Kimberly-Clark (KMB) Stock: A Fire, an EPS Miss, and a Revenue Beat

TLDR

• Q1 2026 EPS came in at $1.60, missing the $1.93 forecast by 17.1%
• Revenue beat expectations at $4.2B vs. the $4.09B forecast
• Stock edged up 0.34% in premarket trading to $98.58
• A distribution center fire in Ontario, CA will cut Q2 organic growth by 70-80 basis points
• Full-year 2026 outlook maintained; double-digit adjusted EPS growth expected on a constant currency basis

Kimberly-Clark (KMB) posted a mixed first quarter in 2026. Earnings per share of $1.60 fell well short of the $1.93 Wall Street expected — a 17.1% miss. But revenue told a different story, coming in at $4.2 billion against a forecast of $4.09 billion.

The stock ticked up 0.34% in premarket trading to $98.58, suggesting investors were willing to look past the profit shortfall.

Organic growth came in at 2.5% for the quarter, driven by a 3% increase in volume and mix. CEO Mike Hsu noted this marks two consecutive years of broad-based volume-plus-mix growth.

Kimberly-Clark Corporation, KMB

Hsu credited innovation as a major growth engine, saying roughly 60% of total net sales and more than 75% of organic growth over the past two years were “driven by innovation.” He described 2026 as one of the company’s “most active programming years in recent history.”

Adjusted operating profit rose about 4% year over year. Adjusted SG&A as a percentage of net sales improved by 90 basis points, which freed up a 60 basis point increase in brand investment spending.

North America: Share Gains, Profit Pressure

In North America, volume-plus-mix grew 1.7%. Personal care categories picked up share — 20 basis points in weighted value share and 60 basis points in volume share. Kleenex gained 180 basis points of share in the quarter.

Operating profit in North America fell year over year, weighed down by a 490 basis point headwind from the exit of the private label diapers business and higher brand investment spending. That decline was flagged as expected.

Internationally, personal care delivered 4% organic growth and 5.5% volume-plus-mix growth. Indonesia and Brazil posted double-digit gains. Operating profit in the segment jumped 21.9%, with margins expanding to 16.2% — up roughly 500 basis points versus 2023.

Fire and Cost Pressures Threaten Q2

A fire at a third-party logistics distribution center in Ontario, California is expected to shave 70-80 basis points off Q2 organic growth. CFO Nelson Urdaneta put the financial hit at around $50 million for the quarter.

Energy-related costs tied to the fire are also expected to pressure Q2 operating margins by 70 basis points. Management said it expects to recover those costs in the second half of the year.

On commodities, oil and oil-linked derivatives make up about a quarter of KMB’s cost of goods sold. The company is roughly 80% covered for the year, but Urdaneta warned that if oil holds at $100 per barrel through the second half, it could add $150 million to $170 million in unplanned input cost inflation.

KMB maintained its full-year 2026 outlook, projecting double-digit adjusted EPS growth on a constant currency basis. Adjusted free cash flow is expected to come in around $2 billion.

The company also reaffirmed confidence in its pending Kenvue acquisition, targeting $2.1 billion in total net synergies. Adjusted free cash flow for Q1 came in at $405 million.

KMB is currently trading near its 52-week low of $92.42 and carries a dividend yield of 5.21%, having raised its dividend for 53 consecutive years.

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