Kenvue Inc. Reports Mixed Q3 and Nine-Month Results, Net Sales Down 0.4%

Kenvue Inc. reported its financial results for the fiscal three and nine months ended September 29, 2024, reflecting a mixed performance compared to the previous fiscal period. For the third quarter, net sales reached $3,899 million, a slight decrease of $16 million (0.4%) from $3,915 million in the same period last year. Excluding unfavorable foreign currency impacts, organic growth was $34 million (0.9%). The nine-month period saw net sales increase marginally to $11,793 million from $11,778 million, marking a $15 million (0.1%) rise.

Gross profit for the third quarter improved to $2,282 million, up $32 million (1.4%) year-over-year, while gross profit margin increased to 58.5% from 57.5%. However, operating income declined to $654 million, down $56 million (7.9%) from $710 million in the prior year. For the nine months, operating income fell significantly to $1,358 million from $2,052 million, a decrease of $694 million (33.8%). Net income for the third quarter was $383 million, down $55 million (12.6%) from $438 million, and for the nine months, it dropped to $737 million from $1,337 million, a decline of $600 million (44.9%).

The company’s restructuring initiative, initiated in May 2024, is expected to incur approximately $550 million in pre-tax expenses over two years, with $146 million already recorded. Separation-related costs decreased to $85 million in the third quarter from $133 million in the same period last year. Research and development expenses increased to $97 million from $78 million year-over-year.

Kenvue's total assets as of September 29, 2024, were $26,925 million, down from $27,851 million at the end of 2023. Total equity also decreased to $10,644 million from $11,211 million. Cash and cash equivalents fell to $1,057 million from $1,382 million, while total debt rose to $8,701 million from $8,286 million.

Segment performance varied, with the Self Care segment reporting net sales of $1,625 million, a slight increase, while the Skin Health and Beauty segment saw a decrease to $1,072 million. The Essential Health segment's sales remained stable at $1,202 million. Adjusted operating income for the Self Care segment decreased, while the Essential Health segment saw an increase.

Kenvue's strategic focus includes enhancing operational efficiencies and managing costs amid inflationary pressures and foreign currency risks. The company continues to navigate its post-IPO landscape, having fully separated from Johnson & Johnson in August 2023.