Kenvue beat estimates for second-quarter profit and revenue, helped primarily by better-than-expected sales in its essential health products unit that sells brands including Band-Aid, Listerine, and Carefree.
Shares in the company rose in premarket trading.
Investor expectations from the consumer health company, which Johnson & Johnson spun off last year, have been low due to weak uptake for its self-care and skin health products. Its essential health business, however, has been a bright spot.
Essential Health
The essential health unit recorded $1.26 billion (€1.16 billion) in revenue for the second quarter, up nearly 5% from a year earlier and above analysts' average estimate of $1.24 billion (€1.14 billion), according to LSEG data.
Essential health's adjusted operating income jumped nearly 44% to $359 million (€330 million), while other segments declined.
Skin Health
Kenvue's skin health business, which sells brands such as Neutrogena and Clean & Clear, was the worst performer, recording a nearly 4% decline in sales to $1.10 billion (€1.01 billion), compared with LSEG estimate of $1.16 billion (€1.07 billion).
Sales from self-care - its largest segment that houses Benadryl and Tylenol - slipped 1.6% to $1.64 billion (€1.51 billion). Analysts, on average, had expected $1.60 billion (€1.47 billion).
Kenvue has been focusing on improving sales of its skin health products through increased marketing spend and in-store presence, among other measures.
It raised the marketing spend for this year to up to $400 million (€368 million) from $300 million (€276 million) previously. It's the second time it lifted the forecast, after a 15% jump in February.
The New Jersey-based company posted total second-quarter revenue of $4 billion (€3.68 billion), above LSEG estimates of $3.94 billion (€3.63 billion).
On an adjusted basis, Kenvue posted a profit of 32 cents (€0.30) per share, beating analysts' estimates by 4 cents (€0.03).
The company maintained its adjusted profit forecast for the year at between $1.10 and $1.20 per share (€1.01 and €1.10).
'On Track'
“We are on track to deliver the financial targets we set for 2024, and while we are in the early days, our work to transform Kenvue into a bolder, more agile organisation focused on profitable growth is producing results,” said Thibaut Mongon, chief executive.
“With the progress we have made in the first half of the year to increase productivity and free up resources, we are accelerating investment behind our global portfolio of iconic brands to reach more consumers and deliver on our long-term value creation algorithm.”
Additional reporting by ESM
