Kimberly-Clark Corp. (NYSE: KMB) reported second-quarter results on Tuesday that topped Wall Street's earnings expectations but missed on revenue, as productivity gains and tariff refunds helped offset weakness tied to a social media-driven sales disruption in China.

Earnings Snapshot

The maker of Huggies and Kleenex posted adjusted earnings of $2.12 per share attributable to Kimberly-Clark, ahead of the $2.01 analyst estimate. Revenue rose 0.6% year over year to $4.189 billion, missing the consensus estimate of $4.221 billion.

Gross margin expanded to 38.3% from 35.0% a year earlier. Adjusted gross margin increased 190 basis points to 38.8%, as one-time tariff refunds and productivity savings more than offset investments in new product trials, price-value initiatives and supply chain operations.

Adjusted operating profit increased 6.2% to $757 million, while adjusted EPS attributable to Kimberly-Clark climbed 10.4% from a year earlier.

CEO Commentary

Chairman and CEO Mike Hsu said the company's first-half performance demonstrates that its operating model is accelerating its transformation while maintaining momentum across its brands.

He added that Kimberly-Clark is responding to near-term headwinds expected to temper growth and earnings this year while continuing to invest in innovation and productivity to support sustainable growth beyond 2026.

China Sales Disruption

The company said second-quarter results were hurt by false allegations about the quality of certain diaper brands in China that spread across social media.

Kimberly-Clark said independent government-certified testing confirmed the safety and quality of its products, but the claims weighed on diaper sales during the quarter and are expected to continue affecting sales and profits in the near term.

Regional Performance

North America revenue declined 1.2% to $2.70 billion, reflecting the exit of the company's private-label diaper business and inventory-related headwinds.

International Personal Care revenue rose 4.0% to $1.49 billion, supported by favorable currency effects and volume growth despite the impact of the China disruption.

Balance Sheet And Cash Flow

Cash and cash equivalents totaled $956 million as of June 30, 2026. Six-month operating cash flow reached $1.7 billion, up from $1.1 billion last year.

Year-to-date capital spending reached $776 million compared to $401 million last year, and dividend payouts totaled $843 million. Total debt from continuing operations was $6.5 billion on June 30, down from $7.2 billion on December 31.

2026 Outlook

For 2026, Kimberly-Clark now expects organic sales growth to trail its weighted average category growth by about 100 basis points, primarily because of the China-related disruption.

The company continues to expect adjusted operating profit to grow at a mid-single-digit rate on a constant-currency basis and adjusted EPS from continuing operations to increase at a high single-digit rate.

However, it now expects adjusted EPS attributable to Kimberly-Clark to decline by a low single-digit percentage on a constant-currency basis.

KMB Price Action: Kimberly-Clark shares were down 0.24% at $107.30 during premarket trading on Tuesday, according to market data.