01—Abstract
Summary
Summary of the 8-K filed August 7, 2025. Cited figures are marked; the original filing is the authoritative source.
Kenvue Inc. (NYSE: KVUE) reported second-quarter 2025 results for the fiscal quarter ended June 29, 2025, with net sales of $3,839 milliona, down 4.0% from $4,000 million a year earlier.
The decline was driven by an Organic sales decline of 4.2%, comprising unfavorable value realization of 0.9% (reflecting planned strategic price investments) and a 3.3% volume decline, partially offset by a 0.3% foreign currency benefit. Diluted EPS was $0.22b versus $0.03 in the prior-year period, while Adjusted diluted EPS was $0.29 versus $0.32. Gross profit margin was 58.9% versus 59.1%, and Adjusted gross profit margin was 60.9% versus 61.6%.
Operating income margin improved to 18.0% from 3.9%, although the prior-year figure was affected by impairment charges; Adjusted operating income margin was 22.7% versus 22.8%. The company revised its full-year 2025 outlook downward. It now expects net sales and Organic sales to be down low-single-digits, with approximately neutral foreign currency impact, Adjusted operating income margin to decline year-over-year, and Adjusted diluted EPS in the range of $1.00 to $1.05c, including a low-single-digit unfavorable foreign currency impact.
The outlook assumes current foreign exchange rates and the estimated impact of tariffs in place as of August 6, 2025. Governance and strategy developments were also announced. The Board's comprehensive review of strategic alternatives continues under a Strategic Review Committee, with the Board considering a broad range of alternatives including optimizing the brand portfolio.
Kirk Perry, a current director, was appointed Interim Chief Executive Officer effective July 14, 2025, and Amit Banati became Chief Financial Officer effective May 12, 2025. The filing also disclosed additional leadership appointments, including Anindya (Andy) Dasgupta as Group President, Asia Pacific, and Michael Wondrasch as Chief Technology & Data Officer effective August 25, 2025.
02—Key points
Key Highlights
- Net sales fell 4.0% to $3,839 million, with Organic sales down 4.2% driven by a 3.3% volume decline and 0.9% unfavorable value realization.
- Diluted EPS rose to $0.22 from $0.03, but Adjusted diluted EPS declined to $0.29 from $0.32 year over year.
- Adjusted operating income margin was 22.7% versus 22.8% a year earlier, while Adjusted gross profit margin fell to 60.9% from 61.6%.
- Full-year 2025 outlook was revised: Adjusted diluted EPS now expected between $1.00 and $1.05, with net sales and Organic sales down low-single-digits.
- Strategic review of alternatives continues under a Strategic Review Committee, with the Board considering a broad range of options including brand portfolio optimization.
- Leadership changes include Kirk Perry as Interim CEO effective July 14, 2025, and Amit Banati as CFO effective May 12, 2025.
- Net debt was $7.5 billion as of June 29, 2025, with free cash flow of $0.8 billion for the six months ended June 29, 2025.
03—Questions
Frequently Asked Questions
Why did Kenvue's sales decline in the second quarter of 2025?
The filing attributes the 4.0% decline in net sales primarily to a 4.2% Organic sales decline, which included a 3.3% volume decline and 0.9% unfavorable value realization reflecting planned strategic price investments. The volume decline was linked to sequential deceleration in category growth, weak allergy and sun seasons in North America, trade inventory fluctuations at certain customers, and shipment timing changes in China. A 0.3% foreign currency benefit partially offset the decline.
How did Kenvue change its 2025 financial outlook?
The company revised its full-year 2025 outlook to expect net sales and Organic sales to be down low-single-digits with approximately neutral foreign currency impact. Adjusted operating income margin is expected to decline year over year, and Adjusted diluted EPS is expected to be between $1.00 and $1.05, including a low-single-digit unfavorable foreign currency impact. The outlook reflects year-to-date results and assumes current foreign exchange rates and tariffs in place as of August 6, 2025.
What is the status of Kenvue's strategic alternatives review?
The Board continues its comprehensive review of strategic alternatives, overseen by a Strategic Review Committee. The Board is considering a broad range of potential alternatives, including optimizing the brand portfolio, while also working to improve execution and operating performance. The company stated it plans to update shareholders as the review progresses, and the filing notes the process may be suspended or modified at any time and may not result in a transaction.
Who is leading Kenvue following recent management changes?
Kirk Perry, a current Kenvue director, was appointed Interim Chief Executive Officer effective July 14, 2025, following a CEO transition announced by the Board in July. Amit Banati was selected as Chief Financial Officer effective May 12, 2025. Anindya (Andy) Dasgupta was appointed Group President, Asia Pacific, effective July 14, 2025, and Michael Wondrasch will become Chief Technology & Data Officer effective August 25, 2025.
Why did reported and adjusted EPS move in different directions?
Reported diluted EPS rose to $0.22 from $0.03, largely because the prior-year period included $510 million in impairment charges. Adjusted diluted EPS, which excludes items such as separation-related costs, restructuring expenses, and amortization of intangible assets, declined to $0.29 from $0.32. The filing attributes the Adjusted operating margin trend to lower gross profit margins from unfavorable mix, inflationary and foreign exchange headwinds, and strategic price investment, partly offset by productivity savings and Our Vue Forward savings.
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