Aug 6, 2026 earnings call — Quarterly update on operations and disruptions
Company reported a $45 million tariff refund and expects about $150 million of second-half input cost headwinds.
Revenue $4.2B (est $4.2B) · EPS $1.80 (est $2.01)
Key quotes
"First, there really is no scientific evidence backing the claims."
"Yesterday, we unveiled a proprietary alternative natural fiber innovation program, which has the potential to reshape the future of our industry."
"the L.A. distribution center fire would represent a headwind of around 80 basis points to top line in the quarter for North America, and that largely came in as expected, right around $22 million to be exact."
Analyst Q&A 9
China product issue and recovery
Q (Nik Modi · RBC): Analyst asked how the China problem started and what the path forward is, and also asked how the quarter compared to internal expectations.
A: Management said there is no scientific evidence for the claims and third-party tests were non-detect. They are cooperating with Chinese authorities, investing in transparent communication, and expect a slow recovery — not seeing sequential deterioration but no positive inflection yet. They also said the quarter was choppy and below some expectations, though tariff refund and productivity helped results.
"Yes, I would say the main message is that we were very confident in our products." — Russell Torres
Tariff refund and 2027 outlook
Q (Christopher Carey · Wells Fargo): Analyst asked how much the tariff refund was, whether more is expected, and whether the 2027 outlook construct still holds.
A: They said the North America U.S. refund in the quarter was $45 million and that represents roughly half of what they paid in North America; they do not expect anything much more material in the outlook today. On 2027, they remain confident in the value of the Kenvue transaction but said it's early to give specific 2027 guidance and they will update as clarity improves.
"in terms of the refund that we received in the quarter in North America, the U.S., it was $45 million." — Nelson Urdaneta
North America shipments vs consumption
Q (Bonnie Herzog · Goldman Sachs): Analyst asked what drove North America's softness — consumption versus retailer destocking — and why management expects a stronger second half.
A: They said shipments lagged consumption by about 170 basis points in the quarter, driven mainly by the L.A. distribution center fire (about 80 basis points, ~$22 million) and retailer inventory movements (about 100 basis points). Management said they expect the second half to improve due to innovation, brand investment, revenue growth management actions, and easier comps.
"One, shipments in North America consumer categories, in fact, lagged consumption by about 170 basis points." — Nelson Urdaneta
Innovation and new fiber platform
Q (Michael Lavery · Piper Sandler): Analyst asked how innovation is tracking versus expectations and timing into 2027, and asked about the new fiber platform and any upfront costs.
A: They said the innovation pipeline is strong and this year is their most active commercial activation; the pipeline gives visibility over the next 3 years. On the alternative natural fiber, they said it is decades in development, could become a major new material platform, offers superior softness for strength, is better for the planet, and could improve economics; investments and pilot facility work are already underway and factored into plans.
"I really do think this has the potential to become our next great material platform." — Michael Hsu
Promotions and Kenvue synergies
Q (Stephen Robert Powers · Deutsche Bank): Analyst asked how the promotional environment in North America evolved and how that affects the year; and whether Kenvue synergies are running ahead and if that means faster or incremental synergies.
A: They said promotional activity has ticked up recently but historically their promo levels have been below pre-COVID and the category; they increased promo in diapers to support innovation and to manage a club distribution change, and expect promo to normalize while keeping PNOC discipline. On Kenvue, they said they now have greater confidence in the path to achieve the $1.9 billion target with many bottom-up, shovel-ready initiatives, but it's early to set the exact cadence.
"In fact, in '25, our promo activity was below both pre-COVID levels and the category." — Russell Torres
Pricing versus promotions
Q (Lauren Lieberman · Barclays): Analyst asked how much pricing changes are true list price increases versus less promotional activity, and whether the low single-digit pricing comment was North America or global.
A: They said some pricing actions are targeted revenue growth management and channel mix effects; total company pricing was down 50 bps in the first half, and they will take pricing actions to cover inflation in the second half, primarily in North America at low single-digit levels. They emphasized innovation and productivity as the tools to support price/mix over time, and global impact will vary by geography.
"And so that's part of what you saw in the first half of this year of seeing total company pricing down 50 bps." — Russell Torres
2027 visibility and competitor pricing
Q (Robert Moskow · TD Cowen): Analyst asked if 2027 will have an easy comparison or if volatility makes it unclear, and whether competitors will follow price increases forcing promotions.
A: They said volatility exists and it's early to tell where 2027 will land; they emphasized the company's long history, strong innovation pipeline, and execution capability. On competition and pricing, they said it's possible competitors won't follow, but their plan is to focus on superior innovation, productivity, and managing the full toolkit rather than reactively matching promotions.
"Where we land in 2027, it's early to tell." — Nelson Urdaneta
Input cost assumptions and China phasing
Q (Peter Grom · UBS): Analyst asked to unpack the $150 million back-half inflation assumption, timing within the year, and how China headwind is phased.
A: They said their estimate for the second half gross input cost headwinds is right around $150 million and that amount is incorporated into their outlook; mitigating actions plus the tariff refund largely offset these costs so pricing net of cost inflation is roughly neutral for the full year. For China, they said the 100 basis point full-year assumption equates to roughly 200 basis points in the second half, split about evenly between Q3 and Q4, and an operating profit headwind of about $70 million split half and half (~$0.16 EPS).
"Currently, based on where oil prices are and the actions that we've started to undertake, our estimate for the second half is to be right around $150 million of gross input cost headwinds." — Nelson Urdaneta
Diapers competition, tissue improvement, Suzano deal
Q (Javier Escalante Manzo · Evercore): Analyst asked whether U.S. diaper imports backed by retailers are peaking and about overlap with a competitor relaunch, plus what's driving tissue improvement and what Suzano deal means for focus and resources.
A: They said new entrants often peak then abate; their response is to focus on innovation and tiered value propositions (good/better/best), which has driven share gains globally. For tissue, improvement comes from sharper value propositions, activation (examples Viva and Kleenex), and premiumization plus club/online shifts. On Suzano/Arbex, they said it creates a stronger focused tissue competitor and lets Kimberly-Clark concentrate resources on personal care and new initiatives.
"Our focus in terms of how we deal with that is to just stay focused on executing our strategy, which I think has been very successful around the world, and that's to continue bringing innovation and focus on strong value propositions at every tier good, better, best." — Russell Torres