Core Insights - Kenvue reported Q4 earnings that exceeded analyst expectations, with adjusted EPS of $0.27 compared to the expected $0.22, and revenue of $3.78 billion surpassing the consensus of $3.68 billion [1] - The company is moving forward with its $48.7 billion acquisition of Kimberly-Clark, which has received shareholder approval and is expected to close in the second half of 2026 [1] - Kenvue announced a 3.5% workforce reduction, anticipating $250 million in restructuring charges as part of its merger integration strategy [1] Financial Performance - Kenvue's Q4 performance showed a 1.2% organic sales growth after three consecutive quarters of decline, although full-year net sales decreased slightly to $15.12 billion [1] - The company achieved a full-year adjusted diluted EPS of $1.08, exceeding its guidance of $1.00 to $1.05 [1] - Gross margin improved to 59.1% in Q3 from 58.5% year-over-year, attributed to supply chain optimizations, which continued to benefit Q4 results [1] Merger and Restructuring - The $48.7 billion acquisition of Kimberly-Clark is progressing, with U.S. antitrust clearance secured, while other regulatory approvals are still pending [1] - The stock is trading near the implied deal value of $19.10 to $19.50 per share, indicating a spread of approximately 4% [1] - Management's decision to reduce the workforce by 3.5% reflects a focus on cost discipline in preparation for the merger [1] Investor Considerations - Attention is shifting to regulatory clearance milestones and integration planning as the merger timeline extends into the second half of 2026 [1] - Kenvue launched its Neutrogena Evenly Clear product line in February 2026, indicating ongoing brand investment despite the acquisition [1] - The dividend yield stands at 4.5%, but the payout ratio above 110% raises questions about sustainability post-merger [1]