Kenvue (KVUE) Q2 earnings report 2023

Kenvue, a unit of Johnson & Johnson’s consumer health business.

CFOTO | Future Publishing | Getty Images

Kenvue reported second-quarter revenue and adjusted earnings that topped expectations Thursday in the consumer health company’s first quarterly report since it spun out from Johnson & Johnson two months ago.

The company also issued an upbeat sales outlook for 2023.

Kenvue, formerly J&J’s consumer health division, holds a wealth of widely known brands such as Band-Aid, Tylenol, Listerine, Neutrogena, Aveeno and J&J’s namesake baby powder. 

But J&J still owns a 90% stake in Kenvue, meaning it can generally control the direction of the spinoff’s business for now. J&J will reduce its stake in Kenvue later this year. 

J&J reported its own second-quarter earnings on Thursday, which included Kenvue’s results. 

Here’s how Kenvue results compared with Wall Street expectations, based on a survey of analysts by Refinitiv:

  • Earnings per share: 32 cents adjusted, vs. 30 cents expected
  • Revenue: $4.01 billion, vs. $3.96 billion expected

Shares of Kenvue were flat in premarket trading Thursday. After a strong debut on the public market in May, the stock has struggled as investors question how much growth the company can deliver with its iconic brands as consumers pull back on spending. 

Kenvue’s stock has shed more than 7% since it debuted on the public market, dragging its market value down to roughly $47.9 billion. 

Unlike most recent IPOs, Kenvue is already profitable. 

The company posted second-quarter sales of $4.01 billion, up 5.4% from the same period a year ago. 

It reported a net income of $430 million, or 23 cents per share, compared with $604 million, or 35 cents per share, a year earlier. Excluding certain items, the company’s adjusted earnings were 32 cents a share.

Kenvue is forecasting 2023 sales growth of 4.5% to 5.5%. The company’s full-year adjusted earnings outlook is $1.26 to $1.31 per share. 

In April following its IPO, Kenvue said it expects annual sales growth through 2025 to be about 3% to 4% globally. 

Kenvue’s IPO still left J&J liable for thousands of allegations that its talc baby powder and other talc products caused cancer.

Those products fall under the company’s consumer-health business, now Kenvue, but the spinoff will assume only talc-related liabilities that arise outside the U.S. and Canada, according to its IPO filing from January.

There are only a “small number” of lawsuits outside of the U.S. and Canada that “we do not consider material at this stage,” Kenvue’s CEO Thibaut Mongon said at the Deutsche Bank Global Consumer Conference last month. 

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