Can Kimberly-Clark's Productivity Offset Inflationary Pressures?

Kimberly-Clark Corporation KMB delivered its highest productivity level ever in the second quarter of 2026, reaching 6.4%. The strong productivity performance, together with a tariff refund received in the second quarter, more than offset the higher level of brand investment compared with the prior year. This reflects the company’s ability to generate productivity gains while continuing to invest in its brands.

The company remains focused on managing its entire toolkit to navigate cost pressures, with productivity serving as a key area of emphasis. Management believes there is still significant room to improve productivity in North America, particularly as the company continues its $2 billion investment in supply-chain restructuring. The investment is expected to provide additional productivity opportunities, with the restructuring program continuing through 2027 and 2028.

The company expects around $150 million of gross input-cost headwinds in the second half, based on current oil prices and actions already underway. These impacts are fully incorporated into the company’s outlook.

To manage these pressures, Kimberly-Clark is taking a comprehensive approach that goes beyond revenue growth management. Alongside productivity and pricing actions, the company is also managing negotiations and contracts with its vendors and suppliers as part of its broader toolkit.

Management expects mitigating actions, together with the $45 million tariff refund received in the second quarter, to offset these incremental costs. As a result, the company expects pricing, net of cost inflation, to remain roughly neutral for the full year despite the additional input-cost pressures.  

Overall, Kimberly-Clark’s productivity gains are an important part of the company’s efforts to manage rising costs, while pricing actions, supplier negotiations and other measures are also being used to offset inflationary pressures. This approach allows Kimberly-Clark to address cost pressures while continuing to prioritize innovation and brand-building initiatives.

The Zacks Rundown for KMB

Shares of this Zacks Rank #3 (Hold) company have gained 10.8% in the past three months compared with the industry’s growth of 4.4%.

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From a valuation standpoint, KMB trades at a forward price-to-earnings ratio of 14.88, lower than the industry’s average of 18.75.

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The Zacks Consensus Estimate for KMB’s current fiscal-year earnings implies a year-over-year decline of 1.5%, and the same for next fiscal year earnings implies growth of 1.7%.

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Stocks to Consider

Some better-ranked stocks have been discussed below:

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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%.

BBB Foods Inc. TBBB provides spot products comprising food and non-food products, such as clothing, electronics, household goods, and others. At present, TBBB carries a Zacks Rank of 2.

The Zacks Consensus Estimate for TBBB’s current fiscal-year sales and earnings implies growth of 44.6% and 52.7%, respectively, from the year-ago reported figures. TBBB delivered a trailing four-quarter negative earnings surprise of 44%, on average.

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. 

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