Kenvue beat Wall Street estimates for first-quarter profit and said it would cut 4% of its global workforce amid the Tylenol and Band-Aid maker's efforts to expand its key brands.
Since its spinoff from Johnson & Johnson last year, Kenvue has focused on its 15 priority brands to boost growth and said in February it would increase its advertising spending by 15%, or about $300 million (€278.6 million), during the year.
The company said it targets pre-tax gross savings of about $350 million (€325.1 million) annually by 2026 through the cost-cutting programme, but will incur $275 million (€255.4 million) each in restructuring expenses in 2024 and 2025.
The consumer health firm had 22,000 employees as of December end, according to its annual report.
'Strategic Priorities'
“We entered 2024 with clear strategic priorities to reach more consumers, reinvent our ways of working to invest more behind our brands, and to foster a culture that rewards performance and impact,” said chief executive officer, Thibaut Mongon.
“We began executing against these priorities during the quarter, enabling a solid start to the year and advancing Kenvue forward in our ambition to become the undisputed leader in consumer health.”
Quarterly Performance
Kenvue posted an adjusted profit of 28 cents per share for the first quarter, beating analysts' estimates of 26 cents.
"Given where investor expectations are for (Kenvue), we believe this was a solid overall print and its least noisy since becoming a public company," RBC Capital Markets analyst Nik Modi said in a note.
The self-care segment – which includes cough and cold medicine such as Tylenol and Benadryl – recorded $1.70 billion (€1.6 billion) in net sales, up 3.5% year-on-year and above the average analyst estimate of $1.56 billion (€1.5 billion), according to LSEG data.
Kenvue's skin health and beauty segment, consisting of brands including Neutrogena and Clean & Clear, recorded a 5% drop in first-quarter sales to $1.05 billion (€980 million), but largely in line with estimates.
The company has pushed to improve the presence of its skin health products on store shelves in the US as it looks to reverse sluggish sales over the last few quarters.
The essential health segment, housing brands such as Listerine, Band-Aid and Stayfree, recorded $1.14 billion (€1.06 billion) in sales, up 3.7%, but below analysts' estimate of $1.17 billion (€1.09 billion).
The New Jersey-based company posted first-quarter revenue of $3.89 billion (€3.6 billion), beating estimates of $3.79 billion (€3.5 billion).
The company maintained its annual profit forecast range of between $1.10 to $1.20 per share.
News by Reuters, additional reporting by ESM.
