01—Abstract
Summary
Summary of the 10-Q filed August 6, 2026. Cited figures are marked; the original filing is the authoritative source.
Kenvue Inc. reported net sales of $3.96 billiona for the fiscal three months ended June 28, 2026, up from $3.84 billion a year earlier, and net income of $456 million, up from $420 million.
For the fiscal six months, net sales were $7.86 billionb and net income was $930 million, compared with $7.58 billion and $742 million in the prior-year period. Segment adjusted operating income for the six months rose to $2.11 billion from $1.92 billion, led by Skin Health and Beauty, while Essential Health's three-month segment adjusted operating income declined. Organic sales grew 1.6% in the quarter and 1.2% for the six months, with pricing and volume both contributing.
The pending merger with Kimberly-Clark remains the central event. Kenvue shareholders approved the Merger Agreement on January 29, 2026, and the HSR waiting period expired on February 4, 2026. Completion is still subject to foreign regulatory approvals, and the filing states the transaction is expected to close in the fourth quarter of 2026.
Shareholders would receive 0.14625 shares of Kimberly-Clark common stock plus $3.50c in cash per share, with Kenvue holders expected to own about 46% of the combined company. Restructuring charges under the 2026 Restructuring Initiative, approximately $250 million for fiscal 2026, weighed on operating results and are expected to yield about $200 million in annualized gross cost savings. Balance sheet and cash flow were stable.
Cash and cash equivalents were $1.11 billiond, total debt was $8.48 billion, and operating cash flow for the six months was $1.18 billion. The company repaid $750 million of 5.35% Senior Notes due 2026 and paid $796 million in dividends. Litigation remains significant, notably acetaminophen, talc, and phenylephrine matters, though the company states the outcome is not expected to have a material adverse effect on its financial position, and it has accrued for certain matters deemed probable and estimable.
02—Key points
Key Highlights
- Net sales rose 3.0% to $3.96 billion in the fiscal Q2 2026 quarter, with Organic sales up 1.6%, driven by 0.9% value realization and 0.7% volume growth.
- Net income increased to $456 million for the quarter from $420 million, and diluted EPS was $0.24 versus $0.22 a year earlier.
- Six-month net income reached $930 million, up from $742 million, and operating income rose to $1.47 billion from $1.25 billion.
- Skin Health and Beauty segment adjusted operating income rose 24.8% in the quarter to $186 million, while Essential Health declined 10.3% to $315 million.
- Pending Transaction with Kimberly-Clark: shareholders receive 0.14625 K-C shares plus $3.50 cash per share; closing expected in Q4 2026 subject to foreign regulatory approvals.
- Cash and cash equivalents were $1.11 billion and total debt was $8.48 billion as of June 28, 2026; $750 million of 5.35% Senior Notes were redeemed in February 2026.
- Quarterly dividend declared at $0.2075 per share, with a July 29, 2026 announcement of a 1.2% increase to $0.21 per share.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Kenvue kept $0.12.
- Revenue$3.96B100.0%
- Cost of revenue−$1.65B41.8%
- Gross profit$2.30B58.2%
- Operating costs−$1.60B40.5%
- Operating income$699.0M17.7%
- Interest, other & tax−$243.0M6.1%
- Net income$456.0M11.5%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 6, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $3.96B$3.84B | +3.0% |
| Cost of Revenue | $1.65B$1.58B | +4.8% |
| Gross Profit | $2.30B$2.26B | +1.8% |
| R&D Expenses | $94.00M$91.00M | +3.3% |
| SG&A Expenses | $1.54B$1.50B | +2.2% |
| Operating Income | $699.00M$692.00M | +1.0% |
| Interest Expense | $103.00M$107.00M | −3.7% |
| Net Income | $456.00M$420.00M | +8.6% |
| EPS (Basic) | $0.24$0.22 | +9.1% |
| EPS (Diluted) | $0.24$0.22 | +9.1% |
| Shares Outstanding (Basic) | 1.92B1.92B | +0.1% |
| Shares Outstanding (Diluted) | 1.92B1.93B | −0.3% |
05—Questions
Frequently Asked Questions
What is the status of the Kimberly-Clark merger?
Kenvue and Kimberly-Clark signed a Merger Agreement on November 2, 2025. Both shareholder groups approved it on January 29, 2026, and the HSR waiting period expired on February 4, 2026. The transaction still requires a number of foreign regulatory approvals and other customary closing conditions, and the company expects it to close in the fourth quarter of 2026.
What will Kenvue shareholders receive in the Pending Transaction?
Each Kenvue shareholder will receive 0.14625 shares of Kimberly-Clark common stock plus $3.50 in cash. Kenvue shareholders are expected to own approximately 46% of the combined company on a fully diluted basis, and Kimberly-Clark shareholders approximately 54%.
What drove the earnings improvement this quarter?
Net income rose to $456 million from $420 million, supported by a lower provision for taxes of $142 million versus $168 million, which reflected a valuation allowance release and changes in the jurisdictional mix of income. Gross profit increased $40 million, while SG&A rose $33 million, partly due to Pending Transaction costs.
What are the main litigation risks disclosed?
The filing discusses acetaminophen product liability claims, talc-related lawsuits (including Johnson's Baby Powder claims in the U.K., Australia, and Scotland), phenylephrine and benzoyl peroxide class actions, and Zantac indemnification matters. The company states it cannot reasonably estimate the likelihood or magnitude of potential liability for many of these matters, and that the ultimate outcome is not expected to have a material adverse effect on its financial position, though results could be affected in any given period.
How is Kenvue managing its restructuring and costs?
The Board approved the 2026 Restructuring Initiative on February 17, 2026, with expected pre-tax charges of approximately $250 million in fiscal 2026. Charges through the six months totaled $147 million, and the company expects about $200 million in annualized pre-tax gross cost savings on completion.
06—Continue