Kimberly-Clark sells diapers, tissues, incontinence products and other everyday care supplies to retailers and professional customers. In the second quarter of 2026, savings and one-time tariff refunds helped operating profit rise 6.9%, although sales excluding currency changes, divestitures and business exits slipped 0.1%. Transaction taxes nevertheless reduced quarterly net earnings, while slower sales growth and the planned Kenvue acquisition increased the importance of controlling spending and securing financing.
Analysis period: April–June 2026, with January–June comparisons. Information cutoff: August 4, 2026, the filing and earnings-release date; later developments are excluded.
1. Sales growth depended on currency while two disruptions reduced shipments
The second quarter showed weaker sales momentum than the first half as a whole. Reported sales rose slightly, but exchange rates supplied more than the increase. Kimberly-Clark’s measure of “organic” sales removes currency translation and business exits, making it more useful for judging sales within the businesses it kept.
| Continuing operations; USD millions unless stated | Second quarter 2025 | Second quarter 2026 | First half 2025 | First half 2026 |
|---|---|---|---|---|
| Net sales | 4,163 | 4,189 | 8,217 | 8,352 |
| Organic sales growth versus prior year | — | -0.1% | — | 1.2% |
| Gross profit | 1,456 | 1,603 | 2,965 | 3,137 |
| Operating profit | 592 | 633 | 1,223 | 1,386 |
| Operating margin, calculated | 14.2% | 15.1% | 14.9% | 16.6% |
| Continuing net income attributable to Kimberly-Clark | 441 | 405 | 905 | 969 |
| Continuing diluted earnings per share, USD | 1.33 | 1.22 | 2.72 | 2.91 |
Source: Second-quarter 2026 Form 10-Q, income statement, Note 6 and MD&A, “Consolidated Results” and organic-sales reconciliation. Dashes mean the earlier growth rate is not presented here.
For the second quarter, currency added 1.1 percentage points to reported sales growth. Volume reduced growth by 0.1 point, changes in the products sold and other factors added 0.4 point, lower prices reduced it by 0.5 point, and business exits reduced it by 0.4 point. These rounded components do not add exactly to the reported 0.6% increase. For the first half, volume contributed 1.3 points, helping explain the stronger six-month sales result.
Reported revenue also grew more slowly. Subtracting the second quarter from each first-half total gives first-quarter sales growth of 2.7%, versus 0.6% in the second quarter. This comparison measures growth in the dollar value of Kimberly-Clark’s sales. The separate volume figures above describe shipment changes; neither measure directly establishes what households bought.
North America’s organic sales fell 0.7% in the quarter. Management identified a 1.0-percentage-point drag from changes in retailers’ inventories and a further 0.8-point drag from the Los Angeles distribution-center fire. Retailers can order less while selling goods already on their shelves; that distinction matters when interpreting the company’s shipments. The fire added a separate supply disruption.
International Personal Care grew organic sales 1.0%, but China weakened the result. Management said social-media allegations about diaper quality reduced international organic growth by 1.4 percentage points and total-company organic growth by about 0.5 point. It also said testing by a government-certified third party confirmed product quality and safety. That is the company’s account of the testing; the clear financial evidence is that sales were affected and management expected further near-term damage.
Source: Form 10-Q, MD&A, “China Social Media Disruption,” sales drivers and segment discussions, pages 21–27.
P&G’s results provide counterevidence to an industry-wide explanation for Kimberly-Clark’s China setback. In the same April–June quarter, Procter & Gamble reported low-single-digit organic sales growth in Baby Care, driven by volume growth led by Greater China and favorable product mix, partly offset by lower prices. Its wider Baby, Feminine and Family Care segment recorded a 2% organic sales decline. Different products and geographic weights prevent a direct market-share calculation, but P&G’s performance suggests Kimberly-Clark’s local setback was not simply an industry-wide diaper downturn.
Source: P&G fiscal 2026 fourth-quarter release, “April–June Quarter Discussion,” Baby, Feminine and Family Care. P&G’s fiscal fourth quarter matches Kimberly-Clark’s calendar second quarter.
The business consequence is a split task: restore deliveries and retailer ordering in North America while rebuilding confidence in China. Neither task is solved merely by favorable exchange rates.
2. Manufacturing improvements helped, but adjusted profit still includes a one-time benefit
Profit improved more convincingly than sales, although tariff refunds helped the comparison. Kimberly-Clark reported about $120 million of gross productivity savings in the quarter and $235 million in the first half. These are savings before offsetting pressures, including lower selling prices and spending on products and the supply chain.
Kimberly-Clark kept more of each sales dollar after paying production costs: its quarterly gross margin rose from 35.0% to 38.3%. Part of that gain came from lower charges for its transformation program. Removing those charges leaves a smaller improvement, as the table shows.
| Continuing operations; second quarter; USD millions unless stated | 2025 | 2026 |
|---|---|---|
| Reported gross profit | 1,456 | 1,603 |
| Add transformation charges included in production costs | 82 | 22 |
| Management-adjusted gross profit | 1,538 | 1,625 |
| Net sales used to calculate margins | 4,163 | 4,189 |
| Reported gross margin | 35.0% | 38.3% |
| Adjusted gross margin | 36.9% | 38.8% |
Calculation notes: These are pretax measures. Each gross margin equals the corresponding gross profit divided by net sales. The adjusted figures still include tariff refunds.
The refunds’ separate dollar contribution is not quantified in the filing’s profit discussion. Disclosed productivity savings support the conclusion that operations became more efficient, but the evidence does not isolate how much profit would have grown without the refunds.
Source: Form 10-Q, Note 2 and MD&A, “Gross and Operating Profits” and adjusted gross-profit reconciliation.
The segments show where profit was earned, but corporate costs must be included before reaching the company total.
| Second quarter; USD millions | 2025 sales | 2026 sales | 2025 operating profit | 2026 operating profit |
|---|---|---|---|---|
| North America | 2,730 | 2,698 | 655 | 725 |
| International Personal Care | 1,433 | 1,491 | 182 | 186 |
| Corporate and other | — | — | -245 | -278 |
| Consolidated continuing operations | 4,163 | 4,189 | 592 | 633 |
Source: Form 10-Q, Note 9. Segment profit excludes specified corporate expenses and transaction and transformation items; the final row includes them.
North America produced most of the quarterly improvement through productivity and tariff refunds, despite lower sales and more advertising. International profit rose only $4 million. Management estimated that the China disruption reduced international profit growth by 4.4 percentage points; this is a contribution to the growth rate, not a 4.4-point reduction in the operating margin.
Management is spending some savings to encourage demand. Across the two segments, first-half advertising and promotion rose from $538 million to $578 million. North America also lowered prices to support sales of new products. These investments aim to attract customers, but strong company-wide sales growth has yet to follow. Productivity savings and tariff refunds helped absorb the additional spending.
Source: Form 10-Q, Note 9 and MD&A segment discussions.
The distinction between reported and adjusted profit is especially important this year. Acquisition spending lowered reported profit; insurance proceeds and Brazilian business-tax credits increased it. Management removes all three, along with transformation charges, from its adjusted measure.
| Continuing operating profit bridge; USD millions, pretax | Second quarter 2025 | Second quarter 2026 | First half 2025 | First half 2026 |
|---|---|---|---|---|
| Reported operating profit | 592 | 633 | 1,223 | 1,386 |
| Add transformation operating charges | 121 | 54 | 196 | 105 |
| Add Kenvue acquisition costs | 0 | 109 | 0 | 157 |
| Remove Brazilian business-tax credits | 0 | -39 | 0 | -39 |
| Remove insurance recovery | 0 | 0 | 0 | -120 |
| Management-adjusted operating profit | 713 | 757 | 1,419 | 1,489 |
Source: Form 10-Q, MD&A, “Summary of Non-GAAP Financial Measures,” page 30. The 2025 transformation totals also include nonoperating charges of $1 million for the quarter and $3 million for the first half; those are excluded from this operating-profit bridge.
Adjusted operating profit increased 6.2% in the quarter and 4.9% in the first half. Because tariff refunds remain inside those figures, “adjusted” should not be read as “entirely repeatable.” Equally, the improvement should not be dismissed: the company generated substantial disclosed productivity savings while funding marketing and operational changes.
3. Transaction taxes turned higher operating profit into lower quarterly earnings
The fall in quarterly earnings mainly reflects taxes and the business separation, rather than a fall in operating profit. Continuing pretax income before equity-company earnings rose from $513 million to $572 million. Yet income-tax expense increased from $116 million to $217 million, pushing the effective tax rate from 22.6% to 37.9%.
The largest separately identified tax item was $87 million for earnings from the international tissue business expected to be brought back to the parent company, compared with $10 million a year earlier. Kimberly-Clark recognized the related future tax obligation as it prepared the separation. This charge appears in continuing operations even though it relates to the departing business.
Income from equity companies increased from $47 million to $55 million, partially cushioning the tax increase. After noncontrolling interests, continuing quarterly earnings fell from $441 million to $405 million. Continuing profit attributable to Kimberly-Clark fell from 10.6 cents to 9.7 cents per dollar of continuing sales—a decline in its calculated net margin from 10.6% to 9.7%. Diluted shares averaged 333.3 million in both quarters, so a smaller share count did not cause the earnings-per-share result.
Source: Form 10-Q, income statement, Note 6 and adjusted effective-tax-rate reconciliation, page 31.
The international tissue business, reported separately as discontinued operations, made a $60 million after-tax quarterly loss versus a $68 million profit. It still earned $70 million before tax, but recorded $130 million of tax expense. Management separately identified $107 million of net tax charges associated with the separation reorganization, including an intercompany intellectual-property transaction. These charges help explain why a business with pretax profit reported an after-tax loss. Quarterly separation expenses also rose from $33 million to $72 million.
Those effects brought total quarterly earnings attributable to Kimberly-Clark down from $509 million to $345 million. For the first half, continuing earnings attributable to the company rose from $905 million to $969 million, while total attributable earnings fell from $1,076 million to $1,010 million. The business being sold therefore changes the answer to whether “earnings grew.”
Source: Form 10-Q, Notes 3 and 6 and MD&A, “Income (Loss) from Discontinued Operations, Net of Income Taxes,” page 25.
Reporting basis: Once the departing business was classified as held for sale, Kimberly-Clark stopped recording depreciation and amortization on its long-lived assets. Those charges normally spread asset costs over their useful lives. Their absence helped the earnings comparison: first-half charges were zero in 2026 versus $68 million in 2025.
These are real costs of changing the business, even when removed from adjusted earnings. The adjusted comparison below helps separate them from operating performance without treating them as costless.
| Continuing diluted EPS bridge; USD per share, after tax | Second quarter 2025 | Second quarter 2026 | First half 2025 | First half 2026 |
|---|---|---|---|---|
| Reported EPS | 1.33 | 1.22 | 2.72 | 2.91 |
| Transformation | 0.27 | 0.12 | 0.50 | 0.22 |
| Kenvue acquisition | 0 | 0.30 | 0 | 0.43 |
| Brazilian business-tax credits | 0 | -0.10 | 0 | -0.10 |
| Insurance recovery | 0 | 0 | 0 | -0.32 |
| Tax on IFP repatriated earnings | 0.03 | 0.26 | 0.03 | 0.26 |
| Management-adjusted EPS | 1.63 | 1.80 | 3.25 | 3.40 |
Source: Form 10-Q, adjusted EPS and tax reconciliations, pages 30–32. Adjustments use the applicable jurisdiction’s tax treatment and include rounding; they do not remove tariff refunds.
4. Cash timing and an insurance recovery helped fund higher investment
First-half operating cash covered capital spending and the parent company’s cash dividend, but only narrowly. Cash from operations increased by $556 million despite lower total net income. The largest numerical change came from working capital—the cash tied up in everyday operations through customer bills, inventory and amounts owed to suppliers and others. Changes in these balances provided $399 million, compared with consuming $471 million a year earlier.
Management attributed the cash improvement primarily to the insurance settlement and favorable working-capital changes, partly reflecting timing and lower incentive payments. Those benefits left more cash available without requiring strong sales growth. The filing does not separately establish faster customer collection as a cause, and the timing benefits should not be treated as a recurring source of growth.
| Consolidated cash generation and allocation, including discontinued operations; USD millions | First half 2025 | First half 2026 |
|---|---|---|
| Net income, including noncontrolling interests | 1,085 | 1,025 |
| Working-capital cash contribution | -471 | 399 |
| Other noncash and operating adjustments, calculated | 483 | 229 |
| Operating cash flow | 1,097 | 1,653 |
| Capital spending, shown as a positive use of cash | 401 | 776 |
| Free cash flow, calculated | 696 | 877 |
| Cash dividends paid to Kimberly-Clark shareholders | 824 | 843 |
| Remainder after those dividends, calculated | -128 | 34 |
| Cash spent on share repurchases | 120 | 0 |
Source: Form 10-Q, cash-flow statement and MD&A, “Liquidity and Capital Resources.” Free cash flow here means operating cash less gross cash capital spending, without deducting asset-sale proceeds. It includes discontinued operations and is not a continuing-business cash forecast.
The company nearly doubled capital spending. Of the $776 million total, $81 million belonged to discontinued operations, leaving $695 million for continuing operations; the comparable amounts were $46 million and $355 million in 2025. Management expected approximately $1.3 billion of full-year capital spending, including transformation investment.
The transformation aims to simplify the supply chain and reduce organizational costs while supporting product innovation. Its timetable was extended through 2028. Management expects approximately $1.5 billion of total pretax charges, about 60% requiring cash, and $3 billion of gross productivity savings plus $200 million of overhead savings. These are program expectations, not an additional annual profit forecast. Cumulative charges had reached $913 million, and 95% of expected overhead savings had either been realized or approved for action; approval does not mean all savings have already arrived.
Source: Form 10-Q, Notes 2–3, MD&A transformation discussion and liquidity discussion.
The $34 million remaining after capital spending and parent dividends was before $15 million of dividends to noncontrolling owners and other investing and financing uses. With no share repurchases, cash spent on buying back shares was $120 million lower than in the prior first half. Cash generation therefore supported the investment program, but did not create a large internally funded reserve for Kenvue.
5. The tissue business’s borrowing lifted total debt before separation
The decline in continuing debt does not describe the entire June balance sheet. Continuing debt fell by $651 million, but the tissue business borrowed before its July separation. Including that business, consolidated financing debt increased from $7,190 million to $7,882 million.
| Balance-sheet evidence; USD millions | December 31, 2025 | June 30, 2026 |
|---|---|---|
| Continuing cash and equivalents | 688 | 956 |
| Continuing receivables | 1,892 | 1,858 |
| Continuing inventory | 1,475 | 1,539 |
| Continuing property and equipment, net | 6,775 | 6,948 |
| Continuing goodwill and other intangibles, combined | 1,916 | 1,904 |
| Discontinued-operation assets, combined | 2,425 | 3,296 |
| Total assets | 17,098 | 18,554 |
| Continuing financing debt | 7,168 | 6,517 |
| Discontinued-operation financing debt | 22 | 1,365 |
| Continuing trade payables | 3,388 | 3,372 |
| Continuing accrued expenses and other current liabilities | 1,888 | 2,269 |
| Total stockholders’ equity | 1,630 | 1,874 |
Source: Form 10-Q, balance sheet and Notes 3 and 10. Debt includes current and noncurrent financing balances; trade payables are shown separately.
Customers’ unpaid bills fell modestly, while the recorded cost of inventory rose $64 million. Finished products accounted for $45 million of that increase before the inventory accounting adjustment. Different accounting methods assign different purchase costs to goods still on hand: last-in-first-out treats the latest purchases as sold first, first-in-first-out treats the earliest purchases as sold first, and weighted-average costing uses an average. The adjustment between these methods remained $191 million, so a change in that adjustment did not cause the inventory increase. The filing does not establish whether the higher inventory mainly reflected deliberate stocking, slower sales or other factors.
The recorded value of property and equipment rose $173 million. Within that total, projects still under construction increased $249 million to $1,450 million, showing that substantial investment had yet to become completed facilities or equipment. The filing does not divide this spending between replacing existing assets and adding capacity. Goodwill and other intangible assets changed little; these acquisition-related balances did not yet include Kenvue because the deal had not closed.
Accrued expenses and other current liabilities rose $381 million, while trade payables were almost unchanged. The filing does not provide a complete explanation of the accrued-liability increase. It should not all be labelled delayed supplier payments. Indeed, the separately disclosed transformation liability fell from $62 million to $48 million after $84 million of cash payments.
Source: Form 10-Q, balance sheet and Notes 2 and 10.
Suppliers also use a finance program under which banks pay participating suppliers and Kimberly-Clark pays the confirmed invoice at its due date. Approximately $1.1 billion was outstanding at both balance-sheet dates, including $186 million in discontinued operations at June. Contractual supplier terms generally range from 75 to 180 days. The program lets suppliers receive cash sooner, but their participation does not change Kimberly-Clark’s payment terms or the amounts it owes. The December and June balances alone cannot establish the program’s contribution to the cash-flow improvement over the first half of 2025.
Source: Form 10-Q, Note 10, “Supplier Finance Program.”
The separation closed on July 1. Note 11 reports approximately $1.3 billion of cash purchase proceeds, subject to adjustment, and a retained 49% interest initially estimated at $1.2 billion. That closing disclosure supersedes the approximately $1.7 billion purchase price described in the earlier agreement. A portion of proceeds will be attributed to a long-term license; the expected pretax gain of more than $1 billion belongs to the third quarter and is not second-quarter operating earnings.
The departing business borrowed approximately $1.3 billion on June 29. Kimberly-Clark used part of those proceeds to repay commercial paper, its short-term borrowing. This helps explain why continuing debt fell even as debt including the departing business increased.
The loan obligations transferred to the joint venture at closing, ending Kimberly-Clark’s repayment responsibility. The loan matures in June 2031 and initially bears interest at EURIBOR, a euro interest-rate benchmark, plus 1.15 percentage points. The June borrowing and July sale proceeds are separate transactions; only the borrowing belongs in second-quarter cash flows.
Source: Form 10-Q, Notes 3 and 11 and MD&A, “Liquidity and Capital Resources—Financing.”
6. Kenvue makes funding and execution more important than the current debt decline
Kenvue would expand Kimberly-Clark’s business substantially while adding demands on cash and management. Management’s stated purpose is to combine everyday care products with consumer-health brands and apply shared research, marketing and distribution capabilities.
At announcement, management targeted annual benefits, once fully achieved, of $1.9 billion in cost savings and $500 million in additional profit from revenue gains, partly offset by $300 million of reinvestment. It expected to achieve the cost savings within three years of closing and the revenue benefits within four. The $2.5 billion of expected cash implementation costs would be incurred during the first two years, so financing must support spending before all the benefits arrive.
Source: Kimberly-Clark’s November 3, 2025 acquisition announcement, strategic rationale and synergy expectations. These are management’s prospective targets, not results achieved in the current quarter.
The second-quarter filing estimates approximately $6.7 billion of cash consideration and 280 million new Kimberly-Clark shares. That issuance would equal roughly 84% of June’s 332.6 million outstanding shares, before other changes. New shares would accompany a new business and its earnings, so this is a measure of transaction scale, not a forecast of EPS dilution.
The planned cash payment is far larger than continuing cash of $956 million or first-half free cash flow. Management expects to use existing cash, new borrowing and proceeds from the tissue transaction. Second-quarter acquisition expenses of $109 million show that the deal is already reducing reported profit before Kenvue contributes revenue; the expense figure does not separately identify cash paid during the quarter. Closing was expected in the second half of 2026 and remained subject to foreign regulatory approvals and other conditions. A $1.1 billion termination fee can apply under specified circumstances.
Source: Form 10-Q, Notes 4 and 6.
Kimberly-Clark has arranged financing support. It has a $4 billion revolving credit facility, which permits borrowing and repayment within an agreed limit, maturing in December 2030, and a separate $1 billion facility maturing in June 2028. The filing also describes an acquisition bridge-financing commitment originally worth $7.7 billion; $3.8 billion was replaced by other facilities, leaving $3.9 billion. These commitments provide access to borrowing, subject to their terms, rather than cash earned by the business.
Continuing debt due within a year was $43 million at June. However, short-term borrowing averaged $652 million at month ends during the first half, far above the $31 million balance at June. The low closing balance therefore does not represent borrowing needs throughout the period.
Source: Form 10-Q, MD&A, “Liquidity and Capital Resources.”
The year-end debt schedule provides context for existing repayments. It predates the June borrowing and prospective acquisition financing.
| Existing contractual schedule at December 31, 2025; USD millions | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 onward |
|---|---|---|---|---|---|---|
| Long-term debt principal payments | 413 | 608 | 704 | 706 | 745 | 3,720 |
| Interest payments on long-term debt | 240 | 236 | 216 | 183 | 158 | 1,466 |
Source: 2025 Form 10-K, “Contractual Obligations,” page 31. Payments are contractual amounts, not debt carrying values.
The $1.8 billion acquisition loan facility has a limited borrowing window. Its commitments end if the merger agreement terminates or the acquisition closes without drawing the loan. Borrowed amounts must be repaid within one year, subject to earlier mandatory repayments. The filing describes a choice of a base rate with a 1.00% floor or a floating secured overnight financing rate with a zero floor, plus an applicable margin initially set at 0.75 percentage point. Using this facility would add a near-term need to repay or replace the funding.
The annual filing identifies this $1.8 billion facility and $2 billion of the new revolving facility as the financing that replaced $3.8 billion of bridge commitments. Those amounts should not be counted again as additional borrowing capacity. Neither filing quantifies the remaining borrowing capacity under all loan conditions.
Year-end undiscounted lease payments were $489 million, including $161 million scheduled for 2026; another $186 million of operating-lease commitments had not commenced. These older commitments are not June balances and include payments already made during 2026.
Source: 2025 Form 10-K, Notes 7 and 11.
Kimberly-Clark also arranged interest-rate contracts covering $4.3 billion of anticipated acquisition debt to reduce the risk of benchmark rates moving before that debt is issued. The $4.3 billion is the borrowing amount used to size the contracts, not cash raised. Their $24 million unrealized loss was initially recorded outside net income; gains or losses will enter interest expense over the term of the related debt. The contracts help manage rates, while borrowing supplies the cash needed to close.
Source: Form 10-Q, Note 8.
7. The next test is whether sales recover before new costs absorb the savings
Kimberly-Clark has demonstrated cost control, but its near-term growth outlook weakened. On August 4, management expected full-year organic sales growth to run approximately one percentage point below growth in the product categories and countries where it competes, weighted to reflect its business. Those markets had grown 2% over the preceding twelve months. Using that reference rate implies approximately 1% company organic growth; the forecast moves with category growth rather than fixing an unconditional 1% target.
Management attributed roughly one percentage point of expected company-wide sales impact to the China disruptions. It now expected adjusted operating profit to grow at a mid-single-digit rate excluding exchange-rate changes. That forecast still relies on profit growing faster than sales.
Source: August 4, 2026 earnings release, “2026 Outlook.” These forecasts describe the company’s disclosed outlook at the information cutoff.
Energy costs are another concrete pressure. Assuming oil prices remained at the levels prevailing when the filing was prepared, management estimated approximately $150 million of additional input costs during the rest of 2026, before mitigation. That is about 10% of first-half adjusted operating profit, illustrating its scale rather than predicting the final profit reduction. Purchasing actions, pricing and further productivity would determine how much reaches earnings.
Source: Form 10-Q, MD&A, “Conflict in the Middle East,” and adjusted operating-profit reconciliation.
The annual legal note identifies ordinary-course litigation and environmental matters. Management did not expect material aggregate harm, but acknowledged potentially substantial adverse outcomes. Undisclosed loss ranges were either inestimable or immaterial; that wording does not establish zero exposure.
Source: 2025 Form 10-K, Note 12. No new quantified legal-loss range is presented in the selected quarterly filing.
Kimberly-Clark is controlling costs effectively, but sales growth remains weak. Savings, tariff refunds and favorable cash timing have supported substantial investment, while the tissue separation releases resources and changes which businesses contribute to reported earnings. A stronger outcome depends on restoring sales in China and North America, containing input costs, and securing enough funding for Kenvue’s early integration spending while savings build. A sustained recovery in comparable sales would strengthen the business assessment; continued weakness would increase reliance on further cost reductions.
Reporting basis and calculation notes
Reporting basis: Kimberly-Clark Corporation and consolidated subsidiaries; unaudited Form 10-Q for June 30, 2026, filed August 4, 2026, prepared under US generally accepted accounting principles (GAAP). SEC accession: 0001628280-26-052348. CIK: 0000055785. The financial year ends December 31.
Unless explicitly labelled as total or discontinued results, income and segment comparisons exclude the International Family Care and Professional business in both years. The cash-flow and equity statements include it. “Continuing operations” means the businesses remaining within Kimberly-Clark’s consolidated operating results after the separation.
Source: SEC filing index and Form 10-Q, cover and Note 1.
Calculation notes: Unless a table states otherwise, amounts below are USD millions. Growth means the new amount divided by the comparable old amount, minus one. A margin is the named profit divided by continuing net sales. Percentage-point changes describe differences between rates.
- First-quarter reported sales are calculated as first-half sales less second-quarter sales: 8,352 − 4,189 = 4,163 for 2026 and 8,217 − 4,163 = 4,054 for 2025. Growth is therefore 2.7%. No quarterly organic rate is inferred by subtracting rounded growth rates.
- Operating profit growth is 633 ÷ 592 − 1 = 6.9% for the quarter and 1,386 ÷ 1,223 − 1 = 13.3% for the first half. Adjusted growth is 757 ÷ 713 − 1 = 6.2% and 1,489 ÷ 1,419 − 1 = 4.9%. Calculation notes: The following table checks how reported profit becomes operating cash. Positive adjustments increase cash relative to profit; negative adjustments reduce it. All amounts include continuing and discontinued operations.
| Consolidated operating-cash reconciliation; USD millions | First half 2025 | First half 2026 |
|---|---|---|
| Net income, including noncontrolling interests | 1,085 | 1,025 |
| Add depreciation and amortization, which allocate asset costs without a current cash payment | 440 | 360 |
| Add stock-based compensation | 73 | 64 |
| Adjust for tax expense recognized in a different period from the related cash tax payment | -30 | -83 |
| Remove asset and business sale gains, or add back losses | 36 | -7 |
| Remove equity-company earnings exceeding dividends received | -50 | -65 |
| Add or subtract cash from changes in working capital | -471 | 399 |
| Adjust for differences between retiree-benefit expense and cash funding | 9 | -2 |
| Other adjustments | 5 | -38 |
| Operating cash flow | 1,097 | 1,653 |
These adjustments reconcile cash with accounting profit; they are not additional recurring earnings.
Calculation notes: The next table checks where consolidated cash went during the first half of 2026.
| Cash movement; USD millions | First half 2026 |
|---|---|
| Opening cash and equivalents | 701 |
| Cash provided by operations | 1,653 |
| Cash used for investing | -765 |
| Cash used for financing | -222 |
| Exchange-rate effect | -4 |
| Closing cash and equivalents | 1,363 |
Opening cash comprised $688 million in continuing operations and $13 million in discontinued operations. Closing cash comprised $956 million and $407 million, respectively. The statement presents cash and equivalents without a separate restricted-cash component. The $1,363 million consolidated total therefore has a broader scope than the $956 million continuing-only balance-sheet line.
Calculation notes: Borrowing supplied a net $677 million during the first half: $1,329 million of debt proceeds, less $400 million of repayments and a $252 million reduction in short-term debt. These cash flows include the departing business’s loan. Continuing debt fell from $7,168 million to $6,517 million, while discontinued-operation debt rose from $22 million to $1,365 million.
The balance sheet also balances after keeping redeemable subsidiary preferred securities separate from ordinary equity. These securities can be repaid to their holders and are presented between liabilities and stockholders’ equity.
| Consolidated balance-sheet check; USD millions | December 31, 2025 | June 30, 2026 |
|---|---|---|
| Total liabilities | 15,446 | 16,658 |
| Redeemable subsidiary preferred securities | 22 | 22 |
| Total stockholders’ equity | 1,630 | 1,874 |
| Total assets: sum of the three rows above | 17,098 | 18,554 |
Source: Form 10-Q, statements of income, cash flows and financial position, Notes 3 and 6, and non-GAAP reconciliations.
Dividends distributed most of first-half profit, limiting the amount added to equity. Retained earnings—the accumulated profit kept in the business—rose $154 million, while total stockholders’ equity rose $244 million after other changes. Kimberly-Clark also delivered shares it already held to employees under award plans. That reduced treasury shares, meaning shares held by the company itself, while the total number of issued shares stayed unchanged.
| Kimberly-Clark parent equity reconciliation; USD millions | December 31, 2025 | First-half movement | June 30, 2026 |
|---|---|---|---|
| Common stock | 473 | 0 | 473 |
| Additional paid-in capital | 849 | -61 | 788 |
| Treasury stock, at cost | -5,987 | 97 | -5,890 |
| Retained earnings | 9,611 | 154 | 9,765 |
| Accumulated other comprehensive loss | -3,444 | 58 | -3,386 |
| Parent stockholders’ equity | 1,502 | 248 | 1,750 |
| Noncontrolling interests | 128 | -4 | 124 |
| Total stockholders’ equity | 1,630 | 244 | 1,874 |
Calculation notes: All monetary inputs below are USD millions and cover the first half of 2026. The table explains the changes in parent equity shown above.
| Equity component | Named inputs to the change, USD millions | Net change, USD millions |
|---|---|---|
| Retained earnings | Attributable profit 1,010 − declared dividends 851 − other changes 5 | 154 |
| Additional paid-in capital | Award exercises and vesting -127 + compensation recognition 62 + other changes 4 | -61 |
| Treasury stock, recorded as a deduction from equity | Shares delivered for awards 96 + other changes 1 | 97 |
| Other comprehensive income, recorded outside net income | Currency translation -2 + pension adjustments 22 + other postretirement adjustments 19 + cash-flow hedge adjustments 19 | 58 |
Paid-in capital records amounts contributed by shareholders and changes associated with share awards. Delivering treasury shares to employees reduced the deduction for company-held shares, increasing their recorded balance from -$5,987 million to -$5,890 million. The company held 662,000 fewer treasury shares, while issued shares remained at 378.597 million. It made no share repurchases during the first half.
The cash-flow statement reports a $64 million stock-compensation adjustment, while the equity statement reports $62 million. Each reconciliation uses its own statement’s amount. Other comprehensive income records specified currency, benefit-plan and hedging changes outside current net income; its $58 million increase is not an additional cash inflow.
Source: Form 10-Q, first-half equity statement, cash-flow statement and Note 7.
Calculation notes: The parent company declared $851 million of dividends and paid $843 million during the first half. Declarations reduce retained earnings; payments reduce cash. The amounts differ because declaration and payment dates do not coincide.
This analysis is for information only and is not investment advice.