KIMBERLY CLARK CORP
For the period ended Mar 31, 2026. Filed Apr 28, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 28, 2026
KMB$108.43-1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-10-30.
0001628280-25-047387
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-28.
0001628280-26-027800
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 100 current paragraphs.
51 unchanged; 31 reworded; 17 added; 25 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 15 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Conflict in the Middle East
Current report
Ongoing geopolitical conflicts in the Middle East have led to disruptions in global energy supplies and volatility in global energy prices, including the prices for certain raw materials that are principally derived from petroleum, which may contribute to inflationary pressures, disrupt global supply chains and adversely impact consumer spending patterns. Based on preliminary analysis reflecting the current market environment and assuming oil prices remain at $100 per barrel for the remainder of the year, we estimate incremental input costs of approximately $200 (prior to consideration of mitigation actions) during the remainder of 2026. We are continuing to evaluate the evolving macroeconomic environment and our ability to mitigate the impact on our business, consolidated results of operations and financial condition.
Current report
Pending Acquisition of Kenvue, Inc.
Current report
On November 2, 2025, we entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire the outstanding equity interests of Kenvue, Inc. ("Kenvue"), a global consumer health leader, for stock and cash consideration (the "Kenvue Acquisition"). Under the terms of the Merger Agreement, which was unanimously approved by the Boards of Directors of each of Kimberly-Clark and Kenvue, each share of Kenvue common stock, par value $0.01 per share, issued and outstanding at the close of the Kenvue Acquisition (subject to certain provisions within the Merger Agreement) will be converted into the right to receive (i) 0.14625 shares of Kimberly-Clark common stock, par value $1.25 per share (the "Stock Consideration"), plus (ii) $3.50 in cash (the "Cash Consideration" and, together with the Stock Consideration, the "Merger Consideration"). In total, we expect approximately 280 million shares of common stock to be issued and approximately $6.7 billion to be paid for the Merger Consideration. The Cash Consideration is expected to be funded through a combination of cash on hand, proceeds from new debt issuance, and proceeds from the IFP Transaction (as defined below). The actual value of the transaction will fluctuate based upon changes in the price of Kimberly-Clark common stock and the number of shares of Kenvue common stock outstanding at the time of closing.
Current report
During the three months ended March 31, 2026, we incurred $48 of acquisition-related costs in connection with the Kenvue Acquisition, which are included in Marketing, research and general expenses. See Item 1, Note 4 to the Unaudited Interim Condensed Consolidated Financial Statements for further details.
Current report
Operating profit of $753 for the three months ended March 31, 2026 increased 19.3%, inclusive of charges of $51 and $48 related to the 2024 Transformation Initiative and the Kenvue Acquisition, respectively, offset by a benefit of $120 related to the settlement of insurance claims from a previous acquisition. Results in the prior year included charges of $75 related to the 2024 Transformation Initiative. Excluding these items, adjusted operating profit for the three months ended March 31, 2026 and 2025 was $732 and $706, respectively.
Current report
Adjusted operating profit for the three months ended March 31, 2026 increased 3.7% driven by lower marketing, research and general expenses and favorable currency impacts, partially offset by impacts from divestitures and business exits of approximately 470 basis points.
Current report
The effective tax rate for the three months ended March 31, 2026 was 23.9% compared to 23.5% in the prior year. The adjusted effective tax rate for the three months ended March 31, 2026 was 26.2% compared to 20.7% in the prior year. The increase was driven by the lapping of discrete tax benefits related to the resolution of certain tax matters in the first quarter of 2025 and a change in the US tax law effective July 2025.
Current report
Diluted earnings per share of $1.70 for the three months ended March 31, 2026 increased 22.3% reflective of the increase in income from continuing operations discussed above. Adjusted diluted earnings per share of $1.60 decreased 1.2% primarily due to the higher adjusted effective tax rate discussed above.
Current report
Operating profit for the three months ended March 31, 2026 of $623 decreased 8.1%, driven by impacts from divestitures and business exits (approximately 490 basis points), supply chain related investments and incremental advertising spend, partially offset by gross productivity savings.
Current report
Cash provided by operations was $745 during the three months ended March 31, 2026 compared to $327 in the prior year. The increase was driven primarily by an insurance recovery associated with the settlement of claims from a previous acquisition and favorable changes in operating working capital, due in part to lower incentive payments in the current year.
Current report
We issue long-term debt in the public market periodically. Proceeds from the offerings are used for general corporate purposes, including repayment of maturing debt or outstanding commercial paper indebtedness.
Current report
As a result of the pending Kenvue Acquisition, in November 2025, the Company and JPMorgan Chase Bank, N.A. (the "Bank") executed a certain bridge loan facility commitment letter, pursuant to which the Bank has committed to provide bridge financing (the "Bridge Facility") in an amount of $7.7 billion to the Company to fund the Cash Consideration, the fees, costs and expenses incurred in connection with the transactions contemplated by the Merger Agreement and to repay certain existing indebtedness of Kenvue and/or its subsidiaries. In December 2025, $3.8 billion of the commitments in the Bridge Facility were terminated in connection with entry into the New Revolving Credit Facility and DDTL Credit Facility (as defined below).
Current report
In December 2025, we entered into (i) the Five-Year Revolving Credit Agreement by and among Kimberly-Clark, JPMorgan Chase Bank, N.A. (the "Bank") and the other lenders party thereto (the “New Revolving Credit Facility”) and (ii) the Delayed Draw Term Loan Credit Agreement by and among Kimberly-Clark, the Bank, and the other lenders party thereto (the “DDTL Credit Facility”). The New Revolving Credit Facility matures in December 2030 and provides for a revolving credit facility of up to $4.0 billion (which may be increased by up to $1.0 billion upon obtaining additional commitments from the then-existing or new lenders and the satisfaction of certain other conditions). Concurrently with the closing of the New Revolving Credit Facility and the DDTL Credit Facility, we terminated the commitments outstanding under our previous $750 revolving credit facility, originally set to mature in May 2026 and reduced the commitments outstanding under our existing $2.0 billion revolving credit facility, which matures in June 2028, to $1.0 billion. For further information, refer to our Annual Report on Form 10-K for the year ended December 31, 2025.
Current report
The Organization for Economic Co-Operation and Development introduced a framework under Pillar Two which includes a 15% global minimum tax rate. Many jurisdictions in which we do business have started to enact laws implementing Pillar Two. We are monitoring these developments and currently do not believe these rules will have a material impact on our financial results.
Current report
•Kenvue Acquisition - Acquisition-related costs incurred in connection with the pending Kenvue Acquisition, primarily related to external advisory, legal, accounting, and other related costs. See Item 1, Note 4 to the Unaudited Interim Condensed Consolidated Financial Statements for details.
Current report
•Insurance Recovery – Settlement of insurance claims related to a previous acquisition.
Removed paragraphs (25)
Previous report
Changes to U.S. trade policy, including increasing tariffs on imports have led to significant volatility and uncertainty in global markets. We estimate that the incremental costs of the new tariffs that are currently in effect in the U.S., as well as in other markets in which we operate, to be approximately $100 in 2025, most of which will be incurred by the North America segment. We are continuing to evaluate these developments and our ability to offset a portion of these costs to mitigate the impact on our business, consolidated results of operations, and financial condition.
Previous report
and International Personal Care ("IPC"). The results of the IFP Business, including certain costs that were previously allocated to the IPC segment that relate to assets or activities that are part of the IFP Transaction, are reported as discontinued operations and excluded from segment results for all periods presented. Additionally, certain operations and commercial activities of the former IFP segment retained by the Company are now reported in the NA and IPC segments. Further, Corporate and Other was updated for all periods presented to include the following:
Previous report
•Operations of the former IFP segment that were divested prior to the IFP Transaction and therefore not reported as discontinued operations.
Previous report
•Costs previously allocated to the former IFP segment that are not directly attributable to the operations included in the IFP Transaction and therefore are not reported as discontinued operations.
Previous report
Divestiture Activity
Previous report
On July 1, 2024, we completed the sale transaction of our former personal protective equipment ("PPE") business for total consideration of $635. Upon closure of the transaction, a pre-tax gain of $566 ($453 after-tax) was recognized in Other (income) and expense, net. This gain is net of transaction costs of $14 that were determined to be directly attributable to the sale transaction.
Previous report
War in Ukraine
Previous report
Consistent with the humanitarian nature of our products, we manufacture and sell only essential items in Russia, such as baby diapers and feminine pads, which are critical to the health and hygiene of women, girls and babies. Beginning in March 2022, we significantly adjusted our business in Russia, substantially curtailing media, advertising and promotional activity and suspending capital investments, other than certain maintenance investments, in our sole manufacturing facility in Russia. Our Russia business has represented approximately 1% to 2% of our global net sales, operating profit and total assets. Our ability to continue our operations in Russia may change as the situation evolves. We have experienced high input costs, supply chain complexities, reduced consumer demand, restricted access to raw materials and production assets, and restricted access to financial institutions, as well as supply chain, professional services, monetary, currency, trade and payment/investment sanctions and related controls. As the business, geopolitical and regulatory environment concerning Russia evolves, we may not be able to sustain the limited manufacture and sale of our products, and our assets may be partially or fully impaired.
Previous report
Net sales of $12.4 billion for the nine months ended September 30, 2025 declined 2.6%, primarily driven by divestitures and business exits and unfavorable currency impacts, partially offset by organic sales growth. Organic sales increased 1.6% driven by volume gains of 2.4%, partially offset by lower pricing.
Previous report
Operating profit for the three and nine months ended September 30, 2025 was $621 and $1.8 billion, respectively, compared to $1.0 billion and $2.3 billion in the prior year. Results included charges related to the 2024 Transformation Initiative of $62 and $258 for the three and nine months ended September 30, 2025, respectively, and $124 and $359 for the three and nine months ended September 30, 2024. Results in 2024 also included a $565 gain from the sale of our PPE business and charges of $97 for the impairment of intangible assets. Excluding these items, adjusted operating profit for the three and nine months ended September 30, 2025 was $683 and $2.1 billion, respectively, compared to $682 and $2.2 billion in the prior year.
Previous report
Adjusted operating profit for the three months ended September 30, 2025 was in line with the prior year as lower adjusted gross profit discussed above, coupled with a 210 basis point impact from divestitures and business exits was offset by lower marketing, research and general expenses.
Previous report
The decrease in adjusted operating profit for the nine months ended September 30, 2025 resulted from lower net sales and adjusted gross profit discussed above, coupled with a 400 basis point impact from divestitures and business exits and unfavorable currency impacts, partially offset by lower marketing, research and general expenses.
Previous report
The effective tax rate for the three and nine months ended September 30, 2025 was 45.4% and 30.6%, respectively, compared to 19.4% and 19.1% in the prior year. The increases in each period were primarily driven by incremental tax charges as a result of the One Big Beautiful Bill Act (“OBBBA”) relating to a valuation allowance on current and prior year U.S. foreign tax credits. The adjusted effective tax rate for the three and nine months ended
Previous report
September 30, 2025 was 26.5% and 22.6%, respectively, compared to 21.5% and 21.7% in the prior year. The increases were driven primarily by transitory impacts from OBBBA and the resolution of certain tax matters in the prior year.
Previous report
Diluted earnings per share for the three and nine months ended September 30, 2025 were $1.01 and $3.73, respectively, compared to $2.42 and $5.37 for the prior year. Adjusted diluted earnings per share for the three and nine months ended September 30, 2025 were $1.45 and $4.70, respectively, representing a 7.1% and 5.2% decrease compared to the prior year. The decrease was primarily driven by lower adjusted operating profit, higher income tax expense caused by OBBBA, and lower income from equity companies, which more than offset the benefits from lower dilutive shares outstanding.
Previous report
Income from discontinued operations, net of income taxes for the nine months ended September 30, 2025 was $281 compared to $283 in the prior year, as pre-tax separation charges of $50 were largely offset by a reduction in depreciation and amortization expense of $40.
Previous report
Operating profit for the three months ended September 30, 2025 of $640 was in line with the prior year, as impacts from divestitures and business exits (approximately 220 basis points) were offset by gross productivity savings and lower marketing, research and general expenses. Operating profit for the nine months ended September 30, 2025 of $2.0 billion decreased 1.0%, primarily due to divestitures and business exits (approximately 340 basis points), unfavorable pricing net of cost inflation, including tariff impacts, and supply chain related investments, partially offset by gross productivity savings and lower marketing, research and general expenses.
Previous report
Cash provided by operations was $1.8 billion during the nine months ended September 30, 2025 compared to $2.4 billion in the prior year. The decrease was driven by lower operating profit and timing impacts to working capital, including incremental restructuring and IFP Transaction separation cost payments of approximately $120.
Previous report
We maintain a $2.0 billion revolving credit facility which expires in June 2028 and a $750 revolving credit facility which expires in May 2026. These facilities, currently unused, support our commercial paper program and would provide liquidity in the event our access to the commercial paper markets is unavailable for any reason.
Previous report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are expecting favorable cash tax impacts in the near and medium term as a result of the OBBBA. During the three months ended September 30, 2025, provisions within the OBBBA increased the Noncurrent deferred tax liability by approximately $200 primarily due to the valuation allowance recorded in the quarter and changes providing for the immediate deduction of previously capitalized research and development expenditures.
Previous report
We have evaluated the effects of the Global anti-Base Erosion rules set forth by the Organization for Economic Co-Operation and Development, referred to as “Pillar 2,” which establishes a global minimum corporate tax rate of 15%. We have (1) determined that Pillar 2 legislation has been enacted in one or more of the jurisdictions in which the Company operates and the Company is within the scope of such legislation, (2) assessed such enacted legislation and, as applicable, the Transitional Safe Harbor provisions for Pillar 2 that apply, and (3) determined the impact will be immaterial to our financial results. We intend to file a Qualified Country-by-Country Report for the current year for each jurisdiction in which we intend to rely on the Transitional Country-by-Country Reporting Safe Harbor provisions.
Previous report
•U.S. Tax Reform Related Matters (OBBBA) - In the third quarter of 2025, we recognized a valuation allowance on prior year U.S. foreign tax credits as a result of provisions within the OBBBA that impact our ability to use credits.
Previous report
•IFP Repatriated Earnings – In 2025, in connection with the IFP Transaction, we recognized a deferred tax liability for certain permanently reinvested earnings from the IFP Business that are expected to be repatriated prior to the close of the transaction.
Previous report
•Sale of PPE business - In 2024, we recognized a gain related to the sale of our PPE business. See Item 1, Note 4 to the Unaudited Interim Condensed Consolidated Financial Statements for details.
Previous report
•Impairment of intangible assets - In 2024, we recognized charges related to the impairment of certain intangible assets related to Softex and Thinx. See Item 1, Note 5 to the Unaudited Interim Condensed Consolidated Financial Statements for details.
Reworded paragraphs (31)
Previous wording
This Management's Discussion and Analysis ("MD&A") of Financial Condition and Results of Operations is intended to provide investors with an understanding of our recent performance, financial condition, cash flows and future prospects. The following MD&A should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2024 and the Unaudited Interim Condensed Consolidated Financial Statements and related notes contained in this Quarterly Report on Form 10-Q. Our analysis compares results for thethree and nine months ended September 30, 2025 to the same period in 2024. As discussed in the Notes to the Unaudited Interim Condensed Consolidated Financial Statements, the results and related assets and liabilities of the IFP Business are reported as discontinued operations. As a result, unless specifically stated, all discussions included below reflect continuing operations for all periods presented. Amounts are reported in millions of dollars, except per share amounts, unless otherwise noted. The following will be discussed and analyzed:
Current wording
This Management's Discussion and Analysis ("MD&A") of Financial Condition and Results of Operations is intended to provide investors with an understanding of our recent performance, financial condition, cash flows and future prospects. The following MD&A should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 and the Unaudited Interim Condensed Consolidated Financial Statements and related notes contained in this Quarterly Report on Form 10-Q. Our analysis compares results for thethree months ended March 31, 2026 to the same period in 2025. As discussed in the Notes to the Unaudited Interim Condensed Consolidated Financial Statements, the results and related assets and liabilities of the IFP Business are reported as discontinued operations. As a result, unless specifically stated, all discussions included below reflect continuing operations for all periods presented. Any reference to "N.M." indicates the calculation is not meaningful. Amounts are reported in millions of dollars, except per share amounts, unless otherwise noted. The following will be discussed and analyzed:
Previous wording
Throughout this MD&A, we refer to financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S., or GAAP, and are therefore referred to as non-GAAP financial measures. We believe these measures provide our investors with additional information about our underlying results and trends, as well as insight to some of the financial measures used to evaluate management. For additional information and reconciliations to the most closely comparable financial measures presented in our Condensed Consolidated Financial Statements, which are calculated in accordance with U.S. GAAP, see "Summary of Non-GAAP Financial Measures" below.
Current wording
Throughout this MD&A, we refer to financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. ("GAAP"), and are therefore referred to as non-GAAP financial measures. We believe these measures provide our investors with additional information about our underlying results and trends, as well as insight to some of the financial measures used to evaluate management. For additional information and reconciliations to the most closely comparable financial measures presented in our Unaudited Interim Condensed Consolidated Financial Statements, which are calculated in accordance with GAAP, see "Summary of Non-GAAP Financial Measures" below.
Previous wording
On June 5, 2025, we announced that the Company will form a joint venture with Suzano S.A. ("Suzano") and Suzano International Holding B.V., a wholly-owned subsidiary of Suzano ("Buyer"), comprised of substantially all the operations of the Company's former IFP segment (the "IFP Business"). To facilitate this transaction, we entered into an Equity and Asset Purchase Agreement (the "Purchase Agreement") with Buyer, pursuant to which we will, among other things, effectuate a reorganization through the transfer of certain assets, liabilities and equity interests of the IFP Business to Kimberly-Clark IFP NewCo B.V., an indirect wholly-owned subsidiary of the Company (the "Joint Venture"). At the time of closing, which is expected to take place in mid-2026 and will only take place following the satisfaction of consultation requirements and customary closing conditions, including obtaining required regulatory approvals, Buyer will acquire a 51% interest in the Joint Venture for a purchase price of approximately $1.7 billion, subject to certain closing adjustments set forth in the Purchase Agreement, and we will retain a 49% equity interest (the "IFP Transaction"). As a result, the results of operations and applicable assets and liabilities of the IFP Business are reported as discontinued operations in the Company's financial statements for all periods presented and the Company has ceased depreciating and amortizing the long-lived assets of the IFP Business. See Item 1, Notes 1 and 3 to the Unaudited Interim Condensed Consolidated Financial Statements for further details.
Current wording
On June 5, 2025, we announced that the Company will form a joint venture with Suzano S.A. ("Suzano") and Suzano International Holding B.V., a wholly-owned subsidiary of Suzano ("Buyer"), comprised of substantially all the operations of the Company's former IFP segment (the "IFP Business"). At the time of closing, which is expected to take place in mid-2026 and will only take place following the satisfaction of consultation requirements and customary closing conditions, including obtaining required regulatory approvals, Buyer will acquire a 51% interest in the joint venture for a purchase price of approximately $1.7 billion, subject to certain closing adjustments set forth in the Equity and Asset Purchase Agreement, and we will retain a 49% equity interest (the "IFP Transaction"). As a result, the results of operations and applicable assets and liabilities of the IFP Business are reported as discontinued operations in the Company's financial statements for all periods presented. See Item 1, Notes 1 and 3 to the Unaudited Interim Condensed Consolidated Financial Statements for further details.
Previous wording
As a result of the IFP Transaction discussed above and the changes to our reportable segments effective in the fourth quarter of 2024 (refer to our Annual Report on Form 10-K for further details), the Company's continuing operations are now organized into two reportable segments defined by geographic region: North America ("NA")
Current wording
As a result of the IFP Transaction discussed above, the Company's continuing operations are now organized into two reportable segments defined by geographic region: North America ("NA") and International Personal Care ("IPC"). The results of the IFP Business are excluded from segment results for all periods presented. Segments are described in greater detail in Item 1, Note 9 to the Unaudited Interim Condensed Consolidated Financial Statements.
Previous wording
The 2024 Transformation Initiative is designed to sharpen our strategic focus through a new operating model that leverages three synergistic forces:
Current wording
The 2024 Transformation Initiative is designed to sharpen our strategic focus through a new operating model and strategy that leverages three synergistic pillars:
Previous wording
•Accelerating pioneering innovation to capture significant growth available in our categories by investing in science and technology to satisfy unmet and evolving consumer needs;
Current wording
•Accelerating pioneering innovation to capture significant growth available in our product categories by investing in science-based and proprietary technology to solve unmet and evolving consumer needs, and delivering breakthrough storytelling to drive category participation and brand love;
Previous wording
•Optimizing our margin structure to deliver superior consumer propositions and implement initiatives and deploy technology and data analytics designed to create a fast, adaptable, integrated supply chain with greater visibility that can deliver continuous improvement; and
Current wording
•Optimizing our margin structure to deliver superior consumer propositions at every rung of the good, better, best ladder, and implement initiatives and deploy technology and data analytics designed to create a fast, adaptable, integrated supply chain with greater visibility that can deliver continuous improvement; and
Previous wording
•Wiring our organization for growth to drive agility, speed, and focused execution that extends our competitive advantages further into the future and improves the efficiency of our corporate and regional overhead cost structures.
Current wording
•Wiring our organization for growth to drive agility, speed, and focused execution that extends our competitive advantages further into the future.
Previous wording
The transformation is expected to impact our organization in all major geographies, and workforce reductions are expected to be in the range of 4% to 5%. Certain actions under the 2024 Transformation Initiative are being finalized for implementation, and accounting for such actions will commence when the actions are authorized for execution. The 2024 Transformation Initiative is expected to be completed by the end of 2026. Total pre-tax savings are expected to be $3.0 billion in gross productivity; inclusive of input cost and manufacturing cost savings, and $200 in selling, general and administrative expenses. Total costs are anticipated to be approximately $1.5 billion pre-tax. Cash costs are expected to be approximately 60% of that amount, primarily related to workforce reductions and other program costs. Expected non-cash charges are primarily related to incremental depreciation and asset write-offs, including losses associated with the expected exit of certain markets. For the three months ended September 30, 2025 and 2024, total 2024 Transformation Initiative charges were $62 pre-tax ($50 after-tax) and $124 pre-tax ($106 after-tax), respectively. For the nine months ended September 30, 2025 and 2024, total 2024 Transformation Initiative charges were $261 pre-tax ($222 after-tax), and $359 pre-tax ($257 after-tax), respectively. Through September 30, 2025, cumulative pre-tax charges for the 2024 Transformation Initiative were $718 ($561 after-tax).
Current wording
The transformation is expected to impact our organization in all major geographies, and workforce reductions are expected to be in the range of 4% to 5%. Certain actions under the 2024 Transformation Initiative are being finalized for implementation, and accounting for such actions will commence when the actions are authorized for execution. The 2024 Transformation Initiative is expected to be completed by the end of 2026. Total pre-tax savings are expected to be $3.0 billion in gross productivity; inclusive of input cost and manufacturing cost savings, and $200 in selling, general and administrative expenses. Total costs are anticipated to be approximately $1.5 billion pre-tax. Cash costs are expected to be approximately 60% of that amount, primarily related to workforce reductions and other program costs. Expected non-cash charges are primarily related to incremental depreciation and asset write-offs, including losses associated with the expected exit of certain markets. For the three months ended March 31, 2026 and 2025, total 2024 Transformation Initiative charges were $51 pre-tax ($32 after-tax) and $77 pre-tax ($77 after-tax), respectively. Through March 31, 2026, cumulative pre-tax charges for the 2024 Transformation Initiative were $859 ($666 after-tax), and approximately 90% of the total expected selling, general and administrative expense savings have been realized or approved for action program to date.
Previous wording
(c) Impact of the sale of the PPE business, the exit of the Company's private label diaper business in the United States, and other exited businesses and markets in conjunction with the 2024 Transformation Initiative.
Current wording
(c) Impact of the exit of the Company's private label diaper business in the United States and other exited businesses and markets in conjunction with the 2024 Transformation Initiative.
Previous wording
Net sales of $4.2 billion for the three months ended September 30, 2025 were in line with the prior year, as divestitures and business exits were offset by organic sales growth. Organic sales increased 2.5% driven by volume gains of 2.4%, while price and mix were relatively flat compared to the prior year.
Current wording
Net sales of $4.2 billion for the three months ended March 31, 2026 increased 2.7% primarily driven by organic sales growth and favorable currency impacts, partially offset by divestitures and business exits. Organic sales increased 2.5% primarily from volume gains of 2.6%.
Previous wording
Gross profit of $4.5 billion for the nine months ended September 30, 2025 decreased 8.0%, while gross margin of 36.0% decreased 210 basis points. Gross margin in the current and prior year included approximately 140 basis points and 60 basis points, respectively, for charges related to the 2024 Transformation Initiative, primarily for incremental depreciation expense, workforce reductions and asset write-offs. Excluding these charges, adjusted gross margin decreased 130 basis points to 37.4% primarily due to unfavorable pricing net of cost inflation, including tariff impacts, and supply chain related investments, partially offset by gross productivity savings from integrated margin management of approximately $325.
Current wording
Gross profit of $1.5 billion for the three months ended March 31, 2026 increased 1.7%, while gross margin of 36.8% decreased 40 basis points. Gross margin in the current and prior year included approximately 110 basis points and 130 basis points, respectively, of charges related to the 2024 Transformation Initiative, primarily for incremental depreciation expense. Excluding these charges, adjusted gross profit was $1.6 billion, an increase of 0.9%, while adjusted gross margin was 37.9%, a decrease of 60 basis points. The decrease was primarily due to supply chain related investments and unfavorable pricing net of cost inflation, partially offset by gross productivity savings from integrated margin management of approximately $115.
Previous wording
Income from Continuing Operations for the three and nine months ended September 30, 2025 was $344 and $1.3 billion, respectively, compared to $823 and $1.8 billion in the prior year. Apart from the operating profit drivers discussed above, the decrease was primarily related to a higher effective tax rate and lower income from equity companies.
Current wording
Income from Continuing Operations for the three months ended March 31, 2026 was $574 compared to $470 in the prior year. The increase was primarily related to the settlement of insurance claims from a previous acquisition, coupled with higher income from equity companies, partially offset by higher income tax expense.
Previous wording
Our share of net income of equity companies for the three and nine months ended September 30, 2025 was $46 and $137, respectively, compared to $48 and $172 for the prior year. The decrease for the nine months ended was primarily driven by Kimberly-Clark de Mexico, S.A.B. de C.V., due to unfavorable foreign currency effects, higher inputs costs and lower volumes, partially offset by pricing, productivity savings and lower general and administrative expenses.
Current wording
Our share of net income of equity companies for the three months ended March 31, 2026 was $53 compared to $44 in the prior year. The increase was primarily driven by Kimberly-Clark de Mexico, S.A.B. de C.V., due to favorable foreign currency impacts and productivity savings, partially offset by higher inputs costs.
Previous wording
Income from discontinued operations, net of income taxes for the three months ended September 30, 2025 was $110 compared to $92 in the prior year. The increase was driven by a reduction in depreciation and amortization expense of $30, partially offset by pre-tax separation costs of $17.
Current wording
Income from discontinued operations, net of income taxes for the three months ended March 31, 2026 was $101 compared to $103 in the prior year. Current year results included pre-tax separation costs of $32 that were offset by the cessation of depreciation and amortization expense of approximately $30.
Previous wording
(c) Impact of the sale of the PPE business, the exit of the Company's private label diaper business in the United States, and other exited businesses and markets in conjunction with the 2024 Transformation Initiative.
Current wording
(c) Impact of the exit of the Company's private label diaper business in the United States and other exited businesses and markets in conjunction with the 2024 Transformation Initiative.
Previous wording
Net sales of $2.7 billion for the three months ended September 30, 2025 decreased 0.8% due to the exit of the private label diaper business in the US, partially offset by organic sales growth. Organic sales increased 2.7% primarily from volume gains of 2.6%, driven by Baby & Child Care, Adult & Fem Care and Professional categories. Net sales of $8.1 billion for the nine months ended September 30, 2025 decreased 2.2% from a combination of the sale of the PPE business and the exit of the private label diaper business in the US, partially offset by organic sales growth. Organic sales increased 2.1% driven by volume gains of 2.6%, with all categories growing volume, partially offset by lower pricing and mix.
Current wording
Net sales of $2.7 billion for the three months ended March 31, 2026 decreased 0.6%, as the exit of the private label diaper business in the US was partially offset by organic sales growth. Organic sales increased 1.8% primarily from volume gains of 1.9%, driven by Baby & Child Care, Family Care and Professional categories.
Previous wording
Net sales of $1.4 billion for the three months ended September 30, 2025 increased 1.9% primarily due to a 2.1% increase in organic sales. Organic sales benefited from volume and mix gains of 2.0% and 1.6%, respectively, driven by China, South Korea, Australia and Indonesia, partially offset by lower pricing. Net sales of $4.3 billion for the nine months ended September 30, 2025 decreased 2.5% primarily driven by unfavorable currency impacts, partially offset by organic sales growth of 0.8%. The components of organic sales are consistent with the drivers discussed above.
Current wording
Net sales of $1.5 billion for the three months ended March 31, 2026 increased 9.1% primarily driven by favorable currency impacts of 5.2% and organic sales growth of 4.0%. Organic sales benefited from volume and mix gains of 4.1% and 1.4%, respectively, primarily in China, Indonesia, South Korea and Brazil, partially offset by lower pricing.
Previous wording
Operating profit for the three months ended September 30, 2025 of $214 increased 6.5% driven by gross productivity savings, volume and mix gains and lower marketing, research and general expenses, partially offset by unfavorable pricing net of cost inflation. Operating profit for the nine months ended September 30, 2025 of $597 decreased 9.7%, primarily due to unfavorable pricing net of cost inflation, supply chain related investments and currency impacts, partially offset by gross productivity savings and volume and mix gains.
Current wording
Operating profit for the three months ended March 31, 2026 of $245 increased 21.9% driven by gross productivity savings, volume and mix gains, favorable currency impacts and lower marketing, research and general expenses, partially offset by unfavorable pricing net of cost inflation.
Previous wording
Cash used for investing was $650 during the nine months ended September 30, 2025 compared to cash provided by investing of $94 in the prior year. This change is primarily due to proceeds from asset and business dispositions of $649 in 2024, primarily reflecting the sale of our PPE business. During the nine months ended September 30, 2025, our capital spending was $741 compared to $512 in the prior year. We anticipate that full year capital spending will be approximately $1.0 to $1.2 billion, including incremental spending from the 2024 Transformation Initiative.
Current wording
Cash used for investing was $355 during the three months ended March 31, 2026 compared to $119 in the prior year, primarily reflecting higher planned capital spending. During the three months ended March 31, 2026, our capital spending was $424 compared to $204 in the prior year. We anticipate that full year capital spending will be approximately $1.3 billion, including incremental spending from the 2024 Transformation Initiative.
Previous wording
Cash used for financing was $1.6 billion during the nine months ended September 30, 2025 compared to $2.5 billion in the prior year. This decrease was primarily due to decreased share repurchases, coupled with an increase in U.S. commercial paper. During the nine months ended September 30, 2025, we repurchased 1.1 million shares of our common stock pursuant to our publicly announced share repurchase programs at a total cost of $140 through a broker in the open market.
Current wording
Cash used for financing was $527 during the three months ended March 31, 2026 compared to $683 in the prior year. This decrease was primarily due to an increase in U.S. commercial paper borrowings, partially offset by higher debt repayments in the current year. During the three months ended March 31, 2026, we did not repurchase any shares of common stock.
Previous wording
Our short-term debt, which consists of U.S. commercial paper with original maturities up to 90 days and/or other short-term debt issued by non-U.S. subsidiaries, was $421 as of September 30, 2025 (included in Debt payable within one year on the Condensed Consolidated Balance Sheets). The average month-end balance of short-term debt for the nine months ended September 30, 2025 was $257. These short-term borrowings provide supplemental funding to support our operations. The level of short-term debt generally fluctuates depending upon the amount of operating cash flows and the timing of customer receipts and payments for items such as dividends and income taxes.
Current wording
Our short-term debt, which consists of U.S. commercial paper with original maturities up to 90 days and/or other short-term debt issued by non-U.S. subsidiaries, was $595 as of March 31, 2026 (included in Debt payable within one year on the Condensed Consolidated Balance Sheets). The average month-end balance of short-term debt for the three months ended March 31, 2026 was $711. These short-term borrowings provide supplemental funding to support our operations. The level of short-term debt generally fluctuates depending upon the amount of operating cash flows and the timing of customer receipts and payments for items such as pension contributions, dividends and income taxes.
Previous wording
As of September 30, 2025 and December 31, 2024, total debt from continuing operations was $7.3 billion and $7.4 billion, respectively.
Current wording
As of March 31, 2026 and December 31, 2025, total debt from continuing operations was $7.1 billion and $7.2 billion, respectively.
Previous wording
Türkiye, effective tax rate, contingencies and anticipated transactions of Kimberly-Clark, including dividends, share repurchases and pension contributions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are based upon management's expectations and beliefs concerning future events impacting Kimberly-Clark. There can be no assurance that these future events will occur as anticipated or that our results will be as estimated. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to publicly update them.
Current wording
Certain matters contained in this report concerning our plans and expectations regarding the pending Kenvue Acquisition (referred to below as the "pending mergers" or the "mergers") and the pending IFP Transaction, the business outlook, including raw material, energy and other input costs, the anticipated charges and savings from the 2024 Transformation Initiative, cash flow and uses of cash, growth initiatives, innovations, marketing and other spending, net sales, anticipated currency rates and exchange risks, including the impact in Argentina and Türkiye, effective tax rate, contingencies and anticipated transactions of Kimberly-Clark, including dividends, share repurchases and pension contributions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are based upon management's expectations and beliefs concerning future events impacting Kimberly-Clark. There can be no assurance that these future events will occur as anticipated or that our results will be as estimated. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to publicly update them.
Previous wording
The assumptions used as a basis for the forward-looking statements include many estimates that, among other things, depend on the achievement of future cost savings and projected volume increases. In addition, many factors outside our control, including risks and uncertainties around the pending IFP Transaction (including risks related to delays or failure to complete the proposed transaction, the incurrence of significant transaction and separation costs, adverse market reactions, regulatory or legal challenges, and operational disruptions), risks that we are not able to realize the anticipated benefits of the 2024 Transformation Initiative (including risks related to disruptions to our business or operations or related to any delays in implementation), war in Ukraine (including the related responses of consumers, customers, and suppliers and sanctions issued by the U.S., the European Union, Russia or other countries), government trade or similar regulatory actions (including current and potential trade and tariff actions affecting the countries where we operate and the resulting negative impacts on our supply chain, commodity costs, and consumer spending), pandemics, epidemics, fluctuations in foreign currency exchange rates, the prices and availability of our raw materials, supply chain disruptions, disruptions in the capital and credit markets, counterparty defaults (including customers, suppliers and financial institutions with which we do business), failure to realize the expected benefits or synergies from our acquisition and disposition activity, impairment of goodwill and intangible assets and our projections of operating results and other factors that may affect our impairment testing, changes in customer preferences, severe weather conditions, regional instabilities and hostilities (including the war in Israel), potential competitive pressures on selling prices for our products, energy costs, general economic and political conditions globally and in the markets in which we do business, as well as our ability to maintain key customer relationships, could affect the realization of these estimates.
Current wording
The assumptions used as a basis for the forward-looking statements include many estimates that, among other things, depend on the successful completion of the mergers and the achievement of future cost savings and projected volume increases. In addition, many factors outside our control, including risks and uncertainties around the pending mergers (including the risk that the anticipated benefits and synergies of the mergers may not be realized when expected or at all, the terms and scope of the expected financing in connection with the mergers may prove to be less favorable than currently expected, that the mergers may not be completed in a timely manner or at all and the risk of litigation related to the mergers), the pending IFP Transaction (including risks related to delays or failure to complete the proposed transaction, the incurrence of significant transaction and separation costs, adverse market reactions, regulatory or legal challenges, and operational disruptions), risks that we are not able to realize the anticipated benefits of the 2024 Transformation Initiative (including risks related to disruptions to our business or operations or related to any delays in implementation), war in Ukraine (including the related responses of consumers, customers, and suppliers and sanctions issued by the U.S., the European Union, Russia or other countries), government trade or similar regulatory actions (including current and potential trade and tariff actions affecting the countries where we operate and the resulting negative impacts on our supply chain, commodity costs, and consumer spending), pandemics, epidemics, fluctuations in foreign currency exchange rates, the prices and availability of our raw materials, supply chain disruptions, disruptions in the capital and credit markets, counterparty defaults (including customers, suppliers and financial institutions with which we do business), failure to realize the expected benefits or synergies from our acquisition and disposition activity, impairment of goodwill and intangible assets and our projections of operating results and other factors that may affect our impairment testing, changes in customer preferences, severe weather conditions, regional instabilities and hostilities (including the war in Iran), potential competitive pressures on selling prices for our products, energy costs, general economic and political conditions globally and in the markets in which we do business, as well as our ability to maintain key customer relationships, could affect the realization of these estimates.
Previous wording
The following provides the reconciliation of the non-GAAP financial measures provided in this report to the most closely related GAAP measure. These measures include: Organic Sales Growth, Adjusted Gross Profit, Adjusted Operating Profit, Adjusted Earnings per Share, and Adjusted Effective Tax Rate. All discussions regarding non-GAAP financial measures reflect results from our continuing operations for all periods presented.
Current wording
The following provides the reconciliation of the non-GAAP financial measures provided in this report to the most closely related GAAP measure. These measures include: Organic Sales Growth, Adjusted Gross Profit, Adjusted
Previous wording
•Organic Sales Growth is defined as the change in Net Sales, as determined in accordance with U.S. GAAP, excluding the impacts of currency translation and divestitures and business exits.
Current wording
•Organic Sales Growth is defined as the change in Net Sales, as determined in accordance with GAAP, excluding the impacts of currency translation and divestitures and business exits.
Previous wording
•Adjusted Gross and Operating Profit, Adjusted Earnings per Share, and Adjusted Effective Tax Rate are defined as Gross Profit, Operating Profit, Diluted Earnings per Share, and Effective Tax Rate, respectively, as determined in accordance with U.S. GAAP, excluding the impacts of certain items that management believes do not reflect our underlying operations, and which are discussed in further detail below.
Current wording
•Adjusted Gross and Operating Profit, Adjusted Earnings per Share, and Adjusted Effective Tax Rate are defined as Gross Profit, Operating Profit, Diluted Earnings per Share, and Effective Tax Rate, respectively, as determined in accordance with GAAP, excluding the impacts of certain items that management believes do not reflect our underlying operations, and which are discussed in further detail below.
Previous wording
We use these non-GAAP financial measures to assist in comparing our performance on a consistent basis for purposes of business decision making by removing the impact of certain items that we do not believe reflect our underlying and ongoing operations. We believe that presenting these non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating our results. We believe that the presentation of these non-GAAP financial measures, when considered together with the corresponding U.S.
Current wording
We use these non-GAAP financial measures to assist in comparing our performance on a consistent basis for purposes of business decision making by removing the impact of certain items that we do not believe reflect our underlying and ongoing operations. We believe that presenting these non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating our results. We believe that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliation to those measures, provides investors with additional understanding of the factors and trends affecting our business than could be obtained absent these disclosures.
Previous wording
The following tables provide a reconciliation of Organic Sales Growth from continuing operations:
Current wording
The following table provides a reconciliation of Organic Sales Growth from continuing operations:
Previous wording
The following tables provide a reconciliation of the continuing operations Adjusted Effective Tax Rate:
Current wording
The following table provides a reconciliation of the continuing operations Adjusted Effective Tax Rate:
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Operating Profit, Adjusted Earnings per Share, and Adjusted Effective Tax Rate. All discussions regarding non-GAAP financial measures reflect results from our continuing operations for all periods presented.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Segments are described in greater detail in Item 1, Note 11 to the Unaudited Interim Condensed Consolidated Financial Statements.
Previous report — wording carried elsewhere
Gross profit of $1.5 billion for the three months ended September 30, 2025 decreased 4.5%, while gross margin of 36.0% decreased 170 basis points. Gross margin in the current and prior year included approximately 80 basis points for charges related to the 2024 Transformation Initiative, primarily for incremental depreciation expense, workforce reductions and asset write-offs. The decline in gross profit was primarily due to unfavorable pricing net of cost inflation, including tariff impacts, and supply chain related investments, partially offset by gross productivity savings from integrated margin management of approximately $125.
Previous report — wording carried elsewhere
Certain matters contained in this report concerning the business outlook, including raw material, energy and other input costs, our plans and expectations regarding the pending IFP Transaction, the anticipated charges and savings from the 2024 Transformation Initiative, cash flow and uses of cash, growth initiatives, innovations, marketing and other spending, net sales, anticipated currency rates and exchange risks, including the impact in Argentina and
Previous report — wording carried elsewhere
GAAP financial measures and the reconciliation to those measures, provides investors with additional understanding of the factors and trends affecting our business than could be obtained absent these disclosures.