KIMBERLY CLARK CORP
For the period ended Sep 30, 2026. Filed Nov 5, 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.
Sep 30, 2026 · Filed Nov 5, 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 2026-06-30; filed 2026-08-04.
0001628280-26-052348
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001628280-26-070754
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 110 previous paragraphs and 114 current paragraphs.
65 unchanged; 31 reworded; 18 added; 13 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 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 (18)
Current report
Acquisition of Kenvue, Inc.
Current report
On November 2, 2026, we completed the Kenvue Acquisition for Cash Consideration of approximately $6.7 billion. In respect of the Kenvue common stock issued and outstanding immediately prior to the effective time of the Kenvue Acquisition, we have delivered or caused to be delivered approximately 281.1 million shares of K-C common stock to Kenvue shareholders. The Cash Consideration was funded through a combination of cash on hand, proceeds from new debt issuance, and borrowings under our commercial paper program.
Current report
Kenvue Integration Program
Current report
On October 30, 2026, in connection with the Kenvue Acquisition, our Board of Directors approved the Kenvue Integration Program (the "Program") which is intended to achieve certain operating profit synergies by 2030. Actions contemplated under the Program commenced on November 2, 2026 and are expected to be completed by December 31, 2029. The Program is expected to result in cumulative pre-tax charges of approximately $3.1 billion ($2.5 billion cash and $0.6 billion non-cash) over this period, with cash charges primarily related to supply chain network optimization (approximately $800), enterprise resource planning and technology integration (approximately $600), workforce optimization (approximately $400), advisory services (approximately $400) and program management and other restructuring and integration costs (approximately $300). Non-cash charges are primarily related to supply chain network optimization.
Current report
Net sales of $4.1 billion for the three months ended September 30, 2026 were relatively flat compared to the prior year, as favorable impacts from sales recognized under the Supply Agreements with the Arbex Joint Venture and favorable currency impacts were offset by a decline in organic sales. Organic sales decreased 1.3%, primarily driven by lower pricing, while volumes were slightly down 0.3% driven by an approximately 270 basis point headwind from the China social media disruption.
Current report
Net sales of $12.5 billion for the nine months ended September 30, 2026 increased 1.0% primarily driven by favorable currency impacts. Organic sales increased 0.3%, as volume and mix gains were partially offset by lower pricing.
Current report
Adjusted operating profit for the three months ended September 30, 2026 decreased 0.9% driven by unfavorable pricing net of cost inflation and headwinds from the China social media disruption of approximately 530 basis points, partially offset by lower marketing, research and general expenses.
Current report
Adjusted operating profit for the nine months ended September 30, 2026 increased 3.0%, primarily driven by favorable currency impacts, partially offset by headwinds from the China social media disruption of approximately 210 basis points.
Current report
Income from Continuing Operations for the three and nine months ended September 30, 2026 was $405 and $1.4 billion, respectively, compared to $344 and $1.3 billion in the prior year, driven primarily by changes in operating profit discussed above and lower income tax expense.
Current report
The effective tax rate for the three and nine months ended September 30, 2026 was 20.2% and 27.5%, respectively, compared to 45.4% and 30.6% in the prior year. The decreases in each period were primarily driven by incremental tax charges in the prior year as a result of the One Big Beautiful Bill Act ("OBBBA") relating to a valuation allowance on U.S. foreign tax credits and benefits in the current year from certain tax initiatives. The adjusted effective tax rate for the three and nine months ended September 30, 2026 was 19.5% and 22.3%, respectively, compared to 26.5% and 22.6% in the prior year.
Current report
Our share of net income of equity companies for the three and nine months ended September 30, 2026 was $29 and $137, respectively, compared to $46 and $137 in the prior year. The decrease for the three months ended September 30, 2026 was primarily driven by our share of the Arbex Joint Venture's net loss of $20, which was inclusive of $51 pre-tax ($38 after-tax) of acquisition accounting and restructuring charges. This loss was offset in the year to date period by higher earnings from Kimberly-Clark de Mexico, S.A.B. de C.V., primarily reflecting favorable currency impacts.
Current report
Net sales of $1.4 billion for the three months ended September 30, 2026 decreased 2.8%, as transactions with the Arbex Joint Venture under the Supply Agreements and favorable currency impacts were more than offset by a decline in organic sales. Organic sales decreased 4.6% driven by lower volumes, as growth in South Korea, Indonesia and Enterprise Markets was more than offset by headwinds of approximately 770 basis points from the China social media disruption. Net sales of $4.4 billion for the nine months ended September 30, 2026 increased 3.4%, primarily driven by favorable currency impacts of 3.0%. Organic sales growth was relatively flat compared to the prior year, as volume-plus-mix gains of 0.7%, driven by growth in South Korea, Indonesia, Brazil and Enterprise Markets, partially offset by headwinds of approximately 300 basis points from the China social media disruption, were largely offset by lower pricing.
Current report
Operating profit for the three and nine months ended September 30, 2026 of $144 and $575, decreased 32.7% and 3.7%, respectively. The decrease for the three and nine months ended September 30, 2026 was primarily driven by unfavorable pricing net of cost inflation and impacts from the China social media disruption of approximately 16.8% and 7.4%, respectively, partially offset by gross productivity savings, favorable currency impacts and lower advertising spend.
Current report
On October 29, 2026, we completed a private offering (the "Offering") of senior unsecured notes (the "Notes") in an aggregate principal amount of $4.9 billion. The Notes consist of $750 of 5.10% Notes due 2028, $1.0 billion of 5.30% Notes due 2029, $1.25 billion of 5.45% Notes due 2031, $750 of 5.65% Notes due 2034 and $1.15 billion of 5.80% Notes due 2036. Subsequently on November 2, 2026, we completed the Kenvue Acquisition for Cash Consideration of approximately $6.7 billion. In respect of the Kenvue common stock issued and outstanding immediately prior to the effective time of the Kenvue Acquisition, we have delivered or caused to be delivered approximately 281.1 million shares of K-C common stock to Kenvue shareholders. We used the net proceeds from the Offering, together with cash on hand and borrowings under our commercial paper program of approximately $1.0 billion, to fund the Cash Consideration and related fees and expenses of the Kenvue Acquisition.
Current report
Additionally, we completed the previously announced exchange offers and consent solicitations for Kenvue's $7.0 billion aggregate principal amount of outstanding senior notes (the "Kenvue Notes"). Holders of Kenvue Notes validly tendered approximately $6.4 billion, or approximately 91.1%, of the Kenvue Notes and, on November 4, 2026, we issued a like-amount of new senior notes. The aggregate principal amount of Kenvue Notes that remained outstanding following the settlement of the exchange offers was approximately $0.6 billion and will be reflected in our consolidated total debt following the acquisition. See Item 1, Note 12 to the Unaudited Interim Condensed Consolidated Financial Statements for further information regarding the Offering and exchange of Kenvue Notes.
Current report
•Unrealized (Gains) Losses on Commodity Hedges - Mark‑to‑market impacts from undesignated commodity derivatives utilized to mitigate price volatility for forecasted transactions. These mark-to-market impacts are excluded until the related gains and losses are realized in order to facilitate comparisons of our underlying operating performance across periods.
Current report
•Equity Company Adjustments - Kimberly-Clark's proportionate share of charges recognized by the Arbex Joint Venture formed as part of the completion of the IFP Transaction for certain acquisition-related accounting impacts and restructuring charges.
Current report
•U.S. Tax Reform Related Matters (OBBBA) - In 2025, we recognized a valuation allowance on prior year U.S. foreign tax credits as a result of provisions within the One Big Beautiful Bill Act ("OBBBA") that impact our ability to use credits.
Removed paragraphs (13)
Previous report
Pending Acquisition of Kenvue, Inc.
Previous report
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 report
Net sales of $4.2 billion for the three months ended June 30, 2026 increased 0.6% primarily driven by favorable currency impacts, while organic sales growth was relatively flat compared to the prior year, including an approximately 50 basis point negative impact from the China social media disruption.
Previous report
Net sales of $8.4 billion for the six months ended June 30, 2026 increased 1.6% primarily driven by organic sales growth and favorable currency impacts, partially offset by divestitures and business exits. Organic sales increased 1.2% primarily from volume gains of 1.3%.
Previous report
Gross and Operating Profits
Previous report
Adjusted operating profit for the three and six months ended June 30, 2026 increased 6.2% and 4.9%, respectively, driven by the increase in adjusted gross profit discussed above and favorable currency impacts. These gains were partially offset by impacts of approximately 210 basis points and 340 basis points for the three and six months ended June 30, 2026, respectively, from a combination of business exits and the China social media disruption.
Previous report
Income from Continuing Operations for the three months ended June 30, 2026 was $410 compared to $444 in the prior year, as the increase in operating profit drivers discussed above was more than offset by higher income tax expense.
Previous report
Income from Continuing Operations for the six months ended June 30, 2026 was $984 compared to $914 in the prior year, as the increase in operating profit drivers discussed above, coupled with higher income from equity companies, was partially offset by higher income tax expense.
Previous report
Our share of net income of equity companies for the three and six months ended June 30, 2026 was $55 and $108, respectively, compared to $47 and $91 in the prior year. The increases for each period were primarily due to favorable currency impacts and pricing net of cost inflation, partially offset by higher general and administrative expenses.
Previous report
The effective tax rate for the three and six months ended June 30, 2026 was 37.9% and 30.3%, respectively, compared to 22.6% and 23.1% in the prior year. The adjusted effective tax rate for the three and six months ended June 30, 2026 was 21.1% and 23.6%, respectively, compared to 20.9% and 20.8% in the prior year. The increase was driven by the lapping of benefits from the resolution of certain tax matters in the first half of 2025.
Previous report
Operating profit for the three and six months ended June 30, 2026 of $725 and $1.3 billion increased 10.7% and 1.1%, respectively, driven by one-time tariff refunds and gross productivity savings, partially offset by impacts from business exits of 110 basis points and 310 basis points for the three and six months ended June 30, 2026, respectively, and incremental advertising spend.
Previous report
Net sales of $1.5 billion for the three months ended June 30, 2026 increased 4.0% primarily driven by favorable currency impacts of 3.1% and organic sales growth of 1.0%. Organic sales growth, which included a 140 basis point headwind from the China social media disruption, was driven by volume plus mix gains of 1.2%, reflecting growth within multiple categories, namely diapers and pants. Net sales of $3.0 billion for the six months ended June 30, 2026 increased 6.5%, primarily driven by favorable currency impacts of 4.1% and organic sales growth of 2.5%. Organic sales growth was driven by volume and mix gains of 2.2% and 1.2%, respectively, partially offset by lower pricing.
Previous 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.
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, 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 and six months ended June 30, 2026 to the same periods 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:
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 and nine months ended September 30, 2026 to the same periods 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
During the second quarter of 2026, false allegations regarding the quality of certain diaper brands in the China market emerged and were carried across social media channels. Independent testing conducted by a government-certified third party confirmed the quality and safety of our products, refuting the false allegations. While we are effectively navigating the situation, the impact from the spread of false claims across social media significantly impacted our diaper sales in China in the second quarter of 2026 and is expected to further impact sales and profits in the near term.
Current wording
During the second quarter of 2026, false allegations regarding the quality of certain diaper brands in the China market emerged and were carried across social media channels. Recent findings from Chinese authorities refuted these allegations and confirmed the quality and safety of such products. While recovery will take time, these findings reinforce our confidence in the safety of our products. These false allegations significantly affected our diaper sales in China during the second and third quarters of 2026 and are expected to further impact sales and profits in the near term. As consumer demand stabilizes, we remain focused on rebuilding trust through transparent communication, continued investment behind our brands, and disciplined execution.
Previous wording
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 the current market environment and assuming oil prices remain at current levels for the remainder of the year, we estimate incremental input costs of approximately $150 (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 wording
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. For the full year, we estimate incremental input costs of approximately $250 (prior to consideration of mitigation actions). 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.
Previous wording
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 wording
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 of 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"). Furthermore, each Kenvue equity award outstanding immediately prior to the close of the Kenvue Acquisition will be converted into an equivalent K-C equity award, subject to and in accordance with the provisions of the Merger Agreement.
Previous wording
During the three and six months ended June 30, 2026, we incurred $109 and $157, respectively, 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 wording
During the three and nine months ended September 30, 2026, we incurred $106 and $263, respectively, of acquisition-related costs in connection with the Kenvue Acquisition, which are included in Marketing, research and general expenses. See Item 1, Notes 4 and 12 to the Unaudited Interim Condensed Consolidated Financial Statements for further information.
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"). At the time of closing, 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 (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. On July 1, 2026, subsequent to the quarter ended June 30, 2026, all consultation requirements and customary closing conditions set forth in the Purchase Agreement were satisfied and the IFP Transaction was completed. See Item 1, Note 1, Note 3 and Note 11 to the Unaudited Interim Condensed Consolidated Financial Statements for further details.
Current wording
On July 1, 2026, all consultation requirements and customary closing conditions set forth in the Equity and Asset Purchase Agreement (the "Purchase Agreement") with Suzano International Holding B.V. ("Buyer"), a wholly-owned subsidiary of Suzano S.A. ("Suzano"), were satisfied and the transaction was completed. Pursuant to the Purchase Agreement, we contributed substantially all of the assets and liabilities of the Company's former IFP segment (the "IFP Business") to FamPro Tissue Holdings B.V. (formerly known as Kimberly-Clark IFP NewCo B.V.), a newly formed joint venture (the "Arbex Joint Venture"). At closing, Buyer acquired a 51% interest in the Arbex Joint Venture for a cash purchase price of approximately $1.3 billion, subject to certain post-closing adjustments, and we retained a 49% equity interest (the "IFP Transaction"). As a result, the results of the IFP Business through the closing date and applicable assets and liabilities as of December 31, 2025 are reported as discontinued operations in the Company's financial statements and excluded from segment results for all periods presented. Beginning in the third quarter of 2026, our share of the Arbex Joint Venture's income is reported in Share of net income of equity companies in the Condensed Consolidated Statements of Income. See Item 1, Notes 1 and 3 to the Unaudited Interim Condensed Consolidated Financial Statements for further information.
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. During the second quarter of 2026, our Board of Directors approved an extension of the 2024 Transformation Initiative through the end of 2028. 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 pre-tax costs are anticipated to be approximately $1.5 billion, with cash costs expected to be approximately
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. During the second quarter of 2026, our Board of Directors approved an extension of the 2024 Transformation Initiative through the end of 2028. 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 pre-tax costs are anticipated to be approximately $1.5 billion, with cash costs 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, 2026 and 2025, total 2024 Transformation Initiative charges were $55 pre-tax ($44 after-tax) and $62 pre-tax ($50 after-tax), respectively. For the nine months ended September 30, 2026 and 2025, total 2024 Transformation Initiative charges were $160 pre-tax ($116 after-tax), and $261 pre-tax ($222 after-tax), respectively. Through September 30, 2026, cumulative pre-tax charges for the 2024 Transformation Initiative were $968 ($750 after-tax), and substantially all expected selling, general and administrative expense savings have been realized or approved for action program to date.
Previous 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.
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. Also includes the impact of sales recognized under the Supply Agreements with the Arbex Joint Venture formed as part of the IFP Transaction.
Previous wording
Gross profit of $3.1 billion for the six months ended June 30, 2026 increased 5.8%, while gross margin of 37.6% increased 150 basis points. Gross margin in the current and prior year included approximately 80 basis points and 160 basis points, respectively, of charges related to the 2024 Transformation Initiative, primarily for incremental depreciation expense and asset write-offs. Excluding these charges, adjusted gross margin increased 60 basis points to 38.3%. The increase was primarily due to one-time tariff refunds and gross productivity savings from integrated margin management of approximately $235, partially offset by supply chain related investments and unfavorable pricing net of cost inflation.
Current wording
Gross profit of $1.4 billion for the three months ended September 30, 2026 decreased 3.5%, while gross margin of 34.9% decreased 110 basis points. Gross margin in the current and prior year included approximately 70 basis points and 80 basis points, respectively, of charges related to the 2024 Transformation Initiative, primarily for incremental depreciation expense and asset write-offs. Excluding these charges, adjusted gross margin decreased 130 basis points to 35.5%. The decrease was primarily due to unfavorable pricing net of cost inflation and supply chain related investments, partially offset by gross productivity savings from integrated margin management of approximately $115.
Previous wording
Gross profit of $1.6 billion for the three months ended June 30, 2026 increased 10.1%, while gross margin of 38.3% increased 330 basis points. Gross margin in the current and prior year included approximately 50 basis points and 200 basis points, respectively, of charges related to the 2024 Transformation Initiative, primarily for incremental depreciation expense and asset write-offs. Excluding these charges, adjusted gross margin increased 190 basis points to 38.8%. The increase was primarily due to one-time tariff refunds and gross productivity savings from integrated margin management of approximately $120, partially offset by unfavorable pricing net of cost inflation.
Current wording
Gross profit of $4.6 billion for the nine months ended September 30, 2026 increased 2.7%, while gross margin of 36.7% increased 70 basis points. Gross margin in the current and prior year included approximately 70 basis points and 140 basis points, respectively, of charges related to the 2024 Transformation Initiative, primarily for incremental depreciation expense and asset write-offs. Excluding these charges, adjusted gross margin of 37.4% was flat compared to the prior year, as one-time tariff refunds and gross productivity savings from integrated margin management of approximately $350 were largely offset by unfavorable pricing net of cost inflation and supply chain related investments.
Previous wording
Operating profit for the three months ended June 30, 2026 was $633 compared to $592 in the prior year. Results included charges related to the 2024 Transformation Initiative of $54 and $121 for the three months ended June 30, 2026 and 2025, respectively. Results in current quarter also included charges of $109 related to the Kenvue Acquisition, and a benefit of $39 related to Brazil business tax credits.
Current wording
Operating profit for the three months ended September 30, 2026 was $516 compared to $621 in the prior year. Results included charges related to the 2024 Transformation Initiative of $55 and $62 for the three months ended September 30, 2026 and 2025, respectively. Results in current quarter also included charges of $106 related to the Kenvue Acquisition.
Previous wording
Operating profit for the six months ended June 30, 2026 was $1.4 billion compared to $1.2 billion in the prior year. Results included charges related to the 2024 Transformation Initiative of $105 and $196 for the six months ended June 30, 2026 and 2025, respectively. Results in the current year also included charges of $157 related to the Kenvue Acquisition, a benefit of $120 related to the settlement of insurance claims from a previous acquisition and a benefit of $39 related to Brazil business tax credits.
Current wording
Operating profit for the nine months ended September 30, 2026 was $1.9 billion compared to $1.8 billion in the prior year. Results included charges related to the 2024 Transformation Initiative of $160 and $258 for the nine months ended September 30, 2026 and 2025, respectively. Results in the current year also included charges of $263 related to the Kenvue Acquisition, a benefit of $120 related to the settlement of insurance claims from a previous acquisition and a benefit of $37 related to Brazil business tax credits.
Previous wording
Excluding these items, adjusted operating profit for the three and six months ended June 30, 2026 was $757 and $1.5 billion, respectively, compared to $713 and $1.4 billion in the prior year.
Current wording
Excluding these items, adjusted operating profit for the three and nine months ended September 30, 2026 was $677 and $2.2 billion, respectively, compared to $683 and $2.1 billion in the prior year.
Previous wording
Diluted earnings per share for the three months ended June 30, 2026 were $1.22 compared to $1.33 in the prior year, reflective of the decrease in income from continuing operations discussed above. Adjusted diluted earnings per share for the three months ended June 30, 2026 were $1.80, representing a 10.4% increase compared to the prior year, primarily driven by higher adjusted operating profit, lower net interest expense and higher income from equity companies.
Current wording
Diluted earnings per share for the three months ended September 30, 2026 were $1.19 compared to $1.01 in the prior year, reflective of the lower effective tax rate during the period discussed above. Adjusted diluted earnings per share for the three months ended September 30, 2026 were $1.70, representing a 17.2% increase compared to the prior year, primarily driven by lower net interest expense and a lower adjusted effective tax rate.
Previous wording
Diluted earnings per share for the six months ended June 30, 2026 were $2.91 compared to $2.72 in the prior year, reflective of the increase in income from continuing operations discussed above. Adjusted diluted earnings per share for the six months ended June 30, 2026 were $3.40, representing a 4.6% increase compared to the prior year, driven by higher adjusted operating profit, lower net interest expense and higher income from equity companies, partially offset by a higher adjusted effective tax rate.
Current wording
Diluted earnings per share for the nine months ended September 30, 2026 were $4.10 compared to $3.73 in the prior year, reflective of higher operating profit and lower net interest expense. Adjusted diluted earnings per share for the nine months ended September 30, 2026 were $5.10, representing an 8.5% increase compared to the prior year, driven by higher adjusted operating profit and lower net interest expense.
Previous wording
Income (Loss) from Discontinued Operations, Net of Income Taxes
Current wording
Income from Discontinued Operations, Net of Income Taxes
Previous wording
Income (loss) from discontinued operations, net of income taxes for the three and six months ended June 30, 2026 was $(60) and $41, respectively, compared to $68 and $171 in the prior year. The decrease was driven by pre-tax separation costs of $72 and $104 for the three and six months ended June 30, 2026, respectively, compared to $33 in the prior year. Current year results also included net tax charges of $107 million related to the impacts from certain reorganization activities associated with the IFP Transaction. The incremental charges in the current year were partially offset by lower depreciation expense due to reporting requirements for discontinued operations.
Current wording
Income from discontinued operations, net of income taxes for the three and nine months ended September 30, 2026 was $1.4 billion compared to $110 and $281 in the prior year. The increase was primarily driven by the pre-tax gain of approximately $1.4 billion recognized upon completion of the IFP Transaction, partially offset by the inclusion of a full nine months of results for the IFP Business in the prior year. In addition, results for the nine months ended September 30, 2026 included net tax charges of $104 related to the impacts from certain reorganization activities associated with the IFP Transaction.
Previous 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.
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. Also includes the impact of sales recognized under the Supply Agreements with the Arbex Joint Venture formed as part of the IFP Transaction.
Previous wording
Net sales of $2.7 billion for the three months ended June 30, 2026 decreased 1.2% driven by the exit of the private label diaper business in the US and a decrease in organic sales. Organic sales decreased 0.7%, primarily driven by changes in retail inventories of 1.0% and impacts from the fire at our Los Angeles distribution center of 0.8%. Net sales of $5.3 billion for the six months ended June 30, 2026 decreased 0.9%, as the exit of the private label diaper business in the US was partially offset by organic sales growth. Organic sales increased 0.5% driven by volume gains of 0.8%, primarily in Consumer Tissue and Professional categories, partially offset by lower pricing to drive sales of new product.
Current wording
Net sales of $2.7 billion for the three months ended September 30, 2026 increased 0.9% driven by transactions with the Arbex Joint Venture under Supply Agreements and organic sales growth. Organic sales increased 0.4%, primarily driven by volume growth of 2.0%, despite an unfavorable impact of approximately 130 basis points from retailer year-over-year inventory movements, partially offset by lower pricing from increased promotional activity. Net sales of $8.1 billion for the nine months ended September 30, 2026 were relatively flat compared to the prior year as the exit of the private label diaper business in the US was partially offset by organic sales growth. Organic sales increased 0.5% driven by volume gains of 1.2%, primarily in Family Care and Professional categories, partially offset by lower pricing from increased promotional activity.
Previous wording
Operating profit for the three and six months ended June 30, 2026 of $186 and $431, increased 2.2% and 12.5%, respectively. The increase for the three months ended June 30, 2026 was primarily driven by gross productivity savings and favorable currency impacts, partially offset by a 440 basis point impact from the China social media disruption. The increase for the six months ended June 30, 2026 was driven by gross productivity savings, favorable currency impacts and volume and mix led net sales growth, partially offset by unfavorable pricing net of cost inflation and supply chain related investments.
Current wording
Operating profit for the three and nine months ended September 30, 2026 of $657 and $2.0 billion increased 2.7% and 1.6%, respectively. The increase for the three months ended September 30, 2026 was primarily driven by gross productivity savings and lower advertising spend, partially offset by unfavorable pricing net of cost inflation and supply chain related investments. The increase for the nine months ended September 30, 2026 was driven by gross productivity savings and one-time tariff refunds, partially offset by unfavorable pricing net of cost inflation and impacts from business exits of approximately 200 basis points.
Previous wording
Cash provided by operations was $1.7 billion during the six months ended June 30, 2026 compared to $1.1 billion 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 timing and lower incentive payments in the current year.
Current wording
Cash provided by operations was $2.4 billion during the nine months ended September 30, 2026 compared to $1.8 billion in the prior year. The increase was driven primarily by proceeds received from the grant of a long-term license agreement to the Joint Venture, an insurance recovery associated with the settlement of claims from a previous acquisition, and favorable changes in operating working capital, due in part to timing and lower incentive payments in the current year. These amounts were partially offset by incremental cash payments for restructuring, IFP Transaction, and Kenvue Acquisition charges.
Previous wording
Cash used for investing was $765 during the six months ended June 30, 2026 compared to $312 in the prior year, primarily reflecting higher planned capital spending. During the six months ended June 30, 2026, our capital spending was $776 compared to $401 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.
Current wording
Cash used for investing was $552 during the nine months ended September 30, 2026 compared to $650 in the prior year, primarily reflecting higher planned capital spending ($1.0 billion compared to $741 in the prior year). Capital spending was partially offset by cash proceeds received from the completion of the IFP Transaction. 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 $222 during the six months ended June 30, 2026 compared to $1.2 billion in the prior year. This decrease was primarily due to debt proceeds of $1.3 billion related to the IFP Term Loan Facility (see Item 1, Note 3 to the Unaudited Interim Condensed Consolidated Financial Statements for details), a portion of which were used to repay our U.S. commercial paper facilities. During the six months ended June 30, 2026, we did not repurchase any shares of common stock.
Current wording
Cash used for financing was $673 during the nine months ended September 30, 2026 compared to $1.6 billion in the prior year. This decrease was primarily due to debt proceeds of $1.3 billion related to the IFP Term Loan Facility (see Item 1, Note 3 to the Unaudited Interim Condensed Consolidated Financial Statements for details), of which approximately $1.0 billion was used to repay our U.S. commercial paper facilities. During the nine months ended September 30, 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 $31 as of June 30, 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 six months ended June 30, 2026 was $652. 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.
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 $10 as of September 30, 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 nine months ended September 30, 2026 was $440. 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 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 wording
As a result of the 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). The remaining $3.8 billion of the Bridge Facility was terminated upon the issuance of $4.9 billion of senior unsecured notes, as discussed further below.
Previous wording
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 wording
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"), which was subsequently terminated on July 7, 2026, in connection with the completion of the IFP Transaction. 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, we 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.
Previous wording
We believe that our ability to generate cash from operations and our capacity to issue short-term and long-term debt are adequate to fund working capital, obligations related to our 2024 Transformation Initiative, capital spending, pension contributions, share repurchases, dividends and other needs for the foreseeable future. Further, we do not expect restrictions or taxes on repatriation of cash held outside of the U.S. to have a material effect on our overall business, liquidity, financial condition or results of operations for the foreseeable future.
Current wording
We believe that our ability to generate cash from operations and our capacity to issue short-term and long-term debt are adequate to fund working capital, obligations related to our 2024 Transformation Initiative and the Kenvue Integration Program, capital spending, pension contributions, share repurchases, dividends and other needs for the foreseeable future. Further, we do not expect restrictions or taxes on repatriation of cash held outside of the U.S. to have a material effect on our overall business, liquidity, financial condition or results of operations for the foreseeable future.
Previous 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 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.
Current wording
Certain matters contained in this report concerning our plans and expectations regarding the integration of Kenvue, which we acquired on November 2, 2026, including anticipated synergies, cost savings, integration costs and the timing thereof, the Kenvue Integration Program, including estimates of charges, that we expect to incur in connection with the Kenvue Integration Program, and the timing thereof, the International Family Care and Professional ("IFP") joint venture (the "Arbex Joint Venture") transaction with Suzano ("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, our indebtedness, including indebtedness incurred or assumed in connection with the Kenvue Acquisition, and anticipated deleveraging, 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, including the outcome of legal proceedings, 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 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 IFP Transaction (including risks related to 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.
Current wording
The assumptions used as a basis for the forward-looking statements include many estimates that, among other things, depend on the successful integration of Kenvue and the achievement of future cost savings and projected volume increases. In addition, many factors outside our control could affect the realization of these estimates. These include risks and uncertainties related to the Kenvue Acquisition and the integration of Kenvue’s business, including the risk that the anticipated benefits, synergies and cost savings of the Kenvue Acquisition may not be realized when expected or at all, the risk that integration costs may be higher than expected, the risk that we are not able to realize the anticipated benefits of the Kenvue Integration Program, risks related to the preliminary nature of the estimate of the charges and capital expenditures to be incurred in connection with the Kenvue Integration Program, which is subject to change, risks related to any delays in the timing for implementing the Kenvue Integration Program or potential disruptions to our business or operations as we execute on the Kenvue Integration Program, the risk of loss of key employees, customers, suppliers or other business counterparties, the risk of disruption to our or Kenvue’s operations, the risk of litigation related to the Kenvue Acquisition, our substantially increased indebtedness following the Kenvue Acquisition and our ability to reduce our indebtedness, maintain our credit ratings and refinance indebtedness on favorable terms, legal proceedings and governmental investigations, indemnification obligations to J&J, and the sufficiency of, and J&J’s ability to satisfy, its indemnification obligations, risks related to the IFP Transaction, including risks related to the incurrence of significant transaction and separation costs, adverse market reactions, regulatory or legal challenges, and operational disruptions, our ability 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 other acquisition and disposition activity, impairment of goodwill and intangible assets, inclu…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
The factors described under Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, or in our other SEC filings, among others, could cause our future results to differ from those expressed in any forward-looking statements made by us or on our behalf. Other factors not presently known to us or that we presently consider immaterial could also affect our business operations and financial results.
Current wording
The factors described under Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, as updated by Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q, or in our other SEC filings, among others, could cause our future results to differ from those expressed in any forward-looking statements made by us or on our behalf. Other factors not presently known to us or that we presently consider immaterial could also affect our business operations and financial results.
Previous wording
•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 wording
•Kenvue Acquisition - Acquisition-related costs incurred in connection with the 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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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 June 30, 2026 and 2025, total 2024 Transformation Initiative charges were $54 pre-tax ($40 after-tax) and $122 pre-tax ($95 after-tax), respectively. For the six months ended June 30, 2026 and 2025, total 2024 Transformation Initiative charges were $105 pre-tax ($72 after-tax), and $199 pre-tax ($172 after-tax), respectively. Through June 30, 2026, cumulative pre-tax charges for the 2024 Transformation Initiative were $913 ($706 after-tax), and approximately 95% of the total expected selling, general and administrative expense savings have been realized or approved for action program to date.