Transformation and Growth Strategy - Kenvue has executed a significant transformation agenda since its separation from J&J, focusing on modernizing systems and optimizing operations to drive sustainable and profitable growth[21]. - Following the Kenvue IPO in May 2023, J&J owned approximately 89.6% of Kenvue's outstanding common stock, which was reduced to 0% after the completion of the Debt for Equity Exchange in May 2024[22]. Product Portfolio and Innovation - Kenvue's product portfolio includes major brands in Self Care, Skin Health and Beauty, and Essential Health, with a focus on delivering connected health offerings and dermatological solutions[28]. - The company employs approximately 1,600 scientists and professionals in its R&D organization, which operates a global network of innovation hubs to enhance product development[31]. Manufacturing and Supply Chain - Over 60% of Kenvue's sales volume during fiscal year 2024 was delivered through in-house manufacturing, providing significant operational flexibility[37]. - Kenvue's distribution network is designed to meet complex consumer demands, with most centers operated in partnership with third-party operators to leverage their expertise[39]. - The company maintains a global supplier base for raw materials, ensuring no single supplier provides a significant portion of total material requirements, thus mitigating supply chain risks[36]. Workforce and Employee Engagement - Kenvue's workforce consists of approximately 22,000 employees, with 99% being full-time, reflecting a diverse and inclusive company culture[50]. - The company emphasizes transparency, empowerment, and accountability in its talent practices to enhance performance and engagement[52]. - Investment in learning and development is prioritized to ensure employees' skills remain relevant, contributing to superior performance and engagement[53]. - Regular surveys are conducted to gauge employee sentiment on strategic alignment, execution, inclusion, and career development[54]. - Competitive compensation and benefits packages are offered to attract and retain top talent, with periodic benchmarking to ensure competitiveness[56]. - Employee benefits include retirement plans, life insurance, medical and dental insurance, and well-being reimbursement programs[57]. Corporate Social Responsibility and ESG - The company's ESG strategy, known as the Healthy Lives Mission, focuses on nurturing healthy people, enriching a healthy planet, and maintaining healthy practices[45]. - The company supports communities through strategic investments and its global employee volunteer program, Kenvue Cares[55]. Regulatory Compliance and Risk Management - Compliance with extensive government regulations is essential, impacting business strategies and operational costs[65]. - The company’s OTC products are regulated under the FDA's monograph system, requiring adherence to specific quality and labeling standards[69]. - In China, OTC products are regulated by the National Medical Products Administration (NMPA), which oversees safety and registration[71]. Financial Performance and Economic Factors - A hypothetical 10% unfavorable change in the average exchange rate would result in a decline in net income of approximately $83 million for the fiscal year ending December 29, 2024[425]. - A hypothetical 10% unfavorable change in exchange rates would lead to an unrealized loss of approximately $187 million related to the fair value of forward foreign exchange contracts and cross currency swap contracts[426]. - Inflationary pressures have increased costs of raw materials, packaging, and other inputs, with price increases implemented to offset these costs during 2023 and 2024[427]. - The company has experienced higher than expected inflation since 2021, affecting transportation, commodity, and supply chain costs[428]. Debt and Interest Rate Management - The long-term debt portfolio is primarily composed of fixed-rate debt, minimizing the impact of interest rate fluctuations on results of operations[430]. - The company incurred approximately $9.0 billion of new debt related to the Debt Financing Transactions[431]. - As of December 29, 2024, the company has $7.7 billion of Senior Notes and $797 million of commercial paper outstanding[431]. - The company is exposed to interest rate risk due to potential changes in interest rates affecting new floating rate debt[431]. - The company entered into forward starting interest rate swap agreements for long-term financing purposes[432]. Commodity and Credit Risk Management - The company is exposed to commodity price risks from various inputs including resins, silicon, and energy[434]. - Credit risk is managed through evaluations of customers' financial conditions and obtaining collateral as appropriate[435]. - Current adverse macroeconomic factors may increase the difficulty in collecting receivables[435]. - The company contracts with diverse, credit-worthy counterparties to mitigate credit loss risks[435].

Core Viewpoint - Kenvue, having spun off from Johnson & Johnson, is facing challenges with organic growth but has a strong brand portfolio and a commitment to shareholder value, making it a potential investment for risk-averse investors seeking passive income [1][2]. Group 1: Company Overview - Kenvue is a consumer health company with a portfolio of well-known brands such as Band-Aid, Listerine, Tylenol, Aveeno, and Neutrogena, which allows it to minimize advertising costs [3]. - The company is resilient to economic downturns, but it has experienced sluggish growth as an independent entity [4]. Group 2: Investor Engagement - Activist investor Starboard Value has taken a significant stake in Kenvue, indicating potential solutions to the company's challenges [5]. - Kenvue has responded to Starboard's board nominations, highlighting its commitment to shareholder value, although this pressure adds uncertainty to its strategic direction [6]. Group 3: Financial Performance and Strategy - Kenvue's Vue Forward plan aims for $350 million in annualized savings by 2026, with an adjusted gross margin of 60.4%, which is 400 basis points above pre-pandemic levels [7]. - The company has increased brand investment by 20% to enhance marketing efforts, including social media campaigns and engagement with healthcare professionals [8]. Group 4: Future Outlook - Kenvue anticipates organic sales growth of 2% to 4% in 2025, with a flat year-over-year net sales outlook due to a 3% foreign currency headwind [10]. - The company is focusing on marketing to younger generations and restoring confidence in its strategy despite external pressures [11]. Group 5: Dividend and Valuation - Kenvue has a stable and growing dividend, having raised it by 2.5% in July 2024, and is recognized as a Dividend King with 61 consecutive years of increases [13]. - The forward price-to-earnings ratio is 19.1, indicating a reasonable valuation for a high-quality dividend stock [13][14].

Group 1 - Kenvue Inc. (NYSE: KVUE) was spun off from Johnson & Johnson (JNJ) less than 2 years ago and is still establishing itself as a standalone company [1] - The company is expected to show growth potential beyond 2025, indicating a positive outlook for its future performance [1] Group 2 - The article emphasizes the importance of conducting personal due diligence before making investment decisions [1] - The author expresses a commitment to helping lower and middle-class workers build investment portfolios focused on high-quality, dividend-paying companies [1]

Group 1 - Over half of the S&P 500 Dividend Aristocrats are considered too expensive or have low dividends, indicating a potential market correction or reevaluation of these stocks [1] - Five of the ten lowest priced "Dogs of the Aristocrats" are identified as attractive buying opportunities, suggesting a divergence in value within the aristocrat category [1] Group 2 - The Dividend Dogcatcher platform offers insights and follow-up portfolios related to the S&P 500 Dividend Aristocrats, providing investors with additional resources for decision-making [1] - A live video series on Facebook highlights potential portfolio candidates, engaging the community in discussions about various stock tickers, which may influence investment strategies [2]

Core Insights - Kenvue, the former consumer health business of Johnson & Johnson, has underperformed since its IPO 21 months ago, leading to a reduction in guidance for both 2023 and 2024 [1] Company Performance - Kenvue has cut its financial guidance for the upcoming years, indicating ongoing challenges in its business operations [1] Market Context - The company was spun off from Johnson & Johnson and has struggled to meet market expectations since going public [1]

Group 1 - Kenvue (KVUE) is identified as an interesting company for analysis, focusing on cash flow and growth prospects in the oil and natural gas sector [1] - Crude Value Insights offers an investing service and community that emphasizes cash flow generation from companies, leading to potential value and growth [1] Group 2 - Subscribers to Crude Value Insights gain access to a 50+ stock model account and in-depth cash flow analyses of exploration and production (E&P) firms [2] - The service includes live chat discussions about the oil and gas sector, enhancing community engagement and information sharing [2] Group 3 - A promotional offer is available for a two-week free trial, encouraging new users to explore the oil and gas investment opportunities [3]

Financial Data and Key Metrics Changes - Organic sales growth for 2024 was 1.5%, which was below expectations due to lower incidences of cough, cold, and flu impacting the pediatric pain franchise and reduced distributor orders in Asia Pacific, particularly China [7][17] - Adjusted diluted EPS for the year was $1.14, within the guidance range [8][45] - Adjusted gross margin increased by 200 basis points year-over-year to 60.4%, significantly ahead of pre-COVID levels [11][12] Business Line Data and Key Metrics Changes - Self-care segment grew organic sales by 2.9% in Q4, with pediatric pain experiencing a significant decline due to a low flu season [19][39] - Essential health organic sales decreased by 0.7% in Q4, primarily due to reduced customer orders in Asia Pacific, particularly China [21][42] - Skin health and beauty delivered 2.6% organic sales growth in Q4, with strong performance in EMEA and Latin America [23][50] Market Data and Key Metrics Changes - In North America, self-care segment growth was hindered by a decline in pediatric pain, while essential health grew mid-single digits outside Asia Pacific [21][42] - EMEA experienced its 11th consecutive quarter of organic sales growth, with major brands like Neutrogena and Aveeno performing well [24][25] Company Strategy and Development Direction - The company aims to accelerate profitable growth and sustainable value creation as it completes its operational separation from Johnson & Johnson [28][30] - Plans for 2025 include launching 40% more innovations compared to 2024 and strengthening retailer partnerships [32][33] - The company is focusing on a new operating model to enhance agility and efficiency, with a goal of achieving $350 million in annualized savings by 2026 [12][44] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in achieving 2% to 4% organic sales growth in 2025, despite a challenging external environment [30][48] - The company anticipates that the first half of 2025 will be impacted by destocking and strategic investments, with stronger growth expected in the second half [52][54] - Management highlighted the importance of consumer health and the need for competitive pricing strategies to drive volume growth [96][101] Other Important Information - The company is implementing new data and analytics initiatives to enhance revenue growth management and improve financial forecasting [46][47] - Adjusted operating margin for the full year was 21.5%, aligning with the guidance range [44][55] Q&A Session Summary Question: Clarification on organic sales growth guidance for 2025 - Management indicated that the low pediatric pain incidents and distribution issues in China would impact Q1 results, with a drag of about three to four points expected [66][70] Question: Category growth assumptions and Q2 expectations - Management expects a slowdown in category growth from 3% to 4% to 2% to 3% in 2025, with Q2 showing an acceleration but not reflecting the full strength of plans due to ongoing issues in China [76][80] Question: Insights on skin health and beauty innovation pipeline - Management confirmed a strong innovation pipeline for skin health and beauty, with plans to amplify efforts in distribution and marketing campaigns in 2025 [84][90] Question: Temporary trade investments and pricing realization - Management explained that strategic pricing investments would lead to negative value realization in the US in the first half of 2025, with expectations for positive realization in the second half [101][103] Question: Self-care segment margins and trajectory - Management advised against placing too much emphasis on quarterly segment margins, noting that the pediatric business decline impacted mix temporarily, but expects an acceleration in self-care gross margin in 2025 [111][113] Question: Margin trajectory and risk mitigation plans regarding tariffs - Management indicated that margin evolution would follow a muted trajectory in Q1, with an acceleration expected in subsequent quarters, and confirmed readiness to address potential tariff impacts [120][122]

Core Insights - Kenvue reported revenue of $3.66 billion for the quarter ended December 2024, a slight decline of 0.1% year-over-year, and EPS of $0.26, down from $0.31 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $3.77 billion by 2.94%, while the EPS met the consensus estimate [1] Financial Performance Metrics - Net Sales in Self Care reached $1.57 billion, slightly below the estimated $1.59 billion, reflecting a year-over-year increase of 2.1% [4] - Net Sales in Essential Health totaled $1.08 billion, missing the average estimate of $1.17 billion, representing a decline of 4.1% year-over-year [4] - Net Sales in Skin Health and Beauty amounted to $1.01 billion, slightly below the estimated $1.02 billion, with a year-over-year increase of 1% [4] - Adjusted Operating Income for Self Care was $481 million, below the estimate of $593.82 million [4] - Adjusted Operating Income for Essential Health was $248 million, significantly above the estimate of $81.11 million [4] - Adjusted Operating Income for Skin Health and Beauty was $105 million, falling short of the estimated $190.78 million [4] Stock Performance - Kenvue's shares have returned -1.7% over the past month, contrasting with the Zacks S&P 500 composite's increase of 2.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Paul Ruh Chief Financial Officer Sofya Tsinis Vice President of Investor Relations 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 position, and business strategy. Forward-looking statements may be identified by the use of words such ...

Kenvue posted mixed Q4 earnings, with in-line EPS but revenue below estimates, driven by challenges in its Skin Health and Beauty segment.Consumer healthcare products specialist Kenvue (KVUE -0.05%) reported mixed fourth-quarter and full-year earnings on Thursday, Feb. 6. Adjusted earnings per share (EPS) of $0.26 aligned with the market's consensus expectations. Revenue came in at $3.66 billion, falling short of the $3.76 billion estimate and effectively flat when compared to Q4 2023. Despite some headwind ...