What did Kenvue report for the first quarter of 2024?

Net sales rose 1.1% to $3,894 million, organic growth was 1.9%, and diluted EPS was $0.15 compared with $0.27 a year earlier. Adjusted diluted EPS was $0.28 versus $0.37.

What is the restructuring initiative and what does it cost?

The Board approved on May 6, 2024 a multi-year initiative expected to reduce the global workforce by a net approximately 4% and generate annualized pre-tax gross cost savings of approximately $350 million, fully realized beginning in fiscal 2026. Pre-tax restructuring expenses and other charges are expected to total approximately $275 million in each of fiscal 2024 and fiscal 2025, about $550 million in total. The company describes these estimates as preliminary and subject to change.

Why did operating margin decline in the quarter?

The filing attributes the decline in reported operating income margin, to 14.1% from 16.6%, primarily to a $68 million impairment charge related to the company's interim headquarters and expenses from its restructuring and optimization initiatives.

What is the company's 2024 outlook?

Kenvue reaffirmed expectations for reported net sales growth of 1.0% to 3.0%, organic growth of 2.0% to 4.0%, Adjusted diluted EPS of $1.10 to $1.20 on 1.92 billion diluted shares, and reported interest expense of approximately $400 million.

How did cash flow and debt change?

Free cash flow was $0.1 billion in Q1 2024 versus $0.7 billion a year earlier. Net debt was $7.4 billion at March 31, 2024, compared with $6.9 billion at December 31, 2023, and cash and cash equivalents were $1.2 billion.

KVUE 8-K: Earnings & Results & Financial Events

01—Abstract

Summary

Summary of the 8-K filed May 7, 2024. Cited figures are marked; the original filing is the authoritative source.

Kenvue Inc. (NYSE: KVUE) filed this Form 8-K on May 7, 2024 to furnish its first quarter 2024 results (quarter ended March 31, 2024) and to disclose a multi-year restructuring initiative approved by the Board on May 6, 2024.

In Q1 2024, net sales rose 1.1% to $3,894 million^a from $3,852 million, with organic growth of 1.9%, comprised of 5.0% value realization and (3.1)% volume. Reported operating income fell to $550 million from $640 million, and operating income margin declined to 14.1% from 16.6%, largely due to a $68 million fixed asset impairment related to the interim headquarters and restructuring-related expenses. Diluted earnings per share were $0.15 versus $0.27 a year earlier, while Adjusted diluted earnings per share were $0.28 versus $0.37.

Adjusted operating income margin improved to 22.0% from 21.3%, and gross profit margin rose to 57.6% from 55.2%. The Board approved the initiative, which the filing says is expected to result in a net global workforce reduction of approximately 4%, annualized pre-tax gross cost savings of approximately $350 million^b upon full realization beginning in fiscal 2026, and pre-tax restructuring expenses and other charges of approximately $275 million in each of fiscal 2024 and fiscal 2025 (about $550 million in total). The company said it expects to reinvest all or a portion of the savings in growth, including advertising and product promotion.

Kenvue reaffirmed its 2024 outlook, including reported net sales growth of 1.0% to 3.0%, organic growth of 2.0% to 4.0%, and Adjusted diluted earnings per share of $1.10 to $1.20^c. Free cash flow for the quarter was $0.1 billion, compared with $0.7 billion a year earlier, and net debt was $7.4 billion at March 31, 2024, up from $6.9 billion at December 31, 2023. The filing notes that the company's cost estimates are preliminary and actual charges may differ materially.

02—Key points

Key Highlights

Q1 2024 net sales increased 1.1% to $3,894 million, with organic growth of 1.9%, driven by value realization of 5.0% partially offset by volume of (3.1)%.
Reported diluted EPS was $0.15 versus $0.27 a year earlier; Adjusted diluted EPS was $0.28 versus $0.37.
Operating income fell to $550 million from $640 million, with operating income margin of 14.1% versus 16.6%, reflecting a $68 million fixed asset impairment tied to the interim headquarters and restructuring costs.
Adjusted operating income margin improved to 22.0% from 21.3%, and gross profit margin rose to 57.6% from 55.2%.
Board approved a multi-year initiative targeting a net global workforce reduction of approximately 4% and annualized pre-tax gross cost savings of approximately $350 million, fully realized beginning fiscal 2026.
The initiative is expected to cost approximately $275 million pre-tax in each of fiscal 2024 and fiscal 2025 (about $550 million total), with the company expecting to reinvest part of the savings in growth.
Free cash flow was $0.1 billion versus $0.7 billion a year earlier, and net debt rose to $7.4 billion from $6.9 billion; 2024 full-year outlook was reaffirmed.

03—Questions

Frequently Asked Questions

What did Kenvue report for the first quarter of 2024?
Net sales rose 1.1% to $3,894 million, organic growth was 1.9%, and diluted EPS was $0.15 compared with $0.27 a year earlier. Adjusted diluted EPS was $0.28 versus $0.37.
What is the restructuring initiative and what does it cost?
The Board approved on May 6, 2024 a multi-year initiative expected to reduce the global workforce by a net approximately 4% and generate annualized pre-tax gross cost savings of approximately $350 million, fully realized beginning in fiscal 2026. Pre-tax restructuring expenses and other charges are expected to total approximately $275 million in each of fiscal 2024 and fiscal 2025, about $550 million in total. The company describes these estimates as preliminary and subject to change.
Why did operating margin decline in the quarter?
The filing attributes the decline in reported operating income margin, to 14.1% from 16.6%, primarily to a $68 million impairment charge related to the company's interim headquarters and expenses from its restructuring and optimization initiatives.
What is the company's 2024 outlook?
Kenvue reaffirmed expectations for reported net sales growth of 1.0% to 3.0%, organic growth of 2.0% to 4.0%, Adjusted diluted EPS of $1.10 to $1.20 on 1.92 billion diluted shares, and reported interest expense of approximately $400 million.
How did cash flow and debt change?
Free cash flow was $0.1 billion in Q1 2024 versus $0.7 billion a year earlier. Net debt was $7.4 billion at March 31, 2024, compared with $6.9 billion at December 31, 2023, and cash and cash equivalents were $1.2 billion.

04—Continue

← View all 8-K filings