[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]

Group 1: Visa - Visa reported a 9% increase in revenue and a 10% increase in non-GAAP EPS for its fiscal second quarter of 2025, with payment volumes up 8% and processed transactions rising 9% [3][7] - Year-to-date, Visa's stock is up over 8%, significantly outperforming the financial sector and the S&P 500 [4] - The company generated $9.42 billion in free cash flow in the first half of fiscal 2025, supporting stock repurchases of $8.41 billion and dividends of $2.33 billion [6] - Visa is guiding for low-double-digit net revenue growth and a low teens increase in diluted EPS for the full fiscal year [7] - The stock has a P/E ratio of 34.4, above its 10-year median of 33.1, which is considered justified given the company's performance [8] Group 2: Kenvue - Kenvue's stock currently yields 3.5% and presents a value opportunity in a relatively safe industry, with management focused on turning around its underperforming skin health and beauty segment [9][10] - The skin health segment's recovery is slower than expected, with organic sales declining by 1.9% in 2024, although Neutrogena regained its No. 1 position in the U.S. face care group [11] - Other segments, including self-care and essential health, grew organic sales by 1.9% and 4.1% respectively in 2024 [12] - Kenvue is collaborating with activist investor Starboard Value to appoint new board members, indicating a commitment to improving performance [12][13] Group 3: Essential Utilities - Essential Utilities offers a 3.2% forward yielding dividend, making it an attractive option for conservative investors during market volatility [14] - The company provides water and wastewater services to 1.1 million customers, with 99% of its earnings attributed to these services, which are less likely to be affected by economic downturns [15] - Operating in regulated markets allows Essential Utilities to guarantee certain rates of return, aiding in future cash flow management [16] - The company has increased its dividend payout for 30 consecutive years, with a 7% compound annual growth rate over the past decade [17][18]

Market Overview - The S&P 500 index is down approximately 9.5% from its high, while the Nasdaq Composite index has fallen 13.5% [1] - The stock market has experienced significant volatility, which may present investment opportunities in companies with strong long-term potential [2] Unity Software - Unity Software provides tools for developers to create video games and digital content, along with digital advertising tools [3] - Despite being a leader in the game-engine services space, Unity's stock has underperformed, down about 89% from its all-time high shortly after its IPO in 2020 [4][5] - In Q4, Unity's sales declined 25% year over year to approximately $457 million, with a net loss of $127 million [6] - However, revenue from Unity's core strategic portfolio increased 4% year over year to $442 million, indicating potential for recovery [7] - The company is undergoing restructuring and strategic shifts, including changes to its digital advertising network and the rollout of a new AI platform [7] - Unity's shares are considered a worthwhile buy ahead of its first-quarter earnings release on May 7 [8] Kenvue - Kenvue, a spinoff from Johnson & Johnson, has not performed as expected, down more than 15% from its all-time high [9] - The company reported 1.9% organic sales growth in its self-care segment and 4.1% growth in essential health, but a decline of 1.9% in the skin health and beauty segment [11] - Kenvue increased its marketing budget to 10.6% of sales in 2024, but recovery is slower than anticipated [12] - There are signs of improvement in the skin health and beauty segment, with organic sales rising 2.6% in Q4 2024 [13] - Kenvue trades at just below 21 times estimated free cash flow for 2025, close to fair value for a mature consumer staple [14] - The stock offers a 3.6% dividend yield, making it attractive for value investors despite low growth prospects [14]

The market expects Kenvue (KVUE) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on May 8, 2025, might help the stock move higher if these key numbers are better than ...