Kimberly-Clark Corporation’s KMB North America business faced softness in the second quarter of 2026, but management remains confident about its second-half outlook. Shipments in North America consumer categories lagged consumption by about 170 bps, declining roughly 1.4% compared with 0.3% consumption growth.
The gap was primarily driven by two factors: the Los Angeles distribution center fire, which created an approximately 80-bps topline headwind, or around $22 million, and retailer inventory movements, which impacted shipment growth by roughly 100 bps year over year. About half of the retailer inventory impact was unexpected and was largely related to a particular channel and the adult category. Together, these factors largely explain the shipment-consumption gap.
Management remains confident in the health of its North America business, citing continued volume and mix-led growth and share gains. The company has delivered volume- and mix-led growth in eight of the last 10 quarters, while gaining share across 70% of its North America sales base over the trailing 12 months. Management also pointed to a strong innovation pipeline and additional brand investments as important elements of its growth plans. The tissue business is performing extremely well, while the e-commerce business continues to perform well.
The company’s second-half outlook is supported by scaling innovations, strong activation initiatives and revenue growth management actions. Easier comparisons should also support performance, with North America having recorded 5% volume growth in the second quarter of 2025. Kimberly-Clark expects its promotional activity to normalize over the balance of the year. The company also has low-single-digit pricing actions in the marketplace, primarily in North America, to help cover inflation in the second half. Management expects the North America business to grow in line with its categories during the second half.
Overall, Kimberly-Clark expects North America to grow in line with its categories in the second half, supported by easier comparisons, scaling innovation, activation plans and revenue growth management actions.
The Zacks Rundown for KMB
KMB has lost 2.5% in the past three months against the industry’s growth of 0.3%.
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From a valuation standpoint, KMB trades at a forward price-to-earnings ratio of 13.18, lower than the industry’s average of 18.48. KMB currently carries Zacks Rank #3 (Hold).
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The Zacks Consensus Estimate for KMB’s current fiscal-year earnings implies a year-over-year decline of 1.3%, and the same for next fiscal year earnings implies growth of 2.1%.
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Stocks to Consider
Some better-ranked stocks have been discussed below:
WD-40 Company WDFC engages in the provision of maintenance products and homecare and cleaning products in North America, Central and South America, Asia, Australia, Europe, India, the Middle East, and Africa. At present, WDFC carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for WDFC’s current fiscal-year sales and earnings suggests growth of 9.9% and 7.2%, respectively, from the year-ago reported figures. WDFC reported a trailing four-quarter average earnings surprise of 18.3%.
Purple Innovation, Inc. PRPL designs, manufactures, and sells sleep and other products in the United States and internationally. PRPL currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for PRPL's current fiscal-year sales and earnings implies growth of 0.4% and 20.8%, respectively, from the year-ago actuals. PRPL delivered a trailing four-quarter earnings surprise of 21.3%, on average.
Ryohin Keikaku Co., Ltd. RYKKY engages in the retail of household goods and food items in Japan and internationally. RYKKY currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for RYKKY's current fiscal-year sales and earnings implies growth of 9.5% and 13.9%, respectively, from the year-ago actuals.
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Kimberly-Clark Corporation (KMB): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).