Kenvue (KVUE) 2025 Conference Summary Company Overview - Kenvue is a leading consumer health care company with approximately $16 billion in net sales across various categories including pain relief, allergy relief, skincare, and oral care, featuring brands like Aveeno, Band Aid, Johnson's, Listerine, Neutrogena, and Tylenol [1][2] Key Points and Arguments Separation and Transformation - Kenvue has successfully completed the separation from Johnson & Johnson, which involved disentangling over 2,300 transitional service agreements (TSAs) [6][7] - The company is focused on transforming from a division of a large company to a standalone entity aimed at profitable growth, with a new operating model to reach more consumers [7][8] - Kenvue has improved its gross margin by 200 basis points last year and is on track to deliver $350 million in gross synergies by 2026 [8][9] Investment in Brands and Culture - The company increased its investment in brands by 20% last year, shifting resources from fixed infrastructure costs to brand investments [9][10] - Approximately one-third of Kenvue's employees are new, indicating a significant cultural shift within the organization [9][10] Market Dynamics and Consumer Behavior - Kenvue is experiencing short-term headwinds due to pricing adjustments in the U.S. and destocking in China, but expects consumption volumes to rise [18][19] - The macroeconomic environment is putting pressure on consumers globally, leading to reduced spending in certain categories [21][30] - Retailers in the U.S. are being more cautious, resulting in destocking that is impacting shipments [22][27] Regional Insights - In EMEA and Latin America, consumer confidence is waning, but Kenvue's iconic brands are well-positioned to capture market share [30][32] - The company has launched access price points in Latin America, which have shown significant share gains [31][32] Future Outlook - Kenvue anticipates a stronger second half of the year, driven by the absence of negatives from the first half, continued execution of commercial plans, and a strong pipeline of innovation [41][42] - The company is focused on maintaining agility in a fluid macro environment while executing its long-term strategies [45][52] Capital Allocation and M&A Strategy - Kenvue is currently in investment mode, focusing on transforming the company and optimizing cash flow, with plans to return cash to shareholders through dividends [71][72] - M&A opportunities are being considered but will be approached with discipline, given the strength of the current portfolio [72] Vision for the Future - Kenvue aims to be the undisputed leader in consumer health by 2030, leveraging its five extraordinary powers to create significant value for shareholders [73] Additional Important Content - The company is actively working on improving its supply chain to minimize tariff impacts and enhance operational efficiencies [50][52] - Kenvue's marketing strategies are evolving, with a focus on breakthrough campaigns and innovative product launches to drive consumer engagement [46][48] - The company acknowledges the importance of adapting to changing consumer preferences, particularly among Gen Z, to maintain relevance in the market [64][66]

Financial Data and Key Metrics Changes - In 2024, the company achieved year-over-year organic sales growth of 1.5% with an adjusted operating income margin of 21.5% and adjusted diluted earnings per share of $1.14 [18] Business Segment Data and Key Metrics Changes - In the healthcare segment, the company expanded its leadership position and gained market share in nearly 80% of the segments, including key brands like Tylenol, Zyrtec, and Nicorette [16] - The essential health segment maintained a healthy mid-single-digit growth rate and delivered volume growth in North America, EMEA, and Latin America [16] - In skin health and beauty, the company grew both volume and value in EMEA and Latin America, despite not meeting expectations in North America and Asia Pacific [16] Market Data and Key Metrics Changes - The company reported significant improvements in consumer engagement and brand presence both in-store and online, contributing to overall growth [16] Company Strategy and Development Direction - The company established three strategic priorities for 2024: reaching more consumers, freeing up resources for competitive investment, and fostering a performance-driven culture [15] - The company aims to leverage superior science, expert recommendations, and consumer insights-led innovation to enhance brand growth in 2025 [18][19] - The company is focused on activating new revenue growth management capabilities to improve pricing and promotional strategies [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic external environment but expressed confidence in realizing compounding benefits from significant work done to date [21] - The company anticipates exciting opportunities ahead to create value for stakeholders and solidify its position as a consumer health leader [21] Other Important Information - The company is executing a two-year initiative to deliver $350 million of annualized cost savings by 2026 [17] - A new Chief Financial Officer, Amit Banati, has joined the company, expected to contribute to its next chapter [21] Q&A Session Summary Question: Why does the company not use GAAP earnings instead of adjusted non-GAAP earnings? - The company believes that presenting non-GAAP measures is relevant and useful for investors, as it allows for a better understanding of operating performance and easier comparison with peers in the industry [24]

Core Insights - The article emphasizes the importance of dividend investing in quality blue-chip stocks, BDCs, and REITs for building a sustainable retirement income [1]. Group 1 - The author is a Navy veteran focused on dividend investing and aims to help lower and middle-class workers build investment portfolios of high-quality, dividend-paying companies [1]. - The investment strategy is centered around a buy-and-hold approach, prioritizing quality over quantity [1]. - The goal is to achieve financial independence through dividends within the next 5-7 years [1].

[Part I—Financial Information](index=6&type=section&id=Part%20I%E2%80%94Financial%20Information) [Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents Kenvue Inc.'s unaudited condensed consolidated financial statements for Q1 2025, including balance sheets, operations, cash flows, and notes Condensed Consolidated Balance Sheets (in Millions) | Account | March 30, 2025 | December 29, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $5,710 | $5,525 | | **Total Assets** | **$26,257** | **$25,601** | | **Total Current Liabilities** | $6,666 | $5,739 | | **Total Liabilities** | **$16,204** | **$15,933** | | **Total Stockholders' Equity** | **$10,053** | **$9,668** | | **Total Liabilities and Stockholders' Equity** | **$26,257** | **$25,601** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net sales decreased to **$3,741 million** in Q1 2025, while operating and net income both increased year-over-year Condensed Consolidated Statements of Operations (in Millions, Except Per Share Data) | Account | Three Months Ended Mar 30, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | **Net sales** | $3,741 | $3,894 | | **Gross profit** | $2,168 | $2,242 | | **Operating income** | $558 | $550 | | **Net income** | **$322** | **$296** | | **Diluted EPS** | **$0.17** | **$0.15** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to **$428 million** in Q1 2025, offsetting cash used in investing and financing Condensed Consolidated Statements of Cash Flows (in Millions) | Cash Flow Activity | Three Months Ended Mar 30, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | **Net cash flows from operating activities** | $428 | $287 | | **Net cash flows used in investing activities** | $(167) | $(152) | | **Net cash flows used in financing activities** | $(310) | $(326) | | **Net decrease in cash and cash equivalents** | $(13) | $(227) | | **Cash and cash equivalents, end of period** | $1,057 | $1,155 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, business segments, legal proceedings, and the 'Our Vue Forward' restructuring - The company is organized into three reportable business segments: **Self Care, Skin Health and Beauty, and Essential Health**[29](index=29&type=chunk) - Separation-related costs, primarily for IT disentanglement, were **$38 million** in Q1 2025, down from **$67 million** in Q1 2024. These costs are expected to continue through the first half of fiscal 2025[40](index=40&type=chunk)[41](index=41&type=chunk) - The company is involved in numerous legal proceedings, including claims related to **acetaminophen, Zantac, phenylephrine (PE), and benzoyl peroxide (BPO)**. J&J has indemnified Kenvue for **talc-related liabilities** in the U.S. and Canada[103](index=103&type=chunk)[107](index=107&type=chunk)[119](index=119&type=chunk) - The '2024 Multi-Year Restructuring Initiative' is expected to incur approximately **$550 million** in pre-tax charges through 2025 to optimize the cost structure. In Q1 2025, the company incurred **$67 million** in related charges[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, sales performance, the 'Our Vue Forward' restructuring, and liquidity [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Net sales decreased **3.9%** in Q1 2025, while gross profit margin improved and operating and net income increased Q1 2025 vs Q1 2024 Results of Operations (in Millions) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net sales | $3,741 | $3,894 | (3.9)% | | Gross profit | $2,168 | $2,242 | (3.3)% | | Operating income | $558 | $550 | 1.5% | | Net income | $322 | $296 | 8.8% | - Organic sales declined **1.2%**, reflecting a **0.9%** volume decrease and a **0.3%** negative impact from price/mix. The decline was primarily driven by competitive pressures in U.S. Skin Health and Beauty and a weak cough/cold season outside the U.S[148](index=148&type=chunk)[149](index=149&type=chunk) - Gross profit margin expanded to **58.0%** from **57.6%**, benefiting from supply chain optimization initiatives, which were partially offset by volume deleverage and unfavorable value realization[150](index=150&type=chunk) - SG&A expenses decreased by **$36 million**, primarily due to savings from the 'Our Vue Forward' initiative and lower separation-related costs[151](index=151&type=chunk) [Segment Results](index=45&type=section&id=Segment%20Results) Self Care organic sales grew, while Skin Health and Beauty and Essential Health saw declines or flat performance, impacting adjusted operating income Q1 2025 Segment Performance vs Q1 2024 (in Millions) | Segment | Net Sales | Net Sales Change | Organic Sales Change | Adjusted Operating Income | Adj. Op. Income Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Self Care | $1,667 | (1.8)% | 0.3% | $566 | (5.8)% | | Skin Health and Beauty | $977 | (7.3)% | (4.8)% | $92 | (37.0)% | | Essential Health | $1,097 | (3.9)% | 0.0% | $239 | (9.5)% | | **Total** | **$3,741** | **(3.9)%** | **(1.2)%** | **$897** | **(11.3)%** | - Self Care organic sales growth of **0.3%** was driven by strength in North America Allergy Care and Pain Care, offset by a weak cough/cold season outside the U.S., particularly in China[167](index=167&type=chunk) - Skin Health and Beauty's **4.8%** organic sales decline was caused by volume decreases (**2.9%**) and unfavorable price/mix (**1.9%**), mainly due to competitive pressures and strategic pricing in the U.S[169](index=169&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains robust liquidity, supported by cash from operations and credit facilities, managing debt and dividends - Primary liquidity sources include **$1.06 billion** in cash, a **$4.0 billion** revolving credit facility (undrawn), and a **$4.0 billion** commercial paper program (**$1.68 billion** outstanding)[179](index=179&type=chunk) - Net cash from operating activities increased to **$428 million** in Q1 2025 from **$287 million** in Q1 2024, driven by favorable working capital changes[173](index=173&type=chunk)[174](index=174&type=chunk) - Key financing activities in Q1 2025 included a **$750 million** repayment of Senior Notes, **$392 million** in dividend payments, and **$63 million** in treasury stock purchases, funded partially by **$868 million** in net proceeds from commercial paper[176](index=176&type=chunk) - The company declared a quarterly dividend of **$0.205** per share, payable in May 2025[184](index=184&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposures were reported from those disclosed in the company's Annual Report on Form 10-K - There have been **no material changes** in market risk from those disclosed in the company's most recent Annual Report[194](index=194&type=chunk) [Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, with no material changes to internal controls, as a new global ERP system is being implemented in phases - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the quarter[195](index=195&type=chunk) - **No material changes** were made to the company's internal control over financial reporting during the quarter[196](index=196&type=chunk) - The company is in a **multi-year implementation of a new global ERP system**, which is expected to occur in phases over the next several years[197](index=197&type=chunk) [Part II—Other Information](index=56&type=section&id=Part%20II%E2%80%94Other%20Information) [Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from **Note 13, "Commitments and Contingencies"**, covering key litigation matters like acetaminophen and Zantac - Information regarding legal proceedings is incorporated by reference from **Note 13, "Commitments and Contingencies,"** of the financial statements[199](index=199&type=chunk) [Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) There have been **no material changes** to the risk factors previously disclosed in its Annual Report on Form 10-K - There have been **no material changes** in risk factors from those disclosed in the company's Annual Report[200](index=200&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales occurred; the company repurchased **3.0 million shares** for **$62.8 million** to offset dilution, with **12.8 million shares** remaining Share Repurchases in Q1 2025 (Shares in Thousands) | Period | Total Shares Purchased | Average Price Paid | Shares Remaining in Program | | :--- | :--- | :--- | :--- | | Dec 30, 2024 – Jan 26, 2025 | 3,000 | $20.94 | 12,792 | | Jan 27, 2025 – Mar 30, 2025 | 0 | N/A | 12,792 | | **Total** | **3,000** | **-** | **12,792** | - The Board authorized a share repurchase program for up to **27,000,000 shares** with no expiration date, intended to offset dilution from equity-based awards[202](index=202&type=chunk) [Other Information](index=56&type=section&id=Item%205.%20Other%20Information) **No directors or officers adopted or terminated Rule 10b5-1 trading plans** or non-Rule 10b5-1 arrangements during the quarter - **No directors or officers adopted or terminated a Rule 10b5-1 trading plan** during the quarter[204](index=204&type=chunk) [Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including **CEO and CFO certifications** and various incorporated agreements - The filing includes **CEO and CFO certifications** pursuant to **Sections 302 and 906 of the Sarbanes-Oxley Act**[205](index=205&type=chunk)

Core Insights - Kenvue reported $3.74 billion in revenue for Q1 2025, a year-over-year decline of 3.9%, with an EPS of $0.24 compared to $0.28 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $3.68 billion by 1.70%, and the EPS surpassed the consensus estimate of $0.22 by 9.09% [1] Financial Performance Metrics - Net Sales in Self Care reached $1.67 billion, slightly above the average estimate of $1.61 billion, reflecting a year-over-year decline of 1.8% [4] - Net Sales in Essential Health were $1.10 billion, exceeding the estimated $1.07 billion, but down 3.9% from the previous year [4] - Net Sales in Skin Health and Beauty totaled $977 million, slightly below the average estimate of $980.93 million, marking a year-over-year decline of 7.3% [4] - Adjusted Operating Income for Self Care was $566 million, surpassing the estimate of $557.79 million [4] - Adjusted Operating Income for Essential Health was $239 million, significantly higher than the average estimate of $89.22 million [4] - Adjusted Operating Income for Skin Health and Beauty was $92 million, below the average estimate of $121.28 million [4] Stock Performance - Kenvue shares have returned +6.1% over the past month, compared to the Zacks S&P 500 composite's +11.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - Kenvue reported quarterly earnings of $0.24 per share, exceeding the Zacks Consensus Estimate of $0.22 per share, but down from $0.28 per share a year ago, representing an earnings surprise of 9.09% [1] - The company posted revenues of $3.74 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.70%, but down from $3.89 billion year-over-year [2] - Kenvue has outperformed the S&P 500, with shares increasing about 8.2% since the beginning of the year, while the S&P 500 declined by -4.3% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $0.29 on revenues of $3.95 billion, and for the current fiscal year, it is $1.14 on revenues of $15.45 billion [7] - The Zacks Industry Rank indicates that the Consumer Products - Staples sector is in the bottom 28% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - Organic sales declined by 1.2% compared to Q1 last year, consistent with the full-year outlook [10][26] - Adjusted gross margin was 60%, down 20 basis points year-over-year [30] - Adjusted operating margin contracted by 220 basis points to 19.8% due to increased brand support investments [30][37] - Adjusted net income was $465 million, with adjusted diluted EPS of $0.24, reflecting a $0.02 headwind from currency [31] Business Line Data and Key Metrics Changes - In Self Care, organic sales grew by 0.3%, driven by allergy, digestive health, and smoking cessation franchises [11][27] - Skin Health and Beauty saw organic sales decline by 4.8%, impacted by destocking in China and a soft sun season in Latin America [14][28] - Essential Health's organic sales were flat, with growth in Wound Care offset by declines in Women's Health and Oral Care [19][29] Market Data and Key Metrics Changes - EMEA region showed strength with organic sales growth for the twelfth consecutive quarter, driven by double-digit growth in the Avino brand [16] - In the U.S., sequential consumption improved in Q1 compared to Q4, particularly for Neutrogena and Aveeno brands [17][18] - The U.S. market experienced destocking in April, affecting sales performance [52] Company Strategy and Development Direction - The company is focused on accelerating profitable growth through a new operating model, optimizing cost structures, and enhancing performance culture [8][9] - Strategic priorities include leveraging superior science, launching insights-led innovation, and driving seamless commerce [8] - The company plans to maintain its organic sales growth outlook for 2025 in the range of 2% to 4% despite macroeconomic challenges [32][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant macro shifts and seasonal variability but expressed confidence in navigating the complex environment [7] - The company expects to see stronger top-line performance in the second half of the year as headwinds dissipate [32][37] - Management remains focused on increasing household penetration and gaining market share despite external pressures [55][60] Other Important Information - A CFO transition was announced, with Amit Banati set to join as the new Chief Financial Officer [23][24] - The company is implementing measures to mitigate the impact of tariffs, estimating a gross impact of $150 million for 2025 [36][94] Q&A Session Summary Question: Innovation plans in the current environment - Management confirmed strong innovation plans for 2025, with adjustments to ensure value and presence in stores [41][45] Question: Phasing of organic growth in Q2 - Management indicated that Q2 organic sales growth will continue to be burdened by destocking and strategic price investments [48][52] Question: Confidence in skin health and beauty initiatives - Management expressed optimism about consumption trends and the effectiveness of marketing campaigns, though acknowledging more work is needed [62][65] Question: Balancing promotional activity with marketing investment - Management plans to continue investing in marketing while monitoring ROI closely [68][70] Question: Impact of tariffs and supply chain concerns - Management discussed the relatively small exposure to China and ongoing efforts to enhance supply chain resilience [82][86]

Paul Ruh Chief Financial Officer First Quarter 2025 Earnings Results May 8, 2025 Introduction Sofya Tsinis Vice President of Investor Relations 3 Thibaut Mongon Chief Executive Officer Cautionary note on forward-looking statements This presentation contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements about management's expectations of Kenvue's future operating and financial performance, product development, market ...

Exhibit 99.1 Kenvue Reports First Quarter 2025 Results SUMMIT, N.J. May 8, 2025 – Kenvue Inc. (NYSE: KVUE) today announced financial results for the first quarter ended March 30, 2025. "In Q1, our teams executed our plans while continuing to navigate an evolving macro and consumer environment," said Thibaut Mongon, Chief Executive Officer. "We are committed and focused on activating our brands while staying agile and flexible to accelerate sustainable profitable growth." First Quarter Summary First quarter ...

Core Insights - Analysts project Kenvue (KVUE) will report quarterly earnings of $0.22 per share, a decline of 21.4% year over year, with revenues expected to reach $3.68 billion, down 5.5% from the same quarter last year [1] Earnings Estimates - Over the last 30 days, there has been a downward revision of 0.1% in the consensus EPS estimate for the quarter, indicating a collective reconsideration by covering analysts [2] - Revisions to earnings estimates are significant indicators for predicting potential investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3] Key Metrics Projections - Analysts estimate 'Net Sales- Self Care' at $1.61 billion, reflecting a change of -5.1% from the year-ago quarter [5] - 'Net Sales- Essential Health' is projected to be $1.07 billion, indicating a year-over-year change of -6.2% [5] - 'Net Sales- Skin Health and Beauty' is expected to reach $980.93 million, showing a change of -6.9% from the prior-year quarter [5] Adjusted Operating Income Estimates - 'Adjusted Operating Income- Self Care' is forecasted to be $557.79 million, down from $606 million in the same quarter last year [6] - 'Adjusted Operating Income- Essential Health' is expected to be $89.22 million, a significant decrease from $256 million reported in the same quarter of the previous year [6] - 'Adjusted Operating Income- Skin Health and Beauty' is anticipated to come in at $121.28 million, compared to $149 million in the same quarter last year [7] Stock Performance - Kenvue shares have shown a return of +7.4% over the past month, outperforming the Zacks S&P 500 composite's +0.4% change, with a Zacks Rank 3 (Hold) indicating expected performance in line with the overall market [7]