01—Abstract
Summary
Summary of the 10-K filed February 24, 2025. Cited figures are marked; the original filing is the authoritative source.
Kenvue Inc. reported fiscal 2024 Net sales of $15.5 billiona, essentially flat versus $15.4 billion in fiscal 2023 (an increase of $11 million, or 0.1%).
Organic sales grew $230 millionb, or 1.5%, driven by favorable value realization of 2.7%, partially offset by volume declines of 1.2%. Gross profit margin expanded 200 basis points to 58.0%, reflecting supply chain optimization benefits, but operating income fell 26.7% to $1.84 billion. The decline was driven by $578 million of impairment charges, mainly a $488 million non-cash charge on the Dr.Ci:Labo® skin health business, and $185 million of restructuring expenses under the 2024 Multi-Year Restructuring Initiative.
Net income decreased 38.1% to $1.03 billionc, or $0.54 per diluted share, from $1.66 billion, or $0.90 per diluted share. Segment results were mixed. Self Care net sales rose 1.2% to $6.5 billion, and Essential Health rose 1.6% to $4.7 billion with segment adjusted operating income up 14.9%.
Skin Health and Beauty net sales fell 3.2% to $4.2 billiond, with adjusted operating income down 10.6%, reflecting volume declines in the United States and competitive pressures. Operating cash flow decreased to $1.77 billion from $3.17 billion, mainly due to working capital changes. Cash and cash equivalents ended the year at $1.07 billion, and total debt was $8.6 billion.
Kenvue paid $1.55 billion in dividends and repurchased $235 million of stock during the year. The filing highlights ongoing exposure to talc-related and other product liability litigation.
J&J has agreed to indemnify Kenvue for Talc-Related Liabilities in the United States and Canada, but Kenvue remains responsible for talc exposure claims outside those markets. The company also faces litigation related to acetaminophen, Zantac, and phenylephrine, and it expects the 2024 Multi-Year Restructuring Initiative to yield approximately $350 million in annualized gross savings beginning in fiscal 2026.
02—Key points
Key Highlights
- Net sales were $15.46 billion in fiscal 2024, up 0.1% from $15.44 billion; organic sales grew 1.5%, led by 2.7% favorable value realization and offset by 1.2% volume decline.
- Gross profit margin expanded 200 basis points to 58.0%, attributed to supply chain optimization initiatives and value realization.
- Operating income fell 26.7% to $1.84 billion, driven by $578 million in impairment charges (including $488 million for Dr.Ci:Labo®) and $185 million in restructuring expenses.
- Net income declined 38.1% to $1.03 billion ($0.54 per diluted share) from $1.66 billion ($0.90 per diluted share) in fiscal 2023.
- Segment performance diverged: Essential Health adjusted operating income rose 14.9% to $1.16 billion, while Skin Health and Beauty fell 10.6% to $607 million and Self Care fell 5.5% to $2.17 billion.
- Operating cash flow decreased 44.2% to $1.77 billion, reflecting working capital changes; dividends paid totaled $1.55 billion and $235 million was used for share repurchases.
- The 2024 Multi-Year Restructuring Initiative is expected to total about $550 million in pre-tax charges, with approximately $350 million in annualized gross cost savings expected beginning in fiscal 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Kenvue kept $0.07.
- Revenue$15.46B100.0%
- Cost of revenue−$6.50B42.0%
- Gross profit$8.96B58.0%
- Operating costs−$7.12B46.1%
- Operating income$1.84B11.9%
- Interest, other & tax−$811.0M5.2%
- Net income$1.03B6.7%
Where FY2024 revenue went
$15.46B- Cost of revenue: $6.50B, 42% of revenue
- SG&A: $6.33B, 41% of revenue
- Net income: $1.03B, 6.7% of revenue
- R&D: $408.0M, 2.6% of revenue
- Other operating costs: $381.0M, 2.5% of revenue
- Interest, other & tax: $811.0M, 5.2% of revenue
Kept 6.7% as net incomeNet income $1.03B · 6.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 24, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $15.46B$15.44B | +0.1% |
| Cost of Revenue | $6.50B$6.80B | −4.5% |
| Gross Profit | $8.96B$8.64B | +3.7% |
| R&D Expenses | $408.00M$399.00M | +2.3% |
| SG&A Expenses | $6.33B$6.14B | +3.1% |
| Operating Income | $1.84B$2.51B | −26.7% |
| Interest Expense | $431.00M$358.00M | +20.4% |
| Net Income | $1.03B$1.66B | −38.1% |
| EPS (Basic) | $0.54$0.90 | −40.0% |
| EPS (Diluted) | $0.54$0.90 | −40.0% |
| Shares Outstanding (Basic) | 1.92B1.85B | +3.7% |
| Shares Outstanding (Diluted) | 1.92B1.85B | +3.9% |
05—Questions
Frequently Asked Questions
What drove the decline in Kenvue's operating income and net income in fiscal 2024?
Operating income fell 26.7% to $1.84 billion, mainly because of $578 million in impairment charges, including a $488 million non-cash charge tied to the Dr.Ci:Labo® skin health business, and $185 million in restructuring expenses. Net income declined 38.1% to $1.03 billion, and the effective tax rate rose to 27.2% from 24.0%.
How did Kenvue's business segments perform?
Self Care net sales increased 1.2% to $6.53 billion, but segment adjusted operating income fell 5.5% to $2.17 billion. Skin Health and Beauty net sales decreased 3.2% to $4.24 billion, with adjusted operating income down 10.6% to $607 million, due to U.S. volume declines and competitive pressure. Essential Health net sales rose 1.6% to $4.69 billion, and adjusted operating income increased 14.9% to $1.16 billion.
What is the status of talc-related litigation exposure?
J&J retained Talc-Related Liabilities for products sold in the United States and Canada and agreed to indemnify Kenvue for them. Kenvue remains responsible for talc-related liabilities for products sold outside those markets, and it is subject to claims there that are in early stages and cannot be reasonably estimated. The filing notes that J&J's ability to fully satisfy its indemnity obligations is not assured.
What is Kenvue's liquidity and debt position at the end of fiscal 2024?
Kenvue had $1.07 billion in cash and cash equivalents, $4.0 billion of revolving credit facility capacity with no amounts drawn, and $797 million of outstanding commercial paper. Total debt was $8.61 billion, and the company stated it was in compliance with all debt covenants. Management believes existing cash and operating cash flow are sufficient to meet obligations for at least the next 12 months.
What are the expected benefits and costs of the 2024 Multi-Year Restructuring Initiative?
The initiative is expected to result in pre-tax restructuring expenses and other charges of approximately $550 million, planned at about $275 million each in fiscal 2024 and 2025. Fiscal 2024 spend came in lower than planned, and Kenvue expects to realize full annualized pre-tax gross cost savings of approximately $350 million beginning in fiscal 2026, with part of the benefit reinvested in advertising and promotion.
06—Continue