01—Abstract
Summary
Summary of the 8-K filed August 6, 2026. Cited figures are marked; the original filing is the authoritative source.
Kenvue Inc. (NYSE: KVUE) reported results for its fiscal second quarter ended June 28, 2026.
Net sales rose 3.0% to $3,955 milliona, driven by Organic sales growth of 1.6% (value realization of 0.9% and volume growth of 0.7%) and a foreign currency benefit of 1.4%. Diluted EPS increased to $0.24 from $0.22, and Adjusted diluted EPS rose to $0.31 from $0.29. Gross profit margin was 58.2% (vs. 58.9%) and adjusted gross profit margin was 60.2% (vs. 60.9%), with the company citing inflation, tariffs and unfavorable transactional foreign exchange, partly offset by productivity savings and favorable value realization.
Operating income margin was 17.7% (vs. 18.0%) and adjusted operating income margin was 22.1% (vs. 22.7%). Net income was $456 millionb versus $420 million. All three segments grew net sales: Self Care rose 2.2% (Organic growth of 0.6%), Skin Health and Beauty rose 5.1% (Organic growth of 3.7%), and Essential Health rose 2.3% (Organic growth of 1.1%).
For the fiscal six months, operating cash flow was $1.2 billionc versus $1.0 billion, and free cash flow was $1.0 billion versus $0.8 billion. Cash and cash equivalents were $1.1 billion and total debt was $8.5 billion at June 28, 2026, with net debt of $7.4 billion. The company also announced FDA approval of Tylenol with Naproxen.
Kenvue will not provide forward-looking guidance and will not host a conference call because of the pending merger with Kimberly-Clark, which is expected to close in the fourth quarter of 2026 subject to foreign regulatory approvals and other customary closing conditions. Shareholders of both companies approved the transaction on January 29, 2026, and the HSR waiting period expired on February 4, 2026. The 2026 Restructuring Initiative is expected to result in pre-tax charges of approximately $250 milliond in fiscal year 2026.
02—Key points
Key Highlights
- Net sales rose 3.0% to $3,955 million, with Organic sales growth of 1.6% and a 1.4% foreign currency benefit; the company describes this as its third consecutive quarter of net and organic sales growth.
- Diluted EPS was $0.24 versus $0.22 a year earlier; Adjusted diluted EPS was $0.31 versus $0.29.
- Gross profit margin fell to 58.2% from 58.9% (adjusted 60.2% vs. 60.9%), reflecting inflation, tariffs and unfavorable transactional foreign exchange.
- Operating income margin was 17.7% versus 18.0%; adjusted operating income margin was 22.1% versus 22.7%.
- Skin Health and Beauty led segment growth with net sales up 5.1% and Organic sales up 3.7%; Self Care net sales rose 2.2% and Essential Health rose 2.3%.
- Fiscal six-month free cash flow was $1.0 billion versus $0.8 billion; total debt was $8.5 billion and net debt $7.4 billion at June 28, 2026.
- Kenvue will not provide guidance or host a conference call due to the pending Kimberly-Clark transaction, which is expected to close in Q4 2026.
03—Questions
Frequently Asked Questions
Why won't Kenvue provide forward-looking guidance?
The company states that, due to the pending transaction with Kimberly-Clark, it will not be providing forward-looking guidance. It also will not host a quarterly conference call; the release is posted on its investor website.
What is the status of the Kimberly-Clark transaction?
Kenvue entered into a definitive merger agreement with Kimberly-Clark on November 2, 2025. Shareholders of both companies approved the proposals at Special Meetings held January 29, 2026, and the HSR waiting period expired February 4, 2026. The transaction is expected to close in the fourth quarter of 2026, subject to foreign regulatory approvals and other customary closing conditions.
What drove the decline in margins despite higher sales?
Gross profit margin fell to 58.2% from 58.9%, and operating income margin fell to 17.7% from 18.0%. The company attributes the gross margin change primarily to inflation, tariffs and unfavorable transactional foreign exchange, partly offset by productivity savings and favorable value realization. The operating margin change also reflects higher brand support, partly offset by cost savings from restructuring and cost optimization actions.
How did cash flow and the balance sheet look for the first half of 2026?
For the fiscal six months ended June 28, 2026, net cash from operating activities was $1.2 billion versus $1.0 billion, and free cash flow was $1.0 billion versus $0.8 billion. Cash and cash equivalents were $1.1 billion and total debt was $8.5 billion, giving net debt of $7.4 billion.
What is the expected cost of the 2026 Restructuring Initiative?
The 2026 Restructuring Initiative, approved by the Board on February 17, 2026, is expected to result in pre-tax restructuring expenses and other charges totaling approximately $250 million in fiscal year 2026. The second-quarter restructuring expenses and operating model optimization initiatives totaled $69 million.
04—Continue