Kenvue (KVUE) Q1 2025 earnings summary

Executive summary

• Entered 2025 with plans to accelerate profitable growth, leveraging a resilient portfolio of consumer health brands and strong execution despite macroeconomic and seasonal headwinds.

• Q1 2025 results delivered amid a dynamic environment, with consumption outpacing organic sales across all segments due to destocking in Asia and strategic price investments in the U.S.

• Net sales for Q1 2025 were $3.74B, down 3.9% year-over-year, with organic sales declining 1.2% due to volume and price pressures, especially in Skin Health and Beauty and Self Care outside the US.

• Announced CFO transition: Amit Banati to succeed Paul Ruh, aiming to further strengthen financial and operational leadership.

• New global headquarters opened in Summit, NJ, consolidating seven US locations to enhance collaboration and speed.

Financial highlights

• Q1 2025 net sales: $3.74B (down 3.9% year-over-year); organic sales down 1.2%.

• Adjusted gross margin at 60.0%, down 20 bps year-over-year; adjusted operating margin contracted 220 bps to 19.8%.

• Adjusted net income was $465M; adjusted diluted EPS $0.24 (down from $0.28), including a $0.02 currency headwind.

• Net income: $322M (up from $296M); diluted EPS: $0.17 (up from $0.15).

• Free cash flow improved to $0.2B from $0.1B year-over-year.

Outlook and guidance

• Maintained organic sales growth outlook for 2025 at 2%-4%, expecting muted first half and acceleration in the back half.

• FY 2025 net sales expected to grow 1%-3% year-over-year.

• Adjusted operating margin and EPS guidance updated to reflect $150M tariff impact and FX, now expecting flat adjusted diluted EPS for 2025.

• Adjusted effective tax rate forecasted at 25.5%-27.5% for 2025.

• Company is implementing mitigation actions to offset tariff impacts.