Kimberly-Clark Corporation shares rose after the consumer products maker reported preliminary third-quarter results showing a 17% increase in adjusted earnings per share, despite a slight decline in net sales.

The company reaffirmed its full-year 2026 outlook, expecting mid-single-digit growth in adjusted operating profit on a constant-currency basis.

Preliminary financial performance

The maker of Huggies and Kleenex reported estimated net sales of $4.134 billion for the quarter, down 0.4% from $4.150 billion in the prior year. Organic sales fell 1.3%, reversing the 2.5% growth recorded in the same period last year.

Adjusted operating profit edged down to $677 million from $683 million. Diluted earnings per share attributable to the company surged to $5.37 from $1.34, largely reflecting a one-time gain associated with the International Family Care and Professional business transaction.

Outlook and guidance

Management attributed the gap between organic sales and category growth primarily to disruptions linked to social media activity in China, estimating these could reduce overall growth by approximately one percentage point. The company’s weighted average category growth stands at approximately 1.7% on a trailing 12-month basis.

Key guidance points for full-year 2026 include:

• Organic sales growth trailing weighted average category growth by approximately 100 bps.
• Adjusted operating profit expected to grow at a mid-single-digit rate on a constant-currency basis.
• High-single-digit growth forecast for adjusted EPS from continuing operations.
• Adjusted EPS attributable to the company expected to decline at a low-single-digit rate.

The outlook excludes potential impacts from acquisitions, including the pending acquisition of Kenvue Inc.

What the numbers show

A divergence exists between operational profitability and headline earnings. While operating profit fell 16.9% YoY to $516 million, diluted EPS jumped to $5.37 due to a one-time transaction gain. This indicates that the surge in reported bottom-line earnings is non-operational, whereas core profitability metrics like adjusted operating profit remained relatively flat ($677 million vs $683 million). Additionally, cash reserves more than tripled to $1.874 billion, strengthening the balance sheet ahead of major strategic moves.

Final report schedule

Kimberly-Clark will release its final third-quarter results on November 5, followed by a management discussion with analysts. The company cautioned that preliminary estimates could change as it completes its quarterly financial review.

Kimberly-Clark Corp received conditional approval from the European Commission for its acquisition of Kenvue. The regulatory green light is contingent upon the company fully complying with the commitments it offered to resolve competition issues.

Regulatory clearance details

The European Commission concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area, provided that the remedies are strictly adhered to. The approval follows a review process where the Commission assessed the potential impact on consumer markets and supply chains.

The decision highlights the importance of structural or behavioral remedies in large-scale mergers within the consumer goods sector. By accepting the commitments, the Commission ensures that market dynamics remain competitive post-acquisition.

Key conditions for approval

• Full compliance with all commitments submitted by the acquirer
• Adherence to specific divestitures or operational changes as outlined in the remedy package
• Ongoing monitoring by the Commission to ensure sustained compliance