Kenvue Inc.
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Item 1. Business
Company Overview
At Kenvue, our purpose is to realize the extraordinary power of everyday care. As a global leader at the intersection of healthcare and consumer goods, we are the world’s largest pure-play consumer health company by revenue with $15.1 billion in Net sales in the fiscal year 2025. By combining the power of science with meaningful consumer insights and our digital strategy, we empower consumers to live healthier lives every day. Built on more than a century of heritage and trusted by generations, our differentiated portfolio of iconic brands—including Aveeno®, BAND-AID® Brand, Johnson’s®, Listerine®, Neutrogena®, Nicorette®, Tylenol®, and Zyrtec®—is backed by science and recommended by healthcare professionals, which further reinforces our consumers’ connections to our brands.
Our portfolio includes Self Care, Skin Health and Beauty, and Essential Health products, allowing us to connect with consumers across North America, Asia Pacific (“APAC”), Europe, Middle East, and Africa (“EMEA”), and Latin America (“LATAM”) in their daily rituals and the moments that matter most. Our products are marketed across more than 165 countries worldwide.
Our global scale and the breadth of our brand portfolio are complemented by our well-developed capabilities and accelerated through our digital strategy, allowing us to dynamically capitalize on and respond to current trends impacting our categories and geographic markets.
With a sole focus on consumer health, our marketing organization operates efficiently by leveraging our precision marketing, e-commerce, and broader digital capabilities to develop unique consumer insights and further enhance the relevance of our brands. Similarly, our research and development organization combines these consumer insights with deep, multi-disciplinary scientific expertise, and active engagement with healthcare professionals, to drive innovative new products, solutions, and experiences centered around consumer health.
Underpinned by Kenvue’s Healthy Lives Mission, our comprehensive sustainability strategy, our core capabilities are supported by our commitment to building a resilient and sustainable business that creates value for all our stakeholders over the long term.
Since the Separation from J&J, as described below, we have been significantly transforming, including from exiting the Transition Services Agreement and the Transition Manufacturing Agreement with J&J (as defined in Part I, Item 1A, “Risk Factors—Summary of Risk Factors—Risks Related to Our Relationship with J&J”) while standing up, disentangling, modernizing, and optimizing our own systems, strengthening our Leadership Team, instituting a new operating model, reinventing our ways of working, and enhancing our commercial capabilities. We have been focused on driving productivity and realizing cost savings from Our Vue Forward (as defined in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results—Restructuring”) across the organization to fuel investments behind our brands and unlock operational efficiencies, so that we can drive sustainable and profitable growth.
Proposed Transaction with Kimberly-Clark
On November 2, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Kimberly-Clark Corporation, a Delaware corporation (“K-C” or, with reference to the post-closing period, the “combined company”), Vesta Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of K-C (“First Merger Sub”), and Vesta Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of K-C (“Second Merger Sub”). The Merger Agreement provides for the combination of the Company and K-C upon the terms and subject to the conditions set forth therein (the “Proposed Transaction”), as described in Note 1, “Description of the Company and Summary of Significant Accounting Policies—Proposed Transaction with Kimberly-Clark,” to the Consolidated Financial Statements included herein. On January 29, 2026, our shareholders approved the adoption of the Merger Agreement and K-C’s shareholders approved the issuance of K-C common stock in connection with the Proposed Transaction, in each case at a special meeting of shareholders held for that purpose. Additionally, the waiting period applicable to the Proposed Transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired on February 4, 2026. The Proposed Transaction remains subject to the satisfaction or waiver of other customary closing conditions, including the receipt of a number of foreign regulatory approvals, as described in the Merger Agreement.
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Separation from J&J
In November 2021, J&J, our former parent company, announced its intention to separate its Consumer Health segment (the “Consumer Health Business”) into an independent publicly traded company (the “Separation”). Kenvue was incorporated in Delaware in February 2022, as a wholly owned subsidiary of J&J, to serve as the ultimate parent company of J&J’s Consumer Health Business. In April 2023, J&J completed the transfer of substantially all of the assets and liabilities of the Consumer Health Business to us and our subsidiaries. In May 2023, we completed an initial public offering (the “Kenvue IPO”) and began trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “KVUE.” In July 2023, J&J announced an exchange offer (the “Exchange Offer”) under which its shareholders could exchange shares of J&J common stock for shares of our common stock owned by J&J. In August 2023, J&J completed the Exchange Offer, completing the Separation and Kenvue’s transition to being a fully independent public company. In May 2024, J&J completed an additional exchange offer (the “Debt-for-Equity-Exchange”) through which J&J exchanged indebtedness of J&J for shares of our common stock owned by J&J. Following the completion of the Debt-for-Equity Exchange, J&J did not own any shares of our common stock. See Note 1, “Description of the Company and Summary of Significant Accounting Policies—Description of the Company and Business Segments,” to the Consolidated Financial Statements included herein for additional information.
Relationship with J&J
We entered into a separation agreement (the “Separation Agreement”) and various other agreements with J&J for the purpose of effecting the Separation. These agreements provide a framework for our relationship with J&J and govern various interim and ongoing relationships between us and J&J that follow the completion of the Kenvue IPO. See Note 12, “Relationship with J&J,” to the Consolidated Financial Statements included herein for additional information on these agreements.
Brands and Product Portfolio
We have a world-class, global portfolio of iconic and trusted brands that are leaders in their respective categories and include some of the most recognizable household names across the consumer health industry. Our overall strategy prioritizes operating our portfolio in a highly targeted manner, with the goal of delivering sustainable and profitable growth.
Each of our reportable business segments are focused on driving financial performance by leveraging specific category expertise and capabilities while also benefiting from our scale to collaborate across the organization, including in brand management and marketing, research and development and innovation, insights and analytics, and omnichannel commerce. The reportable business segments are as follows:
•Self Care. Our Self Care product categories include: Cough, Cold, and Allergy; Pain Care; and Other Self Care (Digestive Health, Smoking Cessation, Eye Care, and Other). Major brands in the segment include Benadryl®, Calpol®, Motrin®, Nicorette®, Rhinocort®, Tylenol®, Zarbee’s®, and Zyrtec®. Our Self Care brands offer accessibility to healthcare solutions with over-the-counter (“OTC”) medicines and other naturally inspired products. These brands deliver connected health offerings, including digital diagnostics and telemedicine, to expand personalized solutions to consumers.
•Skin Health and Beauty. Our Skin Health and Beauty product categories include: Face and Body Care; and Hair, Sun, and Other. Major brands in the segment include Aveeno®, Dr.Ci:Labo®, Le Petit Marseillais®, Lubriderm®, Neutrogena®, OGX®, and Rogaine®. Our portfolio of skin and hair care brands focus on dermatological solutions by leveraging partnerships with skin experts and scientific expertise to create differentiated, science-backed products recommended by healthcare professionals.
•Essential Health. Our Essential Health product categories include: Oral Care; Baby Care; and Other Essential Health (Women’s Health, Wound Care, and Other). Major brands in the segment include BAND-AID® Brand, Carefree®, Desitin®, Johnson’s®, Listerine®, o.b.® tampons, and Stayfree®. Our Essential Health brands raise standards of personal care across baby care, wound care, oral care, and menstrual health categories.
Brand Marketing
Our digital approach to marketing places the consumer at the center of all decisions related to our product delivery, service offerings, and the experiences we create. Our global presence allows us to tailor our marketing strategy and campaigns to the distinctive needs of our consumers in local markets throughout the world. It is our global scale and improving modern marketing capabilities that enable deep connections with consumers.
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We leverage insights across our product offerings to understand the constantly changing consumer behaviors and expectations, which allow us to evolve our brand messaging to ensure that we drive relevance with consumers and healthcare professionals, ultimately seeking to increase reach, stimulate demand, and drive growth. Our marketing expertise is built on a combination of human empathy and science that improves health outcomes.
Our consumer-first approach and rigorous clinical testing allows us to articulate science in ways that meet the needs of our consumers and healthcare professionals as we win their trust, endorsement, and loyalty.
We are a digital modern marketing company, and we collaborate with celebrities, influencers, and healthcare professionals to amplify brand awareness and product innovations.
In addition, we continually evaluate the impact of media investments and consumer communications through data science and analytics. We ultimately use media return on investment to evaluate and optimize our investment opportunities. Our digital strategy aims to maximize reach, performance, and returns while reducing costs.
Product Development and Innovation
Our research and development organization combines deep, multi-disciplinary scientific expertise with active engagement with healthcare professionals, placing human empathy at the heart of our product development process. We leverage our extensive capabilities and deep consumer insights to develop innovative products and experiences that meet the specific needs of our consumers, enhancing their overall standard of everyday care.
Across our portfolio of iconic brands, we earn consumers’ trust through modern, science-backed innovations that deliver reliable personal care products and technologies that improve well-being.
Our global team of approximately 1,600 scientists, doctors, pharmacists, and engineers has expertise across a range of core disciplines, including formulation science, regulatory affairs, quality, medical affairs, medical safety, clinical operations, microbiology, translational science, and packaging. The teams collaborate across the product development lifecycle, partnering with consumers and leveraging our long-standing relationships with healthcare professionals and academic institutions to co-create a continuous pipeline of meaningful innovation. Our research and development organization operates a global network of innovation and development hubs located close to consumers in key geographic markets.
We have built extensive capabilities through our translational science and consumer insights teams to understand the key needs and current challenges of our consumers and healthcare professionals, ensuring our products are centered around human empathy. Throughout our end-to-end organization, we have continuous touchpoints with our consumers and healthcare professionals, utilizing a suite of digital tools to ensure we hear from them regardless of their location. Our insights, design, marketing, and research teams then leverage these consumer insights to identify key unmet needs and potential product opportunities.
Supply Chain and Manufacturing
Our global and balanced manufacturing footprint provides us with the flexibility and agility to benefit from economies of scale and global supply chain agreements, enabling us to grow our business and expand margins. We modernize and optimize our supply chain operations while better connecting with and serving our customers. Our end-to-end, digitally connected supply chain ecosystem is designed to optimize the flexibility and agility of our route-to-market. Reliability and resiliency remain our priority throughout our fit-for-purpose supply chain, ensuring that we can deliver our products to our customers and consumers whenever and wherever they need them.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions, and projections about our industry, business, and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in Part I, Item 1A,“Risk Factors,” in our Annual Report on Form 10-K for the fiscal twelve months ended December 28, 2025, filed on February 20, 2026 with the SEC (the “Annual Report”), Part II, Item 1A, “Risk Factors,” included herein, and the section titled “Cautionary Note Regarding Forward-Looking Statements” included herein.
This discussion should be read in conjunction with our accompanying Condensed Consolidated Financial Statements for the fiscal three months ended March 29, 2026, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the SEC for interim financial statements, and our audited consolidated financial statements for the fiscal twelve months ended December 28, 2025, which are included in the Annual Report. In our opinion, the Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, necessary for a fair statement of the financial condition, results of operations, and cash flows for the periods indicated. All currency amounts are expressed in U.S. dollars unless otherwise noted.
Overview
Company Overview
At Kenvue, our purpose is to realize the extraordinary power of everyday care. As a global leader at the intersection of healthcare and consumer goods, we are the world’s largest pure-play consumer health company by revenue with $15.1 billion in Net sales in the fiscal year 2025. By combining the power of science with meaningful consumer insights and our digital strategy, we empower consumers to live healthier lives every day. Built on more than a century of heritage and trusted by generations, our differentiated portfolio of iconic brands—including Aveeno®, BAND-AID® Brand, Johnson’s®, Listerine®, Neutrogena®, Nicorette®, Tylenol®, and Zyrtec®—is backed by science and recommended by healthcare professionals, which further reinforces our consumers’ connections to our brands.
Our portfolio includes Self Care, Skin Health and Beauty, and Essential Health products, allowing us to connect with consumers globally in their daily rituals and the moments that matter most.
Our global scale and the breadth of our brand portfolio are complemented by our well-developed capabilities and accelerated through our digital strategy, allowing us to dynamically capitalize on and respond to current trends impacting our categories and geographic markets.
With a sole focus on consumer health, our marketing organization operates efficiently by leveraging our precision marketing, e-commerce, and broader digital capabilities to develop unique consumer insights and further enhance the relevance of our brands. Similarly, our research and development organization combines these consumer insights with deep, multi-disciplinary scientific expertise, and active engagement with healthcare professionals, to drive innovative new products, solutions, and experiences centered around consumer health.
Our Business Segments
We operate our business through the following three reportable business segments:
•Self Care. Our Self Care product categories include: Cough, Cold, and Allergy; Pain Care; and Other Self Care (Digestive Health, Smoking Cessation, Eye Care, and Other). Major brands in the segment include Benadryl®, Calpol®, Motrin®, Nicorette®, Rhinocort®, Tylenol®, Zarbee’s®, and Zyrtec®.
•Skin Health and Beauty. Our Skin Health and Beauty product categories include: Face and Body Care; and Hair, Sun, and Other. Major brands in the segment include Aveeno®, Dr.Ci:Labo®, Le Petit Marseillais®, Lubriderm®, Neutrogena®, OGX®, and Rogaine®.
•Essential Health. Our Essential Health product categories include: Oral Care; Baby Care; and Other Essential Health (Women’s Health, Wound Care, and Other). Major brands in the segment include BAND-AID® Brand, Carefree®, Desitin®, Johnson’s®, Listerine®, o.b.® tampons, and Stayfree®.
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For additional information about our three reportable business segments, see Note 14, “Segments of Business,” to the Condensed Consolidated Financial Statements included herein.
Pending Transaction with K-C
On November 2, 2025, our Board unanimously approved the execution of an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which K-C will acquire all of the outstanding shares of the Company for a combination of stock and cash in a series of transactions (the “Pending Transaction”). Pursuant to the terms and subject to the conditions of the Merger Agreement, Company shareholders will receive 1) 0.14625 shares of K-C Common Stock and 2) $3.50 in cash for each share of the Company they own. Upon completion of the Pending Transaction, current Company shareholders are expected to own approximately 46% and current K-C shareholders are expected to own approximately 54% of the combined company on a fully diluted basis.
The Merger Agreement contains customary representations, warranties, covenants, and termination rights. The Pending Transaction is expected to close in the second half of 2026 and is conditioned on the satisfaction or waiver of other customary closing conditions, including the receipt of antitrust clearance in the United States and a number of foreign regulatory approvals. On January 29, 2026, our shareholders approved the adoption of the Merger Agreement and K-C’s shareholders approved the issuance of K-C Common Stock in connection with the Pending Transaction, in each case at a special meeting of shareholders held for that purpose. Additionally, the waiting period applicable to the Pending Transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired on February 4, 2026.
We are incurring costs in connection with the Pending Transaction, including advisory fees, legal costs, professional service costs, and other related costs (the “Pending Transaction and other related costs”).
Separation from J&J
Kenvue was initially formed as a wholly owned subsidiary of J&J. In May 2023, we completed an initial public offering of a portion of our common stock (the “Kenvue IPO”), and in August 2023, completed our transition to being a fully independent public company (the “Separation”). Following the completion of the Kenvue IPO, we entered into a separation agreement and various other agreements with J&J for the purpose of effecting the Separation. These agreements provide a framework for our relationship with J&J and govern various interim and ongoing relationships between us and J&J.
In connection with our establishment as a standalone public company, we are incurring certain non-recurring separation-related costs (the “Separation-related costs”). Separation-related costs associated with information technology and other activities, primarily related to the disentanglement of systems and the discontinuance of certain information technology assets, are substantially completed. Costs related to legal entity name change as well as minimal costs related to other activities are expected to continue for a longer period than originally anticipated.
For additional information about the Separation and our agreements with J&J, see Note 8, “Relationship with J&J,” to the Condensed Consolidated Financial Statements included herein.
Recent Developments
Conflict in the Middle East
Economic challenges, including the impact from acts of war, military actions, terrorist attacks, or civil unrest, such as the conflict in the Middle East, may continue to cause economic uncertainty and volatility. The conflict in the Middle East has resulted in volatility in the cost or availability of raw materials, commodities, logistics, transportation, and other inputs for our products due to the increased cost of oil. There is significant uncertainty regarding the duration and potential escalation of this conflict, as well as the risk of further economic disruptions that could impact global trade and supply chains. Given the dynamic nature of these conditions, we expect continued variability in the macroeconomic environment. The impact of these issues may adversely affect prevailing economic conditions and our business, results of operations, or financial condition.
Tariffs
In 2025, the U.S. government issued executive orders imposing tariffs on goods imported into the United States. These actions, as well as retaliatory tariffs imposed by other countries on U.S. exports, are expected to increase supply chain costs in certain geographies and create economic uncertainty for consumers. While the situation is fluid, based on our current analysis of the effects of the tariffs that have been implemented by the United States and retaliatory measures that are in effect as of the
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reporting date, we estimate gross tariff exposure of approximately $90 million annualized. In February 2026, the U.S. Supreme Court issued a ruling striking down tariffs previously imposed under the International Emergency Economics Powers Act (“IEEPA”). The ultimate availability, timing, and amount of potential refunds of such tariffs remain uncertain and could be subject to further legal, regulatory, and administrative developments or actions. We continue to monitor the potential impacts that the increased tariffs and other trade restrictions may have on our business, and we continue to focus on internal mitigating actions to partially offset the impact.
Key Factors Affecting Our Results
We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below, in Part I, Item 1A, “Risk Factors,” in our Annual Report, Part II, Item 1A, “Risk Factors,” included herein, and the section titled “Cautionary Note Regarding Forward-Looking Statements” included herein.
Restructuring
On February 17, 2026, our Board approved an initiative (the “2026 Restructuring Initiative”) that aims to optimize our operating model, transform our supply chain, reduce complexity, and drive operational efficiencies, while strengthening core capabilities. See Note 15, “Restructuring Expenses and Operating Model Optimization Initiatives,” to the Condensed Consolidated Financial Statements included herein for further information regarding ongoing and previously completed initiatives.
Results of Operations
Fiscal Three Months Ended March 29, 2026 Compared with Fiscal Three Months Ended March 30, 2025
Our results for the fiscal three months ended March 29, 2026 and March 30, 2025 were as follows:
| Fiscal Three Months Ended | Change in Fiscal Period | |||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | Change 2025 to 2026 | ||||||||||||||||||||||
| (Dollars in Millions) | Amount | Percent | ||||||||||||||||||||||
| Net sales | $ | 3,909 | $ | 3,741 | $ | 168 | 4.5 | % | ||||||||||||||||
| Cost of sales | 1,607 | 1,573 | 34 | 2.2 | ||||||||||||||||||||
| Gross profit | 2,302 | 2,168 | 134 | 6.2 | ||||||||||||||||||||
| Selling, general, and administrative expenses | 1,453 | 1,537 | (84) | (5.5) | ||||||||||||||||||||
| Restructuring expenses | 71 | 60 | 11 | 18.3 | ||||||||||||||||||||
| Other operating expense, net | 11 | 13 | (2) | (15.4) | ||||||||||||||||||||
| Operating income | 767 | 558 | 209 | 37.5 | ||||||||||||||||||||
| Other expense, net | — | 6 | (6) | * | ||||||||||||||||||||
| Interest expense, net | 95 | 94 | 1 | 1.1 | ||||||||||||||||||||
| Income before taxes | 672 | 458 | 214 | 46.7 | ||||||||||||||||||||
| Provision for taxes | 198 | 136 | 62 | 45.6 | ||||||||||||||||||||
| Net income | $ | 474 | $ | 322 | $ | 152 | 47.2 | % | ||||||||||||||||
* Calculation not meaningful.
Net Sales
Net sales were $3.9 billion and $3.7 billion for the fiscal three months ended March 29, 2026 and March 30, 2025, respectively, an increase of $168 million, or 4.5%. Excluding the impact of favorable changes in foreign currency exchange rates of 3.8%, Organic sales (a non-GAAP financial measure as defined in “Segment Results—Organic Sales Change” below) increased 0.7% driven by favorable value realization of 1.0%, partially offset by volume-related decreases of 0.3%. Favorable value realization was driven primarily by new pricing actions. Volume-related decreases were driven by the impact of lower incidences of illnesses primarily affecting pediatric Pain Care as well as Cough and Cold, partially offset by the impact of product innovation
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across all three segments. For additional information about the Net sales of our three reportable business segments, see “—Segment Results” below.
The following table presents a reconciliation of the change in U.S. GAAP Net sales to the change in Organic sales for the fiscal three months ended March 29, 2026 as compared to the fiscal three months ended March 30, 2025:
Fiscal Three Months Ended March 29, 2026 vs. March 30, 2025(1) | |||||||||||||||||||||||||||||||||||||||||||||||
| Reported Net Sales Change | Impact of Foreign Currency | Organic Sales Change | |||||||||||||||||||||||||||||||||||||||||||||
| Total Organic Sales Change | Price/Mix(2) | Volume | |||||||||||||||||||||||||||||||||||||||||||||
| Total | 4.5 | % | 3.8 | % | 0.7 | % | 1.0 | % | (0.3) | % | |||||||||||||||||||||||||||||||||||||
(1) Acquisitions and divestitures did not impact Net sales for the fiscal three months ended March 29, 2026 or March 30, 2025.
(2) Also referred to as value realization.
Cost of Sales
Cost of sales were $1.6 billion for both the fiscal three months ended March 29, 2026 and March 30, 2025. For the fiscal three months ended March 29, 2026, Cost of sales increased $34 million, or 2.2%. Gross profit margin expanded 90 basis points to 58.9% for the fiscal three months ended March 29, 2026 as compared to 58.0% for the fiscal three months ended March 30, 2025. Changes in both Cost of sales and gross profit margin were driven by benefits associated with our supply chain optimization initiatives, partially offset by net input cost inflation and the impact of tariffs imposed on goods imported into the United States. Cost of sales was also impacted by unfavorable changes in translational foreign currency exchange rates and volume-related Net sales decreases, and gross profit margin was also impacted by favorable value realization.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses were $1.5 billion for both the fiscal three months ended March 29, 2026 and March 30, 2025. For the fiscal three months ended March 29, 2026, Selling, general, and administrative expenses decreased $84 million, or 5.5%. Selling, general, and administrative expenses as a percentage of Net sales decreased 390 basis points to 37.2% for the fiscal three months ended March 29, 2026, as compared to 41.1% for the fiscal three months ended March 30, 2025. The decrease in Selling, general, and administrative expenses was primarily attributable to savings from our restructuring initiatives (as described in Note 15, “Restructuring Expenses and Operating Model Optimization Initiatives,” to the Condensed Consolidated Financial Statements included herein), a $30 million decrease in Separation-related costs, and lower expenses related to brand support attributable to media cost improvements, offset by unfavorable changes in translational foreign currency exchange rates and Pending Transaction and other related costs incurred in the fiscal three months ended March 29, 2026.
Restructuring Expenses
Restructuring expenses were $71 million and $60 million for the fiscal three months ended March 29, 2026 and March 30, 2025, respectively, an increase of $11 million. Restructuring expenses for the fiscal three months ended March 29, 2026 related to costs incurred under the 2026 Restructuring Initiative, and restructuring expenses for the fiscal three months ended March 30, 2025 related to costs incurred under Our Vue Forward. Costs incurred under each of the initiatives primarily included employee-related costs and information technology and project-related costs. See Note 15, “Restructuring Expenses and Operating Model Optimization Initiatives,” to the Condensed Consolidated Financial Statements included herein for additional information.
Other Operating Expense, Net
Other operating expense, net was $11 million and $13 million for the fiscal three months ended March 29, 2026 and March 30, 2025, respectively, a decrease of $2 million. Other operating expense, net for the fiscal three months ended March 29, 2026 and March 30, 2025 was driven by the $6 million and $12 million impact, respectively, of net economic benefit arrangements with J&J in connection with the Deferred Local Businesses (see Note 1, “Description of the Company and Summary of Significant Accounting Policies—Net Economic Benefit Arrangements,” to the Condensed Consolidated Financial Statements included herein for additional information), partially offset by $5 million and $4 million, respectively, of royalty income. See Note 9,
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“Other Operating Expense, Net and Other Expense, Net,” to the Condensed Consolidated Financial Statements included herein for additional information.
Other Expense, Net
Other expense, net was $0 million and $6 million for the fiscal three months ended March 29, 2026 and March 30, 2025, respectively, a decrease of $6 million. Other expense, net for the fiscal three months ended March 30, 2025 was driven by $6 million of currency losses on transactions. See Note 9, “Other Operating Expense, Net and Other Expense, Net,” to the Condensed Consolidated Financial Statements included herein for additional information.
Interest Expense, Net
Interest expense, net was $95 million and $94 million for the fiscal three months ended March 29, 2026 and March 30, 2025, respectively, an increase of $1 million. Interest expense, net in both fiscal periods primarily consisted of interest expense, including amortization of discounts and debt issuance costs, recognized on the Senior Notes (as defined in Note 4, “Borrowings,” to the Condensed Consolidated Financial Statements included herein) and notes issued under our commercial paper program. See Note 4, “Borrowings,” to the Condensed Consolidated Financial Statements included herein for additional information.
Provision for Taxes
Provision for taxes was $198 million and $136 million for the fiscal three months ended March 29, 2026 and March 30, 2025, respectively, an increase of $62 million. The increase in Provision for taxes was primarily the result of higher year-to-date pre-tax income, an increase in unfavorable return-to-provision adjustments, and a shortfall on stock-based compensation recorded during the fiscal three months ended March 29, 2026 as compared to a windfall on stock-based compensation recorded during the fiscal three months ended March 30, 2025. In addition, the worldwide effective income tax rates for the fiscal three months ended March 29, 2026 and March 30, 2025 were 29.5% and 29.7%, respectively. See Note 10, “Income Taxes,” to the Condensed Consolidated Financial Statements included herein for additional information.
Segment Results
Segment profit is based on Operating income, excluding depreciation, amortization of intangible assets, Separation-related costs, restructuring expenses and operating model optimization initiatives, the impact of the conversion of stock-based awards, issuance of Founder Shares (as defined below), Pending Transaction and other related costs, Skillman sale-leaseback, Other operating expense, net, and unallocated general corporate administrative expenses (referred to herein as “Segment adjusted operating income”), as the Chief Operating Decision Maker (the “CODM”) excludes these items in assessing segment financial performance. General corporate/unallocated expenses, which include expenses related to treasury, legal operations, and certain other expenses, along with gains and losses related to the overall management of our Company, are not allocated to the segments. In assessing segment performance and managing operations, the CODM does not review segment assets.
See Note 14, “Segments of Business,” to the Condensed Consolidated Financial Statements included herein for additional information.
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Fiscal Three Months Ended March 29, 2026 Compared with Fiscal Three Months Ended March 30, 2025
The following tables present Segment net sales and Segment adjusted operating income and the period-over-period changes in Segment net sales and Segment adjusted operating income for the fiscal three months ended March 29, 2026 and March 30, 2025. See Note 14, “Segments of Business,” to the Condensed Consolidated Financial Statements included herein for further details regarding Segment net sales and Segment adjusted operating income.
| Fiscal Three Months Ended | Change in Fiscal Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | Change 2025 to 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in Millions) | Self Care | Skin Health and Beauty | Essential Health | Total | Self Care | Skin Health and Beauty | Essential Health | Total | Amount | Percent | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 1,699 | $ | 1,059 | $ | 1,151 | $ | 3,909 | $ | 1,667 | $ | 977 | $ | 1,097 | $ | 3,741 | $ | 168 | 4.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment adjusted Cost of sales(1) | 578 | 437 | 518 | 1,533 | 587 | 413 | 496 | 1,496 | 37 | 2.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other segment expense items(2) | 496 | 454 | 334 | 1,284 | 514 | 472 | 362 | 1,348 | (64) | (4.7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment adjusted operating income | $ | 625 | $ | 168 | $ | 299 | $ | 1,092 | $ | 566 | $ | 92 | $ | 239 | $ | 897 | $ | 195 | 21.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation to Income before taxes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation(3) | 78 | 73 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of intangible assets(4) | 65 | 63 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Separation-related costs(5) | 3 | 38 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring expenses and operating model optimization initiatives(6) | 78 | 67 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of stock-based awards(7) | 1 | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Founder Shares(8) | 2 | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pending Transaction and other related costs(9) | 16 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Skillman sale-leaseback | 2 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other operating expense, net | 11 | 13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General corporate/unallocated expenses | 69 | 79 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 767 | $ | 558 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other expense, net | — | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 95 | 94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income before taxes | $ | 672 | $ | 458 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) We define Segment adjusted cost of sales as Cost of sales adjusted for amortization of intangible assets, operating model optimization initiatives, Separation-related costs, Pending Transaction and other related costs, Founder Shares (as defined below), and general corporate/unallocated expenses.
36
(2) Other segment expense items for each reportable business segment include brand support, employee-related costs, shipping and handling costs, research and development costs, and certain other operating expenses (income).
(3) Depreciation consists of depreciation of property, plant, and equipment and amortization of integration and development costs capitalized in connection with cloud computing arrangements.
(4) Relates to the amortization of definite-lived intangible assets (primarily trademarks, trade names, and customer lists) over their estimated useful lives.
(5) See Note 1, “Description of the Company and Summary of Significant Accounting Policies—Separation-Related Costs,” to the Condensed Consolidated Financial Statements included herein for additional information regarding Separation-related costs.
(6) Restructuring expenses and operating model optimization initiatives relate to the 2026 Restructuring Initiative for the fiscal three months ended March 29, 2026 and the 2024 Multi-Year Restructuring Initiative for the fiscal three months ended March 30, 2025. See Note 15, “Restructuring Expenses and Operating Model Optimization Initiatives,” to the Condensed Consolidated Financial Statements included herein for additional information.
(7) Segment adjusted operating income excludes the impact of the conversion of stock-based awards that occurred on August 23, 2023. The adjustment represents the net impact of the gain on reversal of previously recognized stock-based compensation expense, offset by stock-based compensation expense recognized in the fiscal three months ended March 29, 2026 and March 30, 2025 relating to employee services provided prior to the Separation.
(8) On August 25, 2023, our Compensation & Human Capital Committee approved equity grants to individuals employed by Kenvue as of October 2, 2023 (the “Founder Shares”). On October 2, 2023, the Founder Shares were granted to all Kenvue employees in the form of stock options and performance stock units to executive officers and either stock options and performance stock units or restricted stock units to non-executive individuals.
(9) Pending Transaction and other related costs consist of expenses incurred in connection with the Pending Transaction, including advisory fees, legal costs, professional service costs, and other related costs.
| Fiscal Three Months Ended | Change in Fiscal Period | |||||||||||||||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | Change 2025 to 2026 | ||||||||||||||||||||||||||||||||||
| (Dollars in Millions) | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||
| Segment Net Sales | ||||||||||||||||||||||||||||||||||||
| Self Care | $ | 1,699 | 43.5 | % | $ | 1,667 | 44.6 | % | $ | 32 | 1.9 | % | ||||||||||||||||||||||||
| Skin Health and Beauty | 1,059 | 27.1 | 977 | 26.1 | 82 | 8.4 | ||||||||||||||||||||||||||||||
| Essential Health | 1,151 | 29.4 | 1,097 | 29.3 | 54 | 4.9 | ||||||||||||||||||||||||||||||
| Segment net sales | $ | 3,909 | 100.0 | % | $ | 3,741 | 100.0 | % | $ | 168 | 4.5 | % | ||||||||||||||||||||||||
| Self Care | $ | 625 | $ | 566 | $ | 59 | 10.4 | % | ||||||||||||||||||||||||||||
| Skin Health and Beauty | 168 | 92 | 76 | 82.6 | ||||||||||||||||||||||||||||||||
| Essential Health | 299 | 239 | 60 | 25.1 | ||||||||||||||||||||||||||||||||
Segment adjusted operating income(1) | $ | |||||||||||||||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-06-10 | Howlett Heather | CFO & CAO | Sell | -3,700 | $18.11 | -$66,988 |
| 2026-05-08 | Orlando Matthew | General Counsel | Sell | -38,491 | $17.66 | -$679,691 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-08-06 10-Q expected by 2026-08-07 (in 52 days)
- ~2026-11-02 10-Q expected by 2026-11-03 (in 140 days)
- ~2027-02-15 10-K expected by 2027-02-18 (in 245 days)
- ~2027-05-06 10-Q expected by 2027-05-07 (in 325 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-05-07 8-K Earnings Release; Financial Statements and Exhibits
- 2026-05-07 10-Q Quarterly Report
- 2026-04-15 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-04-08 DEF 14A Proxy Statement
- 2026-02-20 10-K Annual Report
- 2026-02-17 8-K Earnings Release; Costs Associated with Exit; Financial Statements and Exhibits
- 2026-02-12 8-K Officer/Director Change
- 2026-01-16 8-K Other Events
- 2025-11-03 10-Q Quarterly Report
- 2025-11-03 8-K Material Agreement Entered; Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-11-03 8-K Earnings Release; Financial Statements and Exhibits
- 2025-08-07 10-Q Quarterly Report
- 2025-08-07 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-14 8-K Earnings Release; Officer/Director Change; Other Events; Financial Statements and Exhibits
- 2025-06-24 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits