What drove the decline in Kenvue's fourth-quarter 2024 results?

Management attributed softer-than-expected sales to weak incidences of cold, cough and flu, which caused a significant decline in the pediatric pain franchise, and to go-to-market disruption in Asia Pacific that had an outsized impact on Essential Health. Foreign currency also reduced reported net sales by 1.8%.

Why did GAAP earnings fall more than adjusted earnings for full-year 2024?

GAAP results were impacted by non-cash impairment charges of $578 million, along with restructuring expenses of $185 million and separation-related costs. Adjusted diluted EPS excludes these items and was $1.14 versus $1.29 in 2023.

What is Kenvue's 2025 guidance?

Kenvue expects net sales change of -1% to +1%, organic sales growth of +2% to +4%, a roughly 3% foreign currency headwind, improvement in adjusted operating income margin, and adjusted diluted EPS growth of flat to +2%, including a mid-single-digit unfavorable currency impact. The outlook does not include potential impacts from tariffs introduced in 2025.

How did Kenvue's profitability and cash flow change in 2024?

Gross profit margin improved 200 basis points to 58.0%, but higher brand investment reduced adjusted operating income margin to 21.5% from 22.4%. Interest expense, net increased to $378 million from $250 million, and free cash flow declined to $1.3 billion from $2.7 billion.

Which of Kenvue's segments and regions were strongest or weakest?

Essential Health's net sales rose to $4.69 billion for the year, and its adjusted operating income increased to $1.16 billion from $1.01 billion. Skin Health and Beauty net sales fell to $4.24 billion from $4.38 billion, with adjusted operating income declining to $607 million from $679 million. Asia Pacific net sales fell to $2.97 billion from $3.11 billion for the year.

KVUE 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed February 6, 2025. Cited figures are marked; the original filing is the authoritative source.

Kenvue Inc. (NYSE: KVUE) reported full-year and fourth-quarter 2024 results for the periods ended December 29, 2024, in a press release furnished as Exhibit 99.1 to this Form 8-K.

Fourth-quarter net sales decreased 0.1% to $3.66 billion^a, reflecting organic sales growth of 1.7% offset by a 1.8% foreign currency headwind. Fourth-quarter diluted EPS was $0.15 versus $0.17 a year earlier, and adjusted diluted EPS was $0.26 versus $0.31. For full-year 2024, net sales increased 0.1% to $15.46 billion, organic sales grew 1.5%, and gross profit margin expanded 200 basis points to 58.0%.

Full-year diluted EPS was $0.54^b versus $0.90, and adjusted diluted EPS was $1.14 versus $1.29, with the GAAP decline reflecting $578 million of impairment charges. Profitability was pressured by higher brand investment, which more than offset gross margin gains and savings from the Our Vue Forward program. Full-year operating income margin fell to 11.9% from 16.3%, while adjusted operating income margin was 21.5% versus 22.4%.

Interest expense, net rose to $378 million^c from $250 million. Free cash flow was $1.3 billion for 2024 compared with $2.7 billion in 2023, and total debt stood at $8.6 billion at year-end. Management cited softer-than-expected sales growth, weak cold, cough and flu incidences, and go-to-market disruption in Asia Pacific.

For 2025, Kenvue expects net sales change of -1%^d to +1%, with organic sales growth of +2% to +4% and a roughly 3% foreign currency headwind. It also expects adjusted operating income margin to improve and adjusted diluted EPS to be flat to up 2%, including a mid-single-digit unfavorable currency impact. The outlook excludes any impact from tariffs introduced in 2025.

02—Key points

Key Highlights

Q4 2024 net sales were $3.66 billion, down 0.1%, with organic sales up 1.7% and a 1.8% foreign currency headwind.
Q4 2024 diluted EPS was $0.15 (vs. $0.17), and adjusted diluted EPS was $0.26 (vs. $0.31).
FY 2024 net sales rose 0.1% to $15.46 billion, with organic sales growth of 1.5% driven by 2.7% value realization and a 1.2% volume decline.
FY 2024 GAAP diluted EPS was $0.54 (vs. $0.90), including $578 million of impairment charges; adjusted diluted EPS was $1.14 (vs. $1.29).
Gross profit margin expanded 200 basis points to 58.0% for FY 2024, while adjusted operating income margin declined to 21.5% from 22.4% due to higher brand investment.
Free cash flow fell to $1.3 billion from $2.7 billion, and net debt rose to $7.5 billion from $6.9 billion.
2025 outlook: net sales change of -1% to +1%, organic sales growth of +2% to +4%, and adjusted diluted EPS flat to +2%; outlook excludes tariffs introduced in 2025.

03—Questions

Frequently Asked Questions

What drove the decline in Kenvue's fourth-quarter 2024 results?
Management attributed softer-than-expected sales to weak incidences of cold, cough and flu, which caused a significant decline in the pediatric pain franchise, and to go-to-market disruption in Asia Pacific that had an outsized impact on Essential Health. Foreign currency also reduced reported net sales by 1.8%.
Why did GAAP earnings fall more than adjusted earnings for full-year 2024?
GAAP results were impacted by non-cash impairment charges of $578 million, along with restructuring expenses of $185 million and separation-related costs. Adjusted diluted EPS excludes these items and was $1.14 versus $1.29 in 2023.
What is Kenvue's 2025 guidance?
Kenvue expects net sales change of -1% to +1%, organic sales growth of +2% to +4%, a roughly 3% foreign currency headwind, improvement in adjusted operating income margin, and adjusted diluted EPS growth of flat to +2%, including a mid-single-digit unfavorable currency impact. The outlook does not include potential impacts from tariffs introduced in 2025.
How did Kenvue's profitability and cash flow change in 2024?
Gross profit margin improved 200 basis points to 58.0%, but higher brand investment reduced adjusted operating income margin to 21.5% from 22.4%. Interest expense, net increased to $378 million from $250 million, and free cash flow declined to $1.3 billion from $2.7 billion.
Which of Kenvue's segments and regions were strongest or weakest?
Essential Health's net sales rose to $4.69 billion for the year, and its adjusted operating income increased to $1.16 billion from $1.01 billion. Skin Health and Beauty net sales fell to $4.24 billion from $4.38 billion, with adjusted operating income declining to $607 million from $679 million. Asia Pacific net sales fell to $2.97 billion from $3.11 billion for the year.

04—Continue

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