KMB · Q1 2026 Earnings

Cautious

Kimberly-Clark

Reported April 28, 2026

30-second summary

Kimberly-Clark printed Q1 FY2026 organic sales growth of 2.5% (volume-plus-mix +3.0%, net price -0.5%) and adjusted EPS attributable of $1.97, with both top-line and operating profit growth landing inside the FY26 framework rather than ahead of it. The FY26 algorithm was reaffirmed — including the flat constant-currency attributable-EPS line that anchors the bear case — while equity company income was raised from ~30% to ~40% growth, the only guidance change that genuinely strengthens the constant-currency bridge against a $150-170M potential oil-driven cost headwind disclosed for the first time on the call. The reported-EPS FX tailwind was also lifted from ~130 bps to ~170 bps, but that improves reported (GAAP) optics only and does not offset cost pressure on the constant-currency framework. The print itself was clean; the watch is whether the H2 cost wave forces a walk-down on the next print.

Headline numbers

EPS

Q1 FY2026

$1.60

Revenue

Q1 FY2026

$4.16B

+2.7% YoY

Gross margin

Q1 FY2026

36.8%

Operating margin

Q1 FY2026

18.1%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$4.16B	+2.7%	$4.08B	+2.0%
EPS	$1.60	—	$1.86	-14.0%
Gross margin	36.8%	—	35.9%	+90bps
Operating margin	18.1%	—	12.4%	+570bps

Guidance

Kimberly-Clark reaffirmed full-year guidance while raising equity company income expectations and increasing disclosed currency benefits; Q1 FY2026 results met prior operating guidance.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Organic Sales Growth	Q1 FY2026	in line to ahead of weighted average category growth (~2%)	2.5%	in-line (at upper end of ~2% category growth baseline)	Met
Adjusted Operating Profit Growth	Q1 FY2026	mid-to-high single-digit rate (constant-currency basis)	3.7%	in-line (at low-to-mid range of mid-to-high single-digit guide)	Met

New guidance

Metric	Period	Guide	YoY
Net Interest Expense	FY2026	flat expectations	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Income from Equity Companies	FY2026	approximately 30 percent increase versus 2025	approximately 40 percent increase versus 2025	+10 percentage points	Raised
EPS Currency Translation Impact	FY2026	favorably impacted by ~130 basis points from currency translation	approximately 170 basis points favorable impact	+40 basis points	Raised
Reported Net Sales Currency Impact	FY2026	negative impact of 50 basis points from exit of private label diaper business; no meaningful currency impact	negative 50 basis points from private label diaper exit, positive 50 basis points from currency	+50 basis points net currency benefit (from neutral to +50 bps)	Raised

Reaffirmed unchanged this quarter: Adjusted Operating Profit Growth (mid-to-high single-digit rate on constant-currency basis), Adjusted EPS from Continuing Operations (double-digit rate on constant-currency basis), Adjusted EPS Attributable to Kimberly-Clark (flat on constant-currency basis), Adjusted Effective Tax Rate (approximately 23 percent), Organic Sales Growth (in line to ahead of weighted average growth in categories and countries (approximately 2.5%))

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
North America	$2.651B	-0.6%
International Personal Care	$1.512B	+9.1%
North America Organic Sales Growth	1.8%	—
IPC Organic Sales Growth	4.0%	—

Platform metrics

Q1 FY2026

Segment	Q1 FY2026
Organic Sales Growth	2.5%
Volume-Plus-Mix Growth	3.0%

Profitability

Q1 FY2026

Segment	Q1 FY2026
Adjusted Gross Margin	37.9%
Adjusted Operating Profit Growth	3.7%
Adjusted EPS from Continuing Operations	$1.60
Adjusted EPS Attributable to Kimberly-Clark	$1.97

Management tone

Q2 25 anchor: volume-led inflection → Q3 25 anchor: defensive deceleration → Q4 25 anchor: structural reset wrapped in innovation → Q1 FY2026 anchor: transformation conviction meets emerging cost risk.

The framing has hardened from "navigating turbulence" to "creating a company unlike any other." Three quarters ago, management's language was about share defense and holding category position. This quarter, the prepared remarks open with "creating a company unlike any other in our industry today" and management characterizes the moment as "still in the early innings of our potential" — the most expansive language KMB has used in the four-quarter arc. The transformation framing now leans heavily on the pending Kenvue integration as the proof point. The shift is real but it is also conspicuously timed to a quarter where the underlying organic and AOP prints landed at the lower end of guidance ranges, not above them.

Cost confidence has shifted from "flat input costs" to "we have toolkit to manage $150-170M." The Q4 framework explicitly leaned on flat input costs as the FY26 margin lever. This quarter, Nelson disclosed a potential $150-170M incremental cost in the back half if oil averages $100/bbl — a material crack in the flat-cost thesis — and bracketed it with historical context ("$1.6B and $1.7B consecutive year cost hits in 2022-2023, this is a fraction of that"). Nelson in Q&A: "we're about 80% covered in the entire cost basket between contractual arrangements, programmatic hedging, and other items we're doing." The new tone is one of cost mitigation confidence rather than cost stability — a meaningful semantic shift that the framework hasn't yet absorbed.

The Kenvue narrative has moved from acquisition rationale to integration execution. Last quarter, Kenvue was framed as a strategic step-up with a "more conservative view of their outlook." This quarter, the language pivots to operational specifics: "40+ integration teams," roughly 50-50 leadership bench, "seamlessly plugging Kenvue brands and businesses into our proven, durable operating model." Mike characterized Kenvue's challenges as "largely executional" rather than structural — a more positive frame than Q4's "conservative view" — though notably without Q1 Kenvue financials to substantiate the diagnosis.

Q4's category-growth concern has quietly evaporated. On the Q4 call, weighted global category growth was disclosed at ~0.6%, raising a real question about whether the FY26 organic guide anchored to ~2% was achievable. This quarter, the trailing 12-month weighted average category growth is disclosed at ~2.5%, and the FY26 baseline assumption is quietly lifted from ~2% to ~2.5% inside an otherwise "reaffirmed" guidance line. Management attributes the rebound partly to one-time factors (timing, lapping port strikes), which deserves skepticism, but the disclosed run-rate makes the FY26 organic guide more attainable than it appeared 90 days ago.

Recurring themes management leaned on this quarter:

Innovation-driven growth across portfolioMarket share gains in focus categories (baby care, women's health, active aging)Productivity and supply chain excellenceFast and lean operating model agilityM&A integration and transformationShareholder value creation acceleration

Risks management surfaced:

Risks and uncertainties that could affect forward-looking statementsExternal turbulence navigationM&A integration execution risk (implicit in Canview integration)

Q&A highlights

Dara Mosinian · Morgan Stanley

Seeking clarification on full-year guidance given commodity pressure (oil above $100/bbl). Asked management to rank mitigation actions (pricing vs. productivity vs. ad spend flexibility) and assess feasibility of offsetting cost inflation. Also requested detail on North America pricing strategy given promotional environment and unexpected cost ramp.

Management outlined PNOC (Pricing Net of Commodity Input Cost) discipline as framework. Nelson detailed $200M cumulative inflation over 2024-2025, flat outlook entering 2026, but potential $150-170M incremental cost if oil stays at $100/bbl. Emphasized 6% productivity delivery, supply chain investments, and integrated margin management. Russ noted North America promo intensity below pre-COVID levels, driven by innovation-led volume growth, not price cuts.

$200M cumulative input cost inflation over 2024-2025Flat input cost inflation outlook as of January 2026$150-170M potential incremental cost in back half if oil averages $100/bbl$20M top-line impact from California DC fire in Q2 (70-80 bps headwind in North America)

Lauren Lieberman · Barclays

Asked about shipment timing discrepancy: scanner data showed strong consumption (+200 bps ahead of shipments in North America), but reported growth was sub-2%. Sought clarification on which categories saw headwinds and whether timing would reverse in Q2. Follow-up: Questioned how $50M Q2 profit headwind is being mitigated and why full-year mitigation plans aren't detailed if productivity is already at 6%.

Nelson explained consumption vs. shipment timing difference was primarily due to strong Q1 activation programming (shipments pulled forward from December) and lapping of strong prior-year Q2 comps (4% organic, 5% North America volume). Confirmed Q2 organic growth expected slightly below Q1. On mitigation: stated confidence managing $50M Q2 impact, highlighted 80% cost coverage, and noted teams actively negotiating with suppliers. Deferred specific full-year mitigation details pending cost trajectory clarity.

North America consumption 200 bps ahead of shipments in Q1Q2 2025 comparisons: 4% total enterprise organic growth, 5% North America volume growthQ2 2026 headwind: ~$20M from California DC fire (70-80 bps impact)80% coverage of cost basket via contractual arrangements and hedging

Peter Grom · UBS

Asked for detail on category growth outlook upgrade from 2% to 2.5%, including which regions/categories are performing better. Also questioned sustainability of North America's strong 3.3% category growth rate given uncertain operating backdrop.

Mike attributed North America rebound to timing shifts in competitive promotion (particularly in paper), cycling of prior-year port strike impacts, and indication that Q4 slowdown was one-off. Russ added no large-scale shifts in consumer behavior observed; trailing 12-month weighted average category growth ~2.5% viewed as sustainable baseline with puts and takes across regions.

Updated category growth outlook: 2.5% globally (vs. prior 2%)North America Q1 category growth: 3.3%Trailing 12-month weighted average category growth: ~2.5%No large-scale shifts in consumer buying behavior observed

Javier Escalante · Evercore ISI

Requested detail on new organizational structure for merged Kimberly-Clark/Edgewell entity, including how it restores Edgewell growth while preserving standalone Kimberly-Clark competitiveness and biggest operational changes. Also sought updates on Susana JV completion and merger approval status.

Mike framed Edgewell challenges as largely executional (North America skin/oral care, China business) rather than structural; noted Kirk's management team has taken positive steps and recently adopted operating model consistent with KC's market-centric approach. Emphasized 50-50 leadership bench composition, world-class team assembly, market-centric but globally scaled operating model focusing on ownership/speed/competitiveness. Russ detailed 40+ integration teams, good line of sight to synergies in COGS (e.g., combined logistics), SG&A (systems rationalization, AI), and revenue (distribution, e-commerce). Pre-close work ongoing.

Edgewell's Q1 results scheduled for early May40+ integration teams actively planning post-close operationsLeadership team 50-50 split between KC and Edgewell talentNotable Edgewell challenges: North America skin care, North America oral care, China business

Robert Moscow · TD Cowen

Challenged management's 'resilience' narrative by noting 2025 tariff headwind, though mitigated for full year, still required profit guidance reduction. Current potential $150-170M cost headwind exceeds prior tariff impact. Questioned confidence in offsetting such a large cost burden.

Mike provided historical context: 2022-2023 saw $1.6B and $1.7B consecutive year cost hits (inflation supercycle), making current $150-170M 'a fraction of that.' Emphasized improved cost management capabilities since 2022-2023 (industry-leading productivity, enhanced RGM, pricing net of cost discipline). Cited strong base business momentum (95% of NA sales-weighted markets with share gains, 80%+ of cohorts up) as cushion. Hedging guidance pending clarity on final cost trajectory.

2022 input costs: $1.6B2023 input costs: $1.7BCurrent potential exposure: $150-170M (fraction of prior cycles)95%

Answers to last quarter's watch list

FY26 attributable EPS framework — does it hold at flat constant-currency? Reaffirmed at flat constant-currency this print. The $150-170M H2 cost risk has not yet been allowed to walk it down; the equity income lift (+10 pts) is the only constant-currency offset, while the FX tailwind benefits reported EPS only. The line held but it is now under more strain than at Q4.

Continue monitoring

Q1 organic sales growth vs ~2% category baseline. Organic came in at +2.5%, with trailing-12-month weighted category growth disclosed at ~2.5% (vs ~0.6% in Q4). The bear case that FY26 organic was unachievable on a sub-1% category base is off the table — for now. Russ flagged Q1's NA strength as partly one-time (port strike lap, paper promo timing), so durability is unproven.

Resolved positively

Adjusted gross margin trajectory on flat-input-costs thesis. Adjusted gross margin printed 37.9%, -60 bps YoY, as productivity was more than offset by pricing net of cost inflation and supply chain investments. Nelson guided full-year gross and operating margin expansion of ~70-80 bps with sequential improvement through the year. The flat-cost thesis is now explicitly at risk in H2 from oil.

Continue monitoring

Adjusted FCF guidance disclosure. Not reinstated in the FY26 framework this print. The $361M FY25 miss remains uncommented on going forward.

Resolved negatively

IFP/Suzano JV close timing and equity income step-up. Equity company income guidance was raised from ~30% to ~40% increase versus 2025 — a 10 percentage point upgrade that strengthens the continuing-ops-to-attributable bridge. No change to mid-2026 close timing was disclosed.

Resolved positively

Costco distribution loss containment. Not explicitly addressed in the Q1 disclosures. NA reported revenue at -0.6% (vs -3.0% Q4) implies the -60 bps headwind is annualizing as expected without spreading; no commentary on category expansion of the loss.

Continue monitoring

Kenvue close timing and integration framing. Integration narrative pivoted to operational specifics (40+ teams, ~50-50 leadership bench, synergy line-of-sight across COGS/SG&A/revenue). Kenvue challenges characterized as executional rather than structural — a more positive frame than Q4.

Resolved positively

What to watch into next quarter

Whether the FY26 framework holds if oil stays at $100/bbl. Nelson explicitly sized $150-170M H2 incremental cost risk; Moscow's question forced a conditional answer. Watch the Q2 print for any walk-down on FY operating profit growth from mid-to-high SD to mid SD, or any narrowing of the attributable-EPS framework below flat constant-currency.

Q2 organic sales growth vs Q1's +2.5%. Nelson guided Q2 "slightly below Q1" — translate to ~2.0-2.3%. A print below 2.0% would suggest the Q1 strength was mostly the December shipment pull-forward and would weaken the FY organic case.

Q2 adjusted gross margin trajectory vs Q1's 37.9%. $50M Q2 profit headwind from Middle East war inflation plus the California DC fire ($20M top-line) plus emerging input cost pressure will test margin durability. Management guided full-year gross margin and operating margin expansion of 70-80 bps; watch the cadence.

NA organic vs NA category growth. NA organic +1.8% materially lagged the disclosed 3.3% NA category growth this quarter — KMB lost share-of-growth in its largest market. Watch whether Q2 closes the gap or confirms a structural share-of-growth gap in NA paper/personal care.

Kenvue Q1 standalone results when disclosed in early May. Mike's "executional, not structural" characterization of Kenvue's problems is unverified without their numbers. A poor Kenvue Q1 — particularly in NA skin/oral care or China — would put pressure on the integration synergy thesis.

Re-introduction of an FY26 adjusted FCF guide. Two consecutive prints with no quantitative FCF target following an $361M FY25 miss. Continued absence is itself a signal.

Sources

Kimberly-Clark Q1 FY2026 Press Release (8-K Exhibit 99.1), filed April 28, 2026 — https://www.sec.gov/Archives/edgar/data/55785/000162828026027718/kmbq120268kex-991.htm
Kimberly-Clark Q1 FY2026 earnings call (Q&A transcript), April 28, 2026

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.