Kimberly-Clark (NASDAQ:KMB) reported broadly flat organic net sales in the second quarter of 2026 as a more cautious consumer environment, retailer inventory changes, a North American distribution-center fire and a social media disruption in China weighed on results. The company maintained its full-year free-cash-flow outlook but lowered several growth expectations, primarily due to the China diaper-business disruption.
Chairman and CEO Mike Hsu said the company delivered its 10th consecutive quarter of volume-plus-mix-led performance, held global weighted market share on a trailing 12-month basis and generated industry-leading gross productivity. However, he described the quarter as one marked by consumer pressure, moderating category growth and several one-time impacts.
Second-Quarter Results and Updated Outlook
Chief Financial Officer Nelson Urdaneta said second-quarter organic net sales were broadly flat, including an approximately 50-basis-point negative effect from the China social media disruption. For the first half, organic net sales increased 1.2%, supported by growth in South Korea, Indonesia, Vietnam, India and Brazil.
Adjusted operating profit rose 6.2% in the second quarter and 4.9% during the first six months. Results benefited from one-time tariff refunds and productivity savings, though those gains were partially offset by business exits, the China diaper disruption, unfavorable pricing net of input costs and investments intended to improve consumer value propositions.
Adjusted earnings per share from continuing operations increased 10.4% year over year in the quarter, aided by operating-profit growth, lower net interest expense and higher income from equity companies. The company generated approximately $1.1 billion of adjusted free cash flow in the first half and said it remains on track to produce about $2 billion for the full year.
Kimberly-Clark reduced its 2026 outlook as weighted average category growth now appears to be pacing at 2%, compared with its prior estimate of 2.5%. The company also expects its China diaper business disruption to create an approximately 100-basis-point headwind to full-year growth.
- Full-year organic growth is now expected to be roughly 100 basis points below weighted average category growth.
- Constant-currency adjusted operating profit growth is expected in the mid-single digits, down from a previous outlook of mid- to high-single-digit growth.
- Constant-currency adjusted EPS growth from continuing operations is expected in the high single digits, reduced from a prior double-digit growth outlook.
- Adjusted EPS attributable to Kimberly-Clark is now expected to decline by a low single-digit percentage on a constant-currency basis, compared with the prior expectation of results in line with 2025.
Urdaneta said the company has incorporated an expected $150 million of additional second-half gross input-cost headwinds into its outlook. Kimberly-Clark expects mitigating actions and tariff-refund benefits to offset those costs, leaving pricing net of cost inflation roughly neutral relative to the previously cited input-cost pressures.
China Disruption Pressures International Personal Care
Chief Operating Officer Russ Torres said false and misleading allegations regarding the quality of multiple diaper brands appeared on social media in China shortly before the country’s 618 Shopping Festival. The claims spread rapidly, he said, though multiple independent tests from certified third-party labs confirmed the safety of Kimberly-Clark’s products.
The company is cooperating with Chinese authorities and said the matter affected second-quarter results and could continue to affect the full year. Torres said the disruption reduced International Personal Care organic growth by approximately 140 basis points in the second quarter. Segment operating-profit growth still exceeded 2 percentage points, despite a roughly 440-basis-point headwind from the issue.
For the full year, Kimberly-Clark said the China disruption could reduce International Personal Care organic growth by 3 to 4 percentage points and reduce the segment’s operating-profit growth by 10 to 12 percentage points as the company invests to defend its franchise.
Elsewhere in international personal care, Torres highlighted market-share gains in diapers and pants in Indonesia, China and Brazil, as well as gains in Indonesia feminine care and Australia adult care. Vietnam and India posted high-double-digit organic growth in the first half, with e-commerce and premium products contributing to momentum.
North America Faces Temporary Sales Pressures
North America organic growth declined 0.7% in the quarter. Torres said retailer inventory changes reduced growth by about 100 basis points year over year, while the Los Angeles distribution-center fire represented an additional 80-basis-point impact. The comparison also included approximately 5% North American volume growth in the second quarter of 2025.
North American consumer tissue delivered volume-plus-mix-led growth, while North America Professional recorded its seventh consecutive quarter of volume growth. Consumer tissue gained 10 basis points of weighted value share from a year earlier and improved volume share by 70 basis points sequentially.
Personal-care share was more muted. A previously disclosed club distribution loss in diapers and training pants reduced diaper share by approximately 240 basis points and training-pants share by approximately 290 basis points during the quarter, according to Torres. The company’s weighted share in North America declined 40 basis points from the prior year, with the distribution loss accounting for substantially all of the decline.
North America operating profit increased approximately 11% in the second quarter, aided by productivity, revenue-growth-management actions and a one-time refund benefit. Operating profit rose about 1% in the first half, and segment operating margin increased 50 basis points.
Transformation Initiatives Advance
Kimberly-Clark said it launched Arbex, its joint venture with Suzano, on July 1 as an independent operating company comprising substantially all assets of its former international family care and professional business. Hsu said the transaction sharpens the company’s focus on personal care, enhances its financial profile and is expected to reduce future earnings volatility.
The company also said its pending Kenvue acquisition remains on track for an anticipated fourth-quarter close following regulatory clearance. Kimberly-Clark has approximately 50 teams and 600 employees involved in integration planning. Torres said the company is tracking ahead of expectations in building a three-year pipeline to achieve its $1.9 billion cost-synergy goal, while its four-year revenue-opportunity pipeline has surpassed $1 billion compared with a $1.4 billion target.
In addition, Hsu highlighted a proprietary alternative natural-fiber innovation program, including a pilot plant in Yuma, Arizona. He said the initiative could reduce exposure to natural-forest-fiber cost volatility and support the company’s natural-forest-fiber-free ambitions over the long term.
About Kimberly-Clark (NASDAQ:KMB)
Kimberly-Clark Corporation is a U.S.-based multinational manufacturer of personal care and consumer tissue products. The company develops, produces and markets a range of consumer brands and professional products, including facial and bathroom tissues, disposable diapers and training pants, feminine care, incontinence products and workplace hygiene solutions. Known for consumer-facing names such as Kleenex, Huggies, Kotex, Cottonelle and Scott, as well as professional offerings under Kimberly-Clark Professional and KleenGuard, the company supplies goods to retail, healthcare and institutional customers.
Founded in 1872 in Neenah, Wisconsin, Kimberly-Clark has expanded from its 19th-century paper-making roots into a global household and workplace products company.
