Kimberly-Clark Corporation

What they do

Kimberly-Clark manufactures and markets products made from natural and synthetic fibers using nonwovens and absorbency technologies, with manufacturing facilities in 30 countries including equity affiliates. Its brand portfolio includes Huggies, Kleenex, Scott, Kotex, Cottonelle, Poise, Depend, Andrex, Pull-Ups, GoodNites, Intimus, Plenitud, Sweety, Softex, Viva and WypAll, which hold No. 1 or No. 2 share positions in approximately 70 countries across Baby & Child Care, Adult Care, Feminine Care, Family Care and Professional categories. Following the IFP Transaction, continuing operations are reported in two segments defined by geography.

Revenue drivers

• Baby & Child Care — Diapers, training and youth pants sold under Huggies, Pull-Ups and GoodNites; a core daily-need category and the line most visibly affected by the second-quarter 2026 China social media disruption.
• Adult Care and Feminine Care — Incontinence and feminine hygiene products under Depend, Poise, Kotex, Intimus, Plenitud, Sweety and Softex, positioned across the value spectrum in developed and emerging markets.
• Family Care and Professional — Tissue and towel brands such as Kleenex, Scott, Cottonelle and Viva plus Professional brands including WypAll; the former international portions of these businesses moved into the Suzano joint venture.
• Geographic segments — After the IFP Transaction, continuing operations are organized into two reportable segments defined by geography, with net sales of $4.2 billion in the second quarter of 2026.

Recent performance

Second quarter 2026 net sales were $4.2 billion, up 0.6 percent, as favorable currency of 1.1 percent was partially offset by the exit of the US private label diaper business; organic sales were broadly flat including an approximately 50 basis point hit from the China social media disruption. Gross margin was 38.3 percent versus 35.0 percent a year earlier, and adjusted gross margin of 38.8 percent rose 190 basis points on one-time tariff refunds and productivity savings. Operating profit was $633 million versus $592 million, and adjusted operating profit of $757 million rose 6.2 percent. Adjusted EPS from continuing operations was $1.80, up 10.4 percent, and adjusted EPS attributable to Kimberly-Clark was $2.12. Full-year 2025 revenue was $16.45 billion with net income of $2.02 billion and diluted EPS of $6.07.

Strategy

Management is executing the Powering Care strategy around three pillars: accelerate pioneering innovation, optimize the margin structure, and wire the organization for growth. The margin pillar is driven by supply chain transformation in value stream simplification, network optimization and scalable automation. Portfolio actions include the pending Kenvue acquisition announced November 2, 2025 and the Suzano joint venture launched in 2026, alongside construction of an alternative natural fibers pilot plant in the Southwest United States. Capital allocation prioritizes growth investment, a growing dividend, value-accretive acquisitions and share repurchases.

Risks

• China diaper demand disruption — False social media allegations about diaper quality significantly reduced China diaper sales in the second quarter of 2026 and are expected to further impact sales and profits in the near term.
• Raw material and energy costs — Pulp, petroleum-derived materials, energy and transportation costs are volatile, and Middle East conflict is estimated to add roughly $150 million of incremental input costs in the remainder of 2026 before mitigation.
• Kenvue acquisition execution — The pending deal requires approximately 280 million shares issued and about $6.7 billion of cash funded from cash on hand, new debt and IFP Transaction proceeds, with $157 million of acquisition-related costs incurred in the first half of 2026.
• IFP joint venture completion — The Suzano transaction remains subject to consultation requirements and regulatory approvals and is expected to close in mid-2026, with Suzano acquiring 51 percent for approximately $1.7 billion.

Outlook

Management said discrete headwinds will moderate 2026 growth and earnings potential while positioning the base business for sustainable growth in 2027 and beyond, and updated its 2026 outlook in the August 4, 2026 release. The Kenvue acquisition remains on track to close by the end of 2026. The company estimates approximately $150 million of incremental input costs in the remainder of 2026 assuming oil prices stay at current levels, prior to mitigation actions.