AI Takeaway
Kimberly-Clark (KMB) delivered a strong Q1 2026 with revenue up 2.7% to $4.16B, operating income surging 19.3% to $753M, and operating cash flow more than doubling to $745M, reflecting improved operational efficiency despite modest gross margin compression.
Revenue
$4.16B
++2.69% YoY
EPS (Basic)
$2.00
++16.96% YoY
Gross Margin
36.8%
-0.37% YoY
Operating Income
$753M
++19.33% YoY
Filed · Source: SEC EDGAR 10-Q filing
Net sales increased 2.7% year-over-year to $4.16B in Q1 2026 (vs. $4.05B in Q1 2025), suggesting continued consumer demand for KMB's personal care and tissue products despite a challenging macro environment.
Source: Source: 10-Q Income Statement, Q1 2026
Operating income jumped 19.3% to $753M, with operating margin expanding approximately 252 basis points to 18.1% from 15.6%, indicating meaningful cost discipline and operational efficiency improvements beyond simple revenue growth.
Source: Source: 10-Q Income Statement & Key Ratios, Q1 2026
Gross margin declined slightly by approximately 37 basis points to 36.8% (from 37.2%), as cost of revenue grew 3.3%—faster than revenue growth of 2.7%—suggesting input cost or mix headwinds at the product level.
Source: Source: 10-Q Income Statement & Key Ratios, Q1 2026
2 more insights available
Upgrade to unlockKMB's current ratio stands at 0.77, meaning current liabilities of $6.90B significantly exceed current assets of $5.29B. This structural liquidity gap requires the company to continuously access capital markets or generate strong operating cash flow to meet near-term obligations, which could be strained in a credit tightening environment.
Source: Source: 10-Q Balance Sheet & Key Ratios, Q1 2026
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Upgrade to unlockReported EPS of $1.97 versus the $1.91 analyst consensus — a +3.1% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $4.16B | $4.05B | +2.69% |
Cost of Revenue | $2.63B | $2.54B | +3.30% |
Gross Profit | $1.53B | $1.51B | +1.66% |
Operating Income | $753M | $631M | +19.33% |
Net Income | $665M | $567M | +17.28% |
EPS (Basic) | $2.00 | $1.71 | +16.96% |
EPS (Diluted) | $2.00 | $1.70 | +17.65% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $17.18B | $16.3B | +5.39% |
Current Assets | $5.29B | $5.28B | +0.19% |
Current Liabilities | $6.9B | $6.92B | -0.26% |
Stockholders' Equity | $1.8B | $1.1B | +63.12% |
Cash & Equivalents | $542M | $563M | -3.73% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $745M | $327M | +127.83% |
Investing Cash Flow | $-355M | $-119M | -198.32% |
Financing Cash Flow | $-527M | $-683M | +22.84% |
Share Buybacks | $0 | $61M | -100.00% |
D&A | $193M | $218M | -11.47% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 36.8% | 37.2% | -0.37% |
Operating Margin | 18.1% | 15.6% | +2.52% |
Net Margin | 16.0% | — | — |
ROE | 37.0% | — | — |
ROA | 3.9% | — | — |
Current Ratio | $0.766 | — | — |
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KMB had a strong Q1 2026, with revenue rising 2.7% to $4.16B and net income jumping 17.3% to $665M. EPS came in at $2.00 (basic), up from $1.71 a year ago, and operating cash flow more than doubled to $745M.
The standout story was operating leverage — operating income surged 19.3% to $753M, expanding operating margin to 18.1% from 15.6%. However, gross margin slipped slightly to 36.8% from 37.2%, signaling modest input cost pressure, and the company paused share buybacks entirely.
Yes, KMB grew revenue 2.7% year-over-year to $4.16B in Q1 2026, up from $4.05B in Q1 2025. Cost of revenue grew slightly faster at 3.3%, which caused a small compression in gross margin.
KMB's balance sheet shows improving equity (up 63.1% YoY to $1.80B) and strong cash generation ($745M operating cash flow), but the current ratio of 0.77 indicates current liabilities exceed current assets, a structural liquidity gap common for large consumer staples companies that rely on credit facilities.
KMB's operating cash flow surged 127.8% to $745M from $327M in Q1 2025, likely driven by improved working capital management and higher net income of $665M. This strong cash conversion is a positive signal about the quality of KMB's earnings in the quarter.