Financial Performance - Q2 2025 - Net sales declined by 40% year-over-year, reaching $38 billion in Q2 2025, compared to $40 billion in Q2 2024[27] - Organic sales decreased by 42% compared to the previous year[26] - Adjusted gross profit margin was 609%, a decrease of 70 basis points year-over-year[26, 46] - Adjusted operating income margin was 227%, a decrease of 10 basis points year-over-year[26, 46] - Adjusted diluted earnings per share were $029[26] Segment Performance - Q2 2025 - Self Care net sales were $16 billion, with a 49% reported decrease and a 59% organic sales decrease[28] - Skin Health & Beauty net sales were $11 billion, with a 40% reported decrease and a 37% organic sales decrease[33] - Essential Health net sales were $12 billion, with a 29% reported decrease and a 24% organic sales decrease[40] 2025 Outlook - The company updated its 2025 outlook, projecting a decrease in reported net sales growth in the low single digits (LSD)[23, 49] - Organic sales growth is also expected to decrease in the low single digits[49] - Adjusted diluted earnings per share are projected to be in the range of $100 to $105, assuming a full-year diluted weighted average share count of 193 billion[49] Strategic Initiatives - The Kenvue Board is undertaking a comprehensive review of strategic alternatives to unlock shareholder value[14, 57] - New leadership is focused on bolstering leadership & capabilities, reviewing operating strategy, improving execution, and optimizing structure & operating model[57]

SUMMIT, NEW JERSEY - MARCH 19: Governor of New Jersey Phil Murphy speaks onstage at the Kenvue Global Headquarter Ribbon Cutting Ceremony on March 19, 2025 in Summit, New Jersey. (Photo by Dave Kotinsky/Getty Images for Kenvue) Getty Images for Kenvue Although there has been a recent increase of 21% that aligns with the broader market gains, Kenvue (NYSE: KVUE) offers limited investment appeal at its current valuations. Our thorough analysis encompassing growth, profitability, financial stability, and valua ...

Core Viewpoint - Kenvue, a spinoff from Johnson & Johnson, is positioned as a high-yield dividend stock despite facing challenges in growth and competition from private-label brands [4][11][14] Company Overview - Kenvue was spun off from Johnson & Johnson in August 2023 to allow J&J to focus on higher growth segments [4] - The company includes well-known brands in various categories such as pain relief, allergy, skin care, oral health, baby care, digestive health, and wound care [5] Financial Performance - Kenvue's net sales and operating margins have been declining due to inflationary pressures and reduced consumer spending [4] - The company aims to achieve $350 million in annualized savings by 2026 through its Vue Forward initiative [6] - Kenvue's forward price-to-earnings ratio is 18.8, and its dividend yield is 3.9%, indicating it is a good value stock [11] Marketing and Brand Strategy - Kenvue has launched marketing campaigns targeting Gen Z consumers, but these efforts have not yet resulted in significant financial improvements [7] - The company has a global presence, with about half of its net sales coming from North America, which helps mitigate regional pressures [9][10] Competitive Landscape - Kenvue faces competition from private-label brands, which can impact its pricing power [8] - Despite this, Kenvue has not seen a significant shift to private-label products globally, with a slight decrease in private-label penetration in its categories [9] Investment Potential - Kenvue is considered a worthwhile addition for passive-income portfolios due to its strong brand lineup and high dividend yield [13][15] - The stock is currently undervalued, making it an attractive option for investors who believe in the company's long-term potential [14][15]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, The ...

Group 1 - Kenvue Inc has experienced a leadership change, with CEO Thibaut Mongon being fired and Kirk Perry appointed as interim CEO, marking the second executive shakeup this year [1] - The company replaced its CFO Paul Ruh with Amit Banati in May, indicating ongoing restructuring efforts [1] - Kenvue has warned that tariffs could negatively impact its financial performance by up to $150 million [1] Group 2 - Kenvue's stock has risen by 1.4% to $21.64, aiming for a fourth consecutive win, a streak not seen since late April [2] - The stock price increase has brought shares above the year-to-date breakeven mark, with shares now facing the 100-day moving average [2] - Options trading activity has surged, with 17,000 calls and 4,507 puts exchanged, double the average intraday rate, particularly focusing on November 23 and 24 calls [2] Group 3 - Options traders have shown a bullish sentiment towards Kenvue, with a 50-day call/put volume ratio of 37.42, ranking in the 95th percentile of annual readings [3] - Short-term traders also exhibit a call-bias, as indicated by the Schaeffer's put/call open interest ratio (SOIR) of 0.19, which stands in the 2nd percentile of readings from the past year [3]

Core Insights - Kenvue's CEO Thibaut Mongon is leaving the company as it continues its business restructuring efforts [1] - Kirk Perry has been appointed as the interim CEO following Mongon's departure [1] - Kenvue's stock price rose by 6.5% in pre-market trading after the announcement, although the stock has remained flat for the year [1] Company Developments - Kenvue, which was spun off from Johnson & Johnson, has faced pressure from activist investors to change its corporate structure and operations since its IPO in May 2023 [1] - The company appointed Jeffrey Smith, CEO of activist hedge fund Starboard Value, to its board earlier this year to avoid a proxy battle [1] - TOMS Capital Investment Management has also accumulated shares and urged the company to consider a full sale or asset divestiture [1] Strategic Evaluation - The board, led by Chairman Larry Merlo, is conducting a strategic review and considering various potential options, including simplifying the company's business portfolio and operational model [2] - Kenvue reported a 4% decline in net sales for the second quarter, which was worse than analysts' average expectation of a 1.4% decline [2] - Mongon's departure is not attributed to any specific cause, and he will receive severance compensation [2]

[Major Announcements](index=1&type=section&id=Major%20Announcements) Kenvue's Board is implementing actions to unlock shareholder value, including a CEO transition and a strategic review, while reporting preliminary Q2 2025 results [Overview of Key Actions](index=1&type=section&id=Overview%20of%20Key%20Actions) Kenvue's Board is implementing actions to unlock shareholder value, including a CEO transition, a strategic review, and reporting preliminary Q2 2025 financial results - Kenvue's Board is implementing actions to unlock shareholder value and reach its full potential[2](index=2&type=chunk) - Key actions include a CEO transition, an ongoing comprehensive review of strategic alternatives, and reporting select preliminary Second Quarter 2025 financial results[2](index=2&type=chunk)[6](index=6&type=chunk) [Leadership Transition](index=1&type=section&id=Leadership%20Transition) Kenvue's Board appointed Kirk Perry as Interim CEO, effective immediately, following Thibaut Mongon's departure, and initiated a search for a permanent CEO [Interim CEO Appointment](index=1&type=section&id=Interim%20CEO%20Appointment) Kirk Perry, a Kenvue director, has been appointed Interim CEO, effective immediately, as Thibaut Mongon departs; a search for a new CEO is underway - Mr. Kirk Perry, a current Kenvue director and seasoned consumer products and brand strategist, has been appointed Interim Chief Executive Officer, effective immediately[4](index=4&type=chunk)[6](index=6&type=chunk) - Mr. Thibaut Mongon has departed the Company and stepped down from the Kenvue Board[4](index=4&type=chunk) - Heidrick & Struggles is assisting in the search for the Company's next Chief Executive Officer[4](index=4&type=chunk) [Strategic Review](index=2&type=section&id=Strategic%20Review) Kenvue's Board initiated a comprehensive strategic review to optimize its brand portfolio, improve execution, and accelerate profitable growth [Purpose and Scope of Strategic Review](index=2&type=section&id=Purpose%20and%20Scope%20of%20Strategic%20Review) Kenvue's Board initiated a comprehensive strategic review to optimize its brand portfolio, improve execution, and enhance operating performance - The Board initiated a comprehensive review of strategic alternatives and established a Strategic Review Committee to oversee the process[7](index=7&type=chunk) - The strategic review will consider optimizing the Company's brand portfolio, improving execution, and enhancing operating performance to accelerate profitable growth and unlock value[7](index=7&type=chunk) [Advisors for Strategic Review](index=2&type=section&id=Advisors%20for%20Strategic%20Review) Centerview Partners and McKinsey & Company are advising Kenvue's Board on the strategic review, with updates planned for shareholders - Centerview Partners and McKinsey & Company are advising the Board and the Strategic Review Committee[8](index=8&type=chunk) - The Company plans to update shareholders as the strategic review progresses[8](index=8&type=chunk) [Preliminary Second Quarter 2025 Financial Results](index=2&type=section&id=Preliminary%20Second%20Quarter%202025%20Financial%20Results) Kenvue reported preliminary Q2 2025 financial results, showing declines in net and organic sales, with diluted EPS between $0.21 and $0.22 [Key Preliminary Financial Metrics](index=2&type=section&id=Key%20Preliminary%20Financial%20Metrics) Kenvue reported preliminary Q2 2025 results, including a (4.0)% net sales change and diluted EPS of $0.21 to $0.22, with full results due August 7, 2025 Select Preliminary Second Quarter 2025 Financial Results | Metric | Fiscal Three Months Ended June 29, 2025 | | :--- | :--- | | Net sales change | (4.0)% | | Organic sales change | (4.2)% | | Diluted earnings per share | $0.21 to $0.22 | | Adjusted diluted earnings per share | $0.28 to $0.29 | - The Company will report its full second quarter 2025 financial results on August 7, 2025, and will revise its full year 2025 outlook at that time[10](index=10&type=chunk) [Reconciliation of Net Sales to Organic Sales](index=5&type=section&id=Reconciliation%20of%20Net%20Sales%20to%20Organic%20Sales) Preliminary net sales declined by (4.0)%, while organic sales decreased by (4.2)% for Q2 2025, after accounting for currency and M&A impacts Reconciliation of Preliminary Net Sales to Organic Sales (Fiscal Three Months Ended June 29, 2025 vs June 30, 2024) | Metric | Reported Net Sales Change | Impact of Foreign Currency | Impact of Acquisitions and Divestitures | Total Organic Sales Change | | :--- | :--- | :--- | :--- | :--- | | Total | (4.0)% | 0.3% | (0.1)% | (4.2)% | [Reconciliation of Net Income to Adjusted Net Income](index=5&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) Preliminary Net Income for the fiscal three months ended June 29, 2025, was in the range of $396 million to $428 million, with Adjusted Net Income between $536 million and $568 million Reconciliation of Preliminary Net Income to Adjusted Net Income (Fiscal Three Months Ended June 29, 2025) | Metric | Amount (Millions) | | :--- | :--- | | Net Income | $396 — $428 | | Adjustments: | | | Amortization of intangible assets | 64 | | Restructuring expenses and operating model optimization initiatives | 68 | | Separation-related costs | 24 | | Tax impact on special item adjustments | (28) | | Other | 12 | | **Adjusted net income (non-GAAP)** | **$536 — $568** | [Reconciliation of Diluted EPS to Adjusted Diluted EPS](index=5&type=section&id=Reconciliation%20of%20Diluted%20EPS%20to%20Adjusted%20Diluted%20EPS) Preliminary Diluted EPS for the fiscal three months ended June 29, 2025, was $0.21 to $0.22, while Adjusted Diluted EPS was $0.28 to $0.29 after specific adjustments Reconciliation of Preliminary Diluted EPS to Adjusted Diluted EPS (Fiscal Three Months Ended June 29, 2025) | Metric | Amount | | :--- | :--- | | Diluted earnings per share | $0.21 — $0.22 | | Adjustments: | | | Amortization of intangible assets | 0.03 | | Restructuring expenses and operating model optimization initiatives | 0.04 | | Separation-related costs | 0.01 | | Tax impact on special item adjustments | (0.01) | | **Adjusted diluted earnings per share (non-GAAP)** | **$0.28 — $0.29** | [Company Information](index=2&type=section&id=Company%20Information) This section provides the biography of Interim CEO Kirk Perry and an overview of Kenvue as the world's largest pure-play consumer health company [Biography of Interim CEO Kirk Perry](index=2&type=section&id=Biography%20of%20Interim%20CEO%20Kirk%20Perry) Kirk Perry, Interim CEO, joined Kenvue's Board in December 2024, bringing over 30 years of experience in consumer-packaged goods and technology - Kirk Perry joined Kenvue's Board of Directors in December 2024[12](index=12&type=chunk) - He has over 30 years of experience in global consumer-packaged goods, technology, and business transformation[12](index=12&type=chunk) - Prior roles include President and CEO of Circana (and IRI), President, Global Client and Agency Solutions at Google, and various leadership positions at Procter & Gamble[12](index=12&type=chunk) [About Kenvue](index=2&type=section&id=About%20Kenvue) Kenvue is the world's largest pure-play consumer health company, featuring iconic, science-backed brands like Aveeno® and Tylenol® - Kenvue is the world's largest pure-play consumer health company by revenue[13](index=13&type=chunk) - Its iconic brands include Aveeno®, BAND-AID® Brand, Johnson's®, Listerine®, Neutrogena® and Tylenol®, which are science-backed and recommended by healthcare professionals[13](index=13&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) Kenvue uses non-GAAP financial measures to provide a clearer understanding of operating performance and facilitate comparisons, despite their limitations [Explanation and Use](index=3&type=section&id=Explanation%20and%20Use) Kenvue uses non-GAAP financial measures to supplement U.S. GAAP results, offering investors a clearer view of operating performance and comparisons - The Company uses non-GAAP financial measures to supplement U.S. GAAP, acknowledging their limitations and lack of standardization[14](index=14&type=chunk) - These measures are considered relevant and useful for investors to view performance similarly to management and to compare results with other companies[15](index=15&type=chunk) [Definition of Adjusted Diluted Earnings Per Share](index=3&type=section&id=Definition%20of%20Adjusted%20Diluted%20Earnings%20Per%20Share) Adjusted diluted EPS is Adjusted net income divided by diluted shares outstanding, serving as a supplemental measure of company performance - Adjusted diluted earnings per share is defined as Adjusted net income divided by the weighted average number of diluted shares outstanding[16](index=16&type=chunk) - Management views this as a useful supplemental measure of the Company's performance over time[16](index=16&type=chunk) [Definition of Adjusted Net Income](index=3&type=section&id=Definition%20of%20Adjusted%20Net%20Income) Adjusted net income is U.S. GAAP Net income adjusted for specific items like amortization and restructuring to clarify underlying performance trends - Adjusted net income is U.S. GAAP Net income adjusted for amortization of intangible assets, restructuring expenses, operating model optimization initiatives, separation-related costs, and other adjustments, along with their related tax impacts[17](index=17&type=chunk) - This measure excludes the impact of items that may obscure trends in underlying performance and is used for strategic decision making, forecasting, and evaluating current performance[17](index=17&type=chunk) [Definition of Organic Sales](index=3&type=section&id=Definition%20of%20Organic%20Sales) Organic sales are U.S. GAAP Net sales excluding foreign currency and M&A impacts, providing insight into core operational changes - Organic sales are defined as U.S. GAAP Net sales excluding the impact of changes in foreign currency exchange rates and the impact of acquisitions and divestitures[18](index=18&type=chunk) - This measure provides supplemental information useful in assessing the Company's results of operations by excluding items that do not directly reflect underlying operations[18](index=18&type=chunk) [Legal and Financial Disclosures](index=4&type=section&id=Legal%20and%20Financial%20Disclosures) This section provides cautions regarding forward-looking statements and advises that all presented financial data is preliminary and subject to change [Cautions Concerning Forward-Looking Statements](index=4&type=section&id=Cautions%20Concerning%20Forward-Looking%20Statements) The press release contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially - The press release contains forward-looking statements subject to risks and uncertainties, and actual results could differ materially[19](index=19&type=chunk) - Risks include inability to execute business strategy, inflation, economic factors, competition, challenges in R&D, and the outcome of the strategic review process[19](index=19&type=chunk) - The Company undertakes no obligation to publicly update or revise any forward-looking statements[19](index=19&type=chunk) [Financial Disclosure Advisory](index=4&type=section&id=Financial%20Disclosure%20Advisory) All financial data presented is preliminary and subject to change upon completion of normal quarter-end accounting procedures and adjustments - All financial data in this press release is preliminary and represents the most current information available to management[20](index=20&type=chunk) - These estimates are not a comprehensive statement of financial results and actual results may differ upon completion of normal quarter-end accounting procedures[20](index=20&type=chunk) [Additional Information](index=5&type=section&id=Additional%20Information) This section provides contact information for Kenvue's Investor Relations and Media Relations departments for inquiries [Investor and Media Contacts](index=5&type=section&id=Investor%20and%20Media%20Contacts) Contact information for Kenvue's Investor Relations, handled by Sofya Tsinis, and Media Relations, handled by Melissa Witt, is provided for inquiries - Investor Relations contact: Sofya Tsinis (Kenvue_IR@kenvue.com)[22](index=22&type=chunk) - Media Relations contact: Melissa Witt (media@kenvue.com)[22](index=22&type=chunk)

Core Viewpoint - A wave of brand sell-offs is sweeping through the beauty industry, driven by major companies facing performance pressures and a need to restructure their brand portfolios [2][3][6]. Group 1: Brand Sell-Offs - Coty is reportedly exploring the sale of several brands, including Gucci and Burberry, amidst market speculation [2]. - Kenvue, a spinoff from Johnson & Johnson, is also rumored to be considering the sale of its skin health and beauty division, with an estimated transaction value exceeding $500 million (approximately 3.59 billion RMB) [2]. - Natura & Co has been linked to ongoing rumors about selling Avon since last year, highlighting a broader trend of divestitures among beauty giants [2][3]. Group 2: Market Reactions - Despite the sell-off rumors, Coty's stock surged by 13% in a single day, reaching a three-month high, indicating a positive market reaction to the restructuring news [3]. - The performance pressures faced by these companies are evident, with Coty's mass beauty segment reporting a 9% decline in net revenue to $470 million (approximately 3.4 billion RMB) in Q3 of fiscal 2025 [8]. Group 3: Industry Trends - The beauty industry is experiencing a significant contraction, with Kenvue's skin health and beauty division reporting a 7.3% year-over-year sales decline in Q1 2025, the largest drop among its business segments [6]. - The Chinese market is reshaping the competitive landscape, with domestic brands capturing a growing market share, accounting for 55.2% of total sales in 2024, up 2.9 percentage points year-over-year [11][24]. Group 4: Strategic Shifts - Major beauty companies are shifting from aggressive acquisition strategies to a focus on efficiency and value, as evidenced by their divestiture of underperforming brands [19][21]. - The trend reflects a broader industry consensus that emphasizes streamlining brand portfolios and concentrating on core assets to enhance competitiveness [19][26]. Group 5: Future Outlook - The ongoing sell-off trend is expected to continue as companies adapt to the compressed industry cycle and intensifying competition [26]. - The future of the beauty industry will likely revolve around establishing competitive advantages in areas such as cutting-edge biotechnology, unique ingredients, and robust consumer data operations [26].

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive's content includes insights across various sectors such as biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Group 2 - Proactive is committed to adopting technology to enhance workflows and content production [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Group 1 - Kenvue is the largest pure-play consumer health company, having been spun off from Johnson & Johnson in 2023 [1] - The company is associated with well-known brands such as Tylenol, Neutrogena, Listerine, BANDAID, and Aveeno [1] - Kenvue is viewed as a steady dividend-oriented stock, indicating a focus on providing consistent returns to shareholders [1]