KMB · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

KIMBERLY CLARK CORP · 2026-11-05 · Importance 31 · Surprise 32 · In source text

Third-quarter 2026 gross profit declined 3.5% to $1.441 billion, and gross margin fell 110 basis points to 34.9%; adjusted gross margin decreased 130 basis points to 35.5%. Unfavorable pricing net of cost inflation and supply-chain investments drove the quarterly decline, partly offset by approximately $115 million of gross productivity savings from integrated margin management. Nine-month gross profit increased 2.7% to $4.578 billion and gross margin rose 70 basis points to 36.7%; adjusted gross margin was flat at 37.4%. One-time tariff refunds and approximately $350 million in gross productivity savings were largely offset by unfavorable pricing net of cost inflation and supply-chain investments.

Key facts

• For the full year, Kimberly-Clark estimates incremental input costs of approximately $250 before mitigation actions, amid Middle East conflict-related energy supply disruptions and price volatility. source
• Nine-month 2026 adjusted gross margin reflected one-time tariff refunds and approximately $350 million in integrated margin management productivity savings, largely offset by unfavorable pricing net of cost inflation and supply chain investments. source
• Three-month 2026 gross margin pressure primarily reflected unfavorable pricing net of cost inflation and supply chain investments, partly offset by approximately $115 million of gross productivity savings from integrated margin management. source
• Three-month 2026 gross margin was 34.9%, down 110 basis points; adjusted gross margin decreased 130 basis points to 35.5%. source
• Nine-month 2026 gross margin was 36.7%, up 70 basis points; adjusted gross margin was 37.4%, flat with the prior year. source

Impact estimates