration.

• Deal accretion and ~2x leverage remain targeted by the end of the transaction’s second year; FY27 priorities include synergies, strengthening legacy businesses and targeted growth investment.