Kenvue Inc. (NYSE: KVUE) grows Q2 sales 3% and lifts EPS 9%
Rhea-AI Filing Summary
Kenvue Inc. reported fiscal second-quarter 2026 results with net sales of $3.96 billion, up 3.0% year over year, including 1.6% organic sales growth and a 1.4% foreign-currency benefit. Gross profit margin was 58.2% (adjusted 60.2%), and operating income margin was 17.7% (adjusted 22.1%), both slightly below the prior-year period.
Net income was $456 million versus $420 million a year ago. Diluted earnings per share increased 9% to $0.24, while adjusted diluted EPS rose to $0.31 from $0.29. For the first six months of 2026, net cash flows from operating activities were $1.2 billion and free cash flow reached $1.0 billion, with capital expenditures of $0.2 billion.
All three segments posted net sales growth, led by Skin Health and Beauty at 5.1%. Kenvue highlighted U.S. FDA approval of Tylenol with Naproxen, a new over-the-counter fixed-dose pain relief combination granted a three-year exclusivity period. The company is pursuing a pending cash-and-stock combination with Kimberly-Clark expected to close in the fourth quarter of 2026 and, due to this transaction, is not providing forward-looking guidance or hosting a quarterly earnings call.
Positive
- U.S. FDA approval of Tylenol® with Naproxen, the first OTC fixed-dose acetaminophen/naproxen combination with a three-year exclusivity period, expands Kenvue’s pain-management portfolio and product offering.
Negative
- None.
Filing Explained
The merger has shareholder approval and HSR clearance but remains unclosed, while Kenvue expects about $250 million in 2026 restructuring charges.
The quarterly results and press release are furnished under Item 2.02, so they are not treated as filed for Section 18 liability or automatically incorporated by reference, except through a specific reference in another filing.
The cash-and-stock transaction remains pending: shareholders of both companies approved the required proposals and the HSR waiting period expired, but closing remains subject to foreign regulatory approvals and other customary conditions; if completed, Kimberly-Clark will acquire all outstanding Kenvue common shares.
The 2026 Restructuring Initiative is expected to result in approximately
The combination's next disclosed milestones are receipt of foreign regulatory approvals and satisfaction of the remaining customary closing conditions.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q2 2026 Net Sales: $3,955 million
Q2 2026 Net Income: $456 million
Q2 2026 Diluted EPS: $0.24
+5 more
8 metrics
Q2 2026 Net Sales
$3,955 million
Fiscal three months ended June 28, 2026 net sales
Q2 2026 Net Income
$456 million
Net income for fiscal three months ended June 28, 2026
Q2 2026 Diluted EPS
$0.24
Diluted earnings per share vs $0.22 in prior-year quarter
Q2 2026 Adjusted Diluted EPS
$0.31
Non-GAAP adjusted diluted EPS vs $0.29 in prior-year quarter
Q2 2026 Gross Profit Margin
58.2%
Reported gross profit margin for fiscal three months ended June 28, 2026
2026 Year-to-Date Free Cash Flow
$1.0 billion
Free cash flow for fiscal six months ended June 28, 2026
Net Debt
$7.4 billion
Total debt minus cash and cash equivalents as of June 28, 2026
2026 Restructuring Initiative Expected Charges
approximately $250 million
Expected pre-tax restructuring expenses and other charges in fiscal year 2026
Key Terms
Organic sales, Adjusted gross profit margin, Free cash flow, 2026 Restructuring Initiative, +2 more
6 terms
Organic sales financial
"Net sales increased 3.0% vs the prior year period, reflecting Organic sales growth of 1.6%"
Organic sales are the change in a company’s revenue that comes from its existing business operations, excluding effects of acquisitions, divestitures, and currency swings. Think of it like measuring how much a garden grows from the plants you already tended, rather than adding new pots; investors use organic sales to judge whether demand and core business performance are genuinely improving or if growth is driven by one‑time deals or accounting shifts.
Adjusted gross profit margin financial
"Adjusted gross profit margin1 was 60.2% vs 60.9% in the prior year period"
Adjusted gross profit margin shows how much money a company keeps from sales after subtracting the direct costs of making its products or services, but it removes one-time or unusual charges to show the underlying performance. Think of it as the profit rate of a lemonade stand after paying for ingredients, but with a one-off broken juicer or a special sale taken out so you can see how the stand normally performs; investors use it to compare profitability without distortions.
Free cash flow financial
"Free cash flow1 increased to $1.0 billion vs $0.8 billion in the prior year period"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
2026 Restructuring Initiative financial
"the Company’s Board of Directors approved an initiative (the “2026 Restructuring Initiative”)"
Deferred Markets financial
"the impact of the deferred transfer of certain assets and liabilities from Johnson & Johnson in certain jurisdictions (the “Deferred Markets”)"
Skillman sale-leaseback financial
"costs associated with the Skillman sale-leaseback"
Earnings Snapshot
Net sales: $3,955 million · Guidance included
Fiscal quarter and six months ended June 28, 2026
Net sales
$3,955 million
3.0% increase vs fiscal Q2 2025
Organic sales growth
1.6%
Organic sales growth vs prior-year period
Diluted EPS
$0.24
Up from $0.22 in the prior-year quarter
Adjusted diluted EPS (non-GAAP)
$0.31
Up from $0.29 in the prior-year quarter
Guidance
Due to the pending transaction with Kimberly-Clark, the company is not providing forward-looking guidance.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Kenvue (KVUE) perform in net sales in Q2 2026?
Kenvue’s fiscal Q2 2026 net sales were $3,955 million, a 3.0% increase versus the prior-year quarter. Growth reflected 1.6% organic sales expansion and a 1.4% foreign-currency benefit across its Self Care, Skin Health and Beauty, and Essential Health segments.
How did Kenvue’s (KVUE) margins trend in Q2 2026?
Kenvue’s Q2 2026 gross profit margin was 58.2% versus 58.9% a year ago, with adjusted gross margin at 60.2% versus 60.9%. Operating income margin was 17.7% (adjusted 22.1%), slightly lower year over year, influenced by inflation, tariffs, and higher brand support.
What cash flow and debt levels did Kenvue (KVUE) report for 2026 year-to-date?
For the first six months of 2026, Kenvue generated $1.2 billion in net cash flows from operating activities and $1.0 billion in free cash flow. Total debt was $8.5 billion and cash and cash equivalents were $1.1 billion, resulting in net debt of $7.4 billion.
What is the status of Kenvue’s (KVUE) pending transaction with Kimberly-Clark?
Kenvue has a definitive merger agreement for Kimberly-Clark to acquire all outstanding Kenvue shares in a cash and stock transaction. Shareholders of both companies approved the deal and U.S. HSR waiting periods expired; closing is expected in Q4 2026, subject to remaining conditions.
Is Kenvue (KVUE) providing financial guidance following its Q2 2026 results?
Kenvue is not providing forward-looking guidance due to its pending transaction with Kimberly-Clark. For the same reason, the company is also not hosting a quarterly earnings conference call; instead, it is sharing details through its published financial results and disclosures.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 6, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
Registrant's telephone number, including area code: (908) -874-1200
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On August 6, 2026, Kenvue Inc. issued the attached press release (Exhibit 99.1) announcing its financial results for the fiscal second quarter ended June 28, 2026.
The information contained under Item 2.02 in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and, as a result, such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit Number | Exhibit Description | |||||||
| 99.1 | Press Release dated August 6, 2026 for the period ended June 28, 2026 | |||||||
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Kenvue Inc. | |||||
Date: August 6, 2026 | /s/ HEATHER HOWLETT | ||||
Heather Howlett | |||||
| Interim Chief Financial Officer and Chief Accounting Officer | |||||
Kenvue Reports Second Quarter 2026 Results
•Delivered Third Consecutive Quarter of Net and Organic Sales1 Growth
•Net Sales Increased 3.0%; Organic Sales Increased 1.6%
•Diluted EPS Increased 9% to $0.24; Adjusted Diluted EPS1 Increased 7% to $0.31
•Results Met or Exceeded the Company’s Plans Across Key Metrics
SUMMIT, N.J. August 6, 2026 – Kenvue Inc. (NYSE: KVUE) today announced financial results for the fiscal second quarter ended June 28, 2026.
“We delivered our third consecutive quarter of net and organic sales growth, with broad-based gains across every segment and region,” said Kirk Perry, Chief Executive Officer. “We also continued to drive operational efficiencies and increase strategic investment to fuel sustained momentum. Amidst a dynamic consumer and macro environment, our first-half 2026 results met or exceeded our expectations across key metrics, underscoring the strength and resilience of our people, brands, and new strategic plans.”
Perry continued, “Our transformation is firmly on track. We remain focused on disciplined execution and continued business improvement while we work toward completing our value-creating combination with Kimberly-Clark in the fourth quarter of this year.”
Second Quarter Summary
•Net sales increased 3.0% vs the prior year period, reflecting Organic sales growth of 1.6% and a foreign currency benefit of 1.4%.
•Gross profit margin was 58.2% vs 58.9% in the prior year period. Adjusted gross profit margin1 was 60.2% vs 60.9% in the prior year period.
•Operating income margin was 17.7% vs 18.0% in the prior year period. Adjusted operating income margin1 was 22.1% vs 22.7% in the prior year period.
•Diluted earnings per share were $0.24 vs $0.22 in the prior year period. Adjusted diluted earnings per share1 were $0.31 vs $0.29 in the prior year period.
•Due to the pending transaction with Kimberly-Clark, the Company will not be providing forward-looking guidance.
1
Second Quarter 2026 Financial Results
Net Sales and Organic Sales
Second quarter 2026 Net sales increased 3.0% vs the prior year period, primarily reflecting Organic sales growth of 1.6% and a foreign currency benefit of 1.4%. Organic sales growth was driven by favorable value realization of 0.9% and volume growth of 0.7%.
Gross Profit Margin and Operating Income Margin
Second quarter 2026 Gross profit margin was 58.2% vs 58.9% in the prior year period. Adjusted gross profit margin was 60.2% vs 60.9% in the prior year period. The year-over-year change in both measures primarily reflects the impact from inflation, tariffs, as well as unfavorable transactional foreign exchange, partially offset by savings from productivity gains attributable to our global supply chain optimization initiatives and favorable value realization.
Second quarter 2026 Operating income margin was 17.7% vs 18.0% in the prior year period. Second quarter 2026 Adjusted operating income margin was 22.1% vs 22.7% in the prior year period. The year-over-year change in both measures reflects the year-over-year change in Gross profit margin and Adjusted gross profit margin, as well as a year-over-year increase in brand support, partially offset by savings from our cost optimization actions, including the 2026 Restructuring Initiative and Our Vue Forward.
Interest Expense, Net and Taxes
Second quarter 2026 Interest expense, net was $90 million vs $94 million in the prior year period.
Second quarter Effective tax rate was 23.7% vs 28.6% in the prior year period. The Adjusted effective tax rate1 was 22.9% in the current period vs 26.9% in the prior year period. The year-over-year reduction in both measures largely reflects the release of a valuation allowance, favorable jurisdictional mix of earnings in the current period, as well as the impact of tax law changes.
Net Income Per Share (“Earnings Per Share”)
Second quarter 2026 Diluted earnings per share were $0.24 vs $0.22 in the prior year period. Adjusted diluted earnings per share were $0.31 in the current period vs $0.29 in the prior year period.
2
Second Quarter 2026 Business Segment Results
Self Care
Second quarter 2026 Net sales increased 2.2% vs the prior year period, reflecting Organic sales growth of 0.6% and a foreign currency benefit of 1.6%. Organic sales growth was driven by favorable value realization of 1.2%, which was partially offset by a volume decrease of 0.6%. Organic sales grew vs the prior year period in the North America, Europe, Middle East and Africa (“EMEA”), and Asia Pacific regions. Return to Organic sales growth in the U.S., the Company’s largest market, was a key driver of this performance. It was enabled by strong eCommerce momentum, successful activation in Allergy behind Zyrtec®, which continued to gain share and strengthen its leadership position, strong commercial and innovation-driven execution in Digestive Health, which enabled Pepcid® to continue to outperform the market, as well as sequentially better performance in the Pain and Cough and Cold businesses, despite historically low out of season incidences. In the U.S., consumption trends for Tylenol® continued to improve sequentially, as the brand gained slight market share vs the prior year period. Organic sales growth in EMEA and Asia Pacific regions reflected continued gains in Smoking Cessation behind strong commercial execution on Nicorette®, which outperformed the category across major markets, as well as gains in Cough, Cold, & Flu, as the Company introduced Codral® Kids in Australia, the brand’s first range of products designed for children.
Skin Health and Beauty
Second quarter 2026 Net sales increased 5.1% vs the prior year period, reflecting Organic sales growth of 3.7% and a foreign currency benefit of 1.4%. Organic sales growth was driven by favorable value realization of 2.7% and a volume increase of 1.0%, as Organic sales grew vs the prior year period across every region, largely driven by Hair Care and Face Care. Strong eCommerce momentum, focused commercial execution and recent innovations, such as the OGX® Pro Growth + Peptide and Neutrogena® Ultra Sheer Sun, contributed to this strong performance globally. In the U.S., the Company’s brand building actions behind Neutrogena®, the largest brand in the segment, helped improve household penetration for the third consecutive quarter, with gains across all generational cohorts.
Essential Health
Second quarter 2026 Net sales increased 2.3% vs the prior year period, reflecting Organic sales growth of 1.1% and a foreign currency benefit of 1.2%. Organic sales growth was driven by a volume increase of 1.9%, partially offset by unfavorable value realization of 0.8%. Organic sales grew vs the prior year period in the Asia Pacific, Latin America, and North America regions, with Wound Care and Baby Care need states fueling growth and more than offsetting a decline in Oral Care. Strong
3
momentum in the eCommerce channel, distribution gains in the U.S., as well as targeted activation behind innovations, such as Band-Aid PRO HEAL® 5 Day Protect in North America, the global restage of Listerine® and rollout of Listerine® On-The-Go Alcohol Free Mouthwash Sachets, as well as an upgrade from mid to mid-premium Stayfree® offerings in India, strengthened global consumption growth on a sequential basis. In Latin America, we continued to gain market share across major brands.
Cash Flow and Balance Sheet
Fiscal six months ended June 28, 2026 Net cash flows from operating activities were $1.2 billion vs $1.0 billion in the prior year period, with the improvement driven by an increase in net income, partially offset by higher use of working capital. Capital expenditures were $0.2 billion vs $0.3 billion in the prior year period, as Free cash flow1 increased to $1.0 billion vs $0.8 billion in the prior year period. Total cash and cash equivalents were $1.1 billion as of June 28, 2026 and December 28, 2025. Total debt was $8.5 billion as of June 28, 2026 and December 28, 2025.
FDA Approves Tylenol® with Naproxen
Kenvue received U.S. Food and Drug Administration approval for Tylenol® with Naproxen, the first and only over-the-counter (“OTC”) fixed-dose combination of acetaminophen and naproxen sodium. Building on more than 70 years of Tylenol® leadership in pain relief innovation, the product expands OTC pain management options for consumers and healthcare providers by combining the fast-acting relief of 650 mg of acetaminophen with the long-lasting analgesic power of 220 mg naproxen sodium (a non-steroidal anti-inflammatory drug) in one dose, which begins working in under 30 minutes and provides relief for 12 hours.
Supported by eight clinical studies and granted a three-year exclusivity period, Tylenol® with Naproxen is expected to be available soon at major U.S. retailers nationwide.
Pending Transaction with Kimberly-Clark
As previously announced, the Company entered into a definitive merger agreement on November 2, 2025, under which Kimberly-Clark will acquire all of the outstanding shares of Kenvue common stock in a cash and stock transaction. Shareholders of each company voted overwhelmingly to approve all of the proposals necessary for Kimberly-Clark to complete its acquisition of the Company at their respective Special Meetings of Stockholders held on January 29, 2026. Additionally, the waiting period applicable to the transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired on February 4, 2026. The transaction is expected to close in the fourth quarter of 2026, subject to receipt of foreign regulatory approvals and satisfaction of other customary closing conditions as described in the merger agreement.
4
2026 Restructuring Initiative
As previously disclosed, on February 17, 2026, the Company’s Board of Directors approved an initiative (the “2026 Restructuring Initiative”) that aims to optimize its operating model, transform its supply chain, reduce complexity, and drive operational efficiencies, while strengthening core capabilities. The Initiative is expected to result in pre-tax restructuring expenses and other charges totaling approximately $250 million in fiscal year 2026.
No Conference Call
Due to the pending transaction with Kimberly-Clark, Kenvue will not be hosting a quarterly conference call. This press release will be posted on the Company’s website at investors.kenvue.com.
About Kenvue
Kenvue Inc. is the world’s largest pure-play consumer health company by revenue. Built on more than a century of heritage, our iconic brands, including Aveeno®, BAND-AID® Brand, Johnson’s®, Listerine®, Neutrogena®, and Tylenol®, are science-backed and recommended by healthcare professionals around the world. At Kenvue, we realize the extraordinary power of everyday care. Our teams work every day to put that power in consumers’ hands and earn a place in their hearts and homes. Learn more at kenvue.com.
1Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures to supplement the financial measures prepared in accordance with U.S. GAAP. There are limitations to the use of the non-GAAP financial measures presented herein. These non-GAAP financial measures are not prepared in accordance with U.S. GAAP, nor do they have any standardized meaning under U.S. GAAP. In addition, other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way the Company calculates such measures. Accordingly, the non-GAAP financial measures may not be comparable to such similarly titled non-GAAP financial measures used by other companies. The Company cautions you not to place undue reliance on these non-GAAP financial measures, but instead to consider them with the most directly comparable U.S. GAAP measure. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation. These non-GAAP financial measures should be considered supplements to, not substitutes for, or superior to, the corresponding financial measures calculated in accordance with U.S. GAAP.
5
The Company believes the presentation of these measures is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by management. The Company believes these measures help improve investors’ ability to understand the Company’s operating performance and makes it easier to compare the Company’s results with other companies. In addition, the Company believes these measures are also among the primary measures used externally by the Company’s investors, analysts, and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in our industry.
Below are definitions and the reconciliation to the most closely related GAAP measures for the non-GAAP measures used in this press release.
Adjusted diluted earnings per share: We define Adjusted diluted earnings per share as Adjusted net income divided by the weighted average number of diluted shares outstanding. Management views this non-GAAP measure as useful to investors as it provides a supplemental measure of the Company’s performance over time.
Adjusted EBITDA margin: We define EBITDA as U.S. GAAP Net income adjusted for interest, provision for taxes, and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for restructuring expenses and operating model optimization initiatives, costs incurred in connection with our establishment as a standalone public company (“Separation-related costs”), conversion of stock-based awards, stock-based awards granted to individuals employed by Kenvue as of October 2, 2023 (“Founder Shares”), expenses incurred in connection with the pending transaction with Kimberly-Clark (“Pending Transaction and other related costs”), costs associated with the Skillman sale-leaseback, and the impact of the deferred transfer of certain assets and liabilities from Johnson & Johnson in certain jurisdictions (the “Deferred Markets”). We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of U.S. GAAP Net sales. Management believes this non-GAAP measure is useful to investors as it provides a supplemental perspective to the Company’s operating efficiency over time.
Adjusted effective tax rate: We define Adjusted effective tax rate as U.S. GAAP Effective tax rate adjusted for the tax effects on special item adjustments including amortization of intangible assets, restructuring expenses and operating model optimization initiatives, Separation-related costs, conversion of stock-based awards, Founder Shares, Pending Transaction and other related costs, and costs associated with the Skillman sale-leaseback. We also exclude taxes related to the Deferred Markets. Management believes this non-GAAP measure is useful to investors as it provides a supplemental measure of the Company’s performance over time.
6
Adjusted gross profit margin: We define Adjusted gross profit margin as U.S. GAAP Gross profit margin adjusted for amortization of intangible assets, Separation-related costs, conversion of stock-based awards, Founder Shares, operating model optimization initiatives, and Pending Transaction and other related costs. Management believes this non-GAAP measure is useful to investors as it provides a supplemental perspective to the Company’s operating efficiency over time.
Adjusted net income: We define Adjusted net income as U.S. GAAP Net income adjusted for amortization of intangible assets, restructuring expenses and operating model optimization initiatives, Separation-related costs, conversion of stock-based awards, Founder Shares, Pending Transaction and other related costs, costs associated with the Skillman sale-leaseback, the impact of the Deferred Markets, and their related tax impacts (i.e., special items). Adjusted net income excludes the impact of items that may obscure trends in our underlying performance. Management believes this non-GAAP measure is useful to investors as the Company uses Adjusted net income for strategic decision making, forecasting future results, and evaluating current performance.
Adjusted operating income: We define Adjusted operating income as U.S. GAAP Operating income adjusted for amortization of intangible assets, restructuring expenses and operating model optimization initiatives, Separation-related costs, conversion of stock-based awards, Founder Shares, Pending Transaction and other related costs, costs associated with the Skillman sale-leaseback, and the impact of the Deferred Markets. Management believes this non-GAAP measure is useful to investors as management uses Adjusted operating income to assess the Company’s financial performance.
Adjusted operating income margin: We define Adjusted operating income margin as Adjusted operating income as a percentage of U.S. GAAP Net sales. Management believes this non-GAAP measure is useful to investors as it provides a supplemental perspective to the Company’s operating efficiency over time.
Free cash flow: We define Free cash flow as U.S. GAAP Net cash flows from operating activities adjusted for purchases of property, plant, and equipment. Management believes this non-GAAP measure is useful to investors as it provides a view of the Company’s liquidity after deducting capital expenditures, which are considered a necessary component of our ongoing operations.
Organic sales: We define Organic sales as U.S. GAAP Net sales excluding the impact of changes in foreign currency exchange rates and the impact of acquisitions and divestitures. We report changes in Organic sales on a period-over-period basis. Management believes reporting period-over-period
7
changes in Organic sales provides investors with supplemental information that is useful in assessing the Company’s results of operations by excluding the impact of certain items that we believe do not directly reflect our underlying operations.
Market Share Information
The Company uses market share and related metrics, including Average Weekly Recommendations, as indicators to assess business performance and trends. Market share references in this press release are derived from a combination of consumption and market share data provided by third-party vendors and internal estimates. Unless otherwise indicated, such references represent the percentage of the dollar value of sales of our products, relative to all product sales in the category in the countries in which the Company operates and purchases data.
Market share data is subject to inherent limitations, including the availability and timing of underlying information. In particular, market share data is not generally available for certain retail channels. The Company measures market share through the most recent period for which market share data is available, which generally reflects a lag time of one or two months. While the Company believes the third-party vendors it uses to provide data are reliable, it has not independently verified the accuracy or completeness of such data or its underlying assumptions. In addition, the Company’s reported market share data may differ from that reported by other companies due to differences in category definitions, geographic scope, internal estimates and other factors.
Cautions Concerning Forward-Looking Statements
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements about management’s expectations of Kenvue’s future operating and financial performance, product development, market position, and business strategy. Such forward-looking statements include statements regarding the pending transaction with Kimberly-Clark. Forward-looking statements may be identified by the use of words such as “plans,” “expects,” “will,” “anticipates,” “estimates,” and other words of similar meaning. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Kenvue and its affiliates. Risks and uncertainties include, but are not limited to: the inability to execute on Kenvue’s business development strategy; inflation and other economic factors, such as interest rate and currency exchange rate fluctuations, as well as existing or proposed tariffs and other constraints on trade both in the U.S. and in foreign markets; the ability to successfully manage local, regional, or global economic volatility, including reduced market growth rates, and to generate sufficient income and cash flow to allow Kenvue to
8
effect any dividend payments; Kenvue’s ability to maintain satisfactory credit ratings and access capital markets, which could adversely affect its liquidity, capital position, and borrowing costs; competition, including technological advances, new products, and intellectual property attained by competitors; challenges inherent in new product research and development; uncertainty of commercial success for new and existing products and digital capabilities; challenges to intellectual property protections, including counterfeiting; the ability of Kenvue to successfully execute strategic plans, including the 2026 Restructuring Initiative and any other restructuring or cost-saving initiatives; the impact of business combinations and divestitures, including any ongoing or future transactions; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws and regulations and other stakeholder requirements; changes in behavior and spending patterns of consumers; natural disasters, acts of war, or terrorism, catastrophes, or epidemics, pandemics, or other disease outbreaks; financial instability of international economies and legal systems and sovereign risk; the inability to realize the benefits of the separation from Kenvue’s former parent, Johnson & Johnson; the risk of disruption or unanticipated costs in connection with the separation; the Company’s inability to consummate the pending transaction with Kimberly-Clark due to, among other things, market, regulatory, and other factors; the potential for disruption to the Company’s business resulting from the pending transaction with Kimberly-Clark; and potential adverse effects on the Company’s stock price from the announcement, suspension, or consummation of the pending transaction with Kimberly-Clark. A further list and descriptions of these risks, uncertainties, and other factors can be found in Kenvue’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other filings, available at investors.kenvue.com or on request from Kenvue. Any forward-looking statement made in this release speaks only as of the date of this release. Kenvue undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or developments or otherwise.
Contacts
Investor Relations:
Sofya Tsinis
Kenvue_IR@kenvue.com
Media Relations:
Melissa Witt
media@kenvue.com
9
Kenvue Inc.
Condensed Consolidated Statements of Operations
(Unaudited; Dollars in Millions, Except Per Share Data; Shares in Millions)
Fiscal Three Months Ended | Fiscal Six Months Ended | |||||||||||||||||||||||||
June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | |||||||||||||||||||||||
Net sales | $ | 3,955 | $ | 3,839 | $ | 7,864 | $ | 7,580 | ||||||||||||||||||
Cost of sales | 1,654 | 1,578 | 3,261 | 3,151 | ||||||||||||||||||||||
Gross profit | 2,301 | 2,261 | 4,603 | 4,429 | ||||||||||||||||||||||
Selling, general, and administrative expenses | 1,537 | 1,504 | 2,990 | 3,041 | ||||||||||||||||||||||
Restructuring expenses | 59 | 60 | 130 | 120 | ||||||||||||||||||||||
Other operating expense, net | 6 | 5 | 17 | 18 | ||||||||||||||||||||||
Operating income | 699 | 692 | 1,466 | 1,250 | ||||||||||||||||||||||
Other expense, net | 11 | 10 | 11 | 16 | ||||||||||||||||||||||
Interest expense, net | 90 | 94 | 185 | 188 | ||||||||||||||||||||||
Income before taxes | 598 | 588 | 1,270 | 1,046 | ||||||||||||||||||||||
Provision for taxes | 142 | 168 | 340 | 304 | ||||||||||||||||||||||
Net income | $ | 456 | $ | 420 | $ | 930 | $ | 742 | ||||||||||||||||||
Net income per share | ||||||||||||||||||||||||||
Basic | $ | 0.24 | $ | 0.22 | $ | 0.48 | $ | 0.39 | ||||||||||||||||||
Diluted | $ | 0.24 | $ | 0.22 | $ | 0.48 | $ | 0.39 | ||||||||||||||||||
Weighted-average number of shares outstanding | ||||||||||||||||||||||||||
Basic | 1,920 | 1,919 | 1,918 | 1,917 | ||||||||||||||||||||||
Diluted | 1,923 | 1,928 | 1,922 | 1,927 | ||||||||||||||||||||||
10
Organic Sales Change
The following tables present a reconciliation of the change in Net sales, as reported, to the change in Organic sales, a non-GAAP measure, for the periods presented:
Fiscal Three Months Ended June 28, 2026 vs. June 29, 2025(1) | |||||||||||||||||||||||||||||
Reported Net Sales Change | Impact of Foreign Currency | Organic Sales Change | |||||||||||||||||||||||||||
(Unaudited) | Total Organic Sales Change | Price/Mix(2) | Volume | ||||||||||||||||||||||||||
Self Care | 2.2 | % | 1.6 | % | 0.6 | % | 1.2 | % | (0.6) | % | |||||||||||||||||||
Skin Health and Beauty | 5.1 | 1.4 | 3.7 | 2.7 | 1.0 | ||||||||||||||||||||||||
Essential Health | 2.3 | 1.2 | 1.1 | (0.8) | 1.9 | ||||||||||||||||||||||||
Total | 3.0 | % | 1.4 | % | 1.6 | % | 0.9 | % | 0.7 | % | |||||||||||||||||||
Fiscal Six Months Ended June 28, 2026 vs. June 29, 2025(1) | |||||||||||||||||||||||||||||
Reported Net Sales Change | Impact of Foreign Currency | Organic Sales Change | |||||||||||||||||||||||||||
(Unaudited) | Total Organic Sales Change | Price/Mix(2) | Volume | ||||||||||||||||||||||||||
Self Care | 2.0 | % | 2.9 | % | (0.9) | % | 1.4 | % | (2.3) | % | |||||||||||||||||||
Skin Health and Beauty | 6.7 | 2.3 | 4.4 | 1.8 | 2.6 | ||||||||||||||||||||||||
Essential Health | 3.5 | 2.2 | 1.3 | (0.4) | 1.7 | ||||||||||||||||||||||||
Total | 3.7 | % | 2.5 | % | 1.2 | % | 1.0 | % | 0.2 | % | |||||||||||||||||||
(1) Acquisitions and divestitures did not impact the reported Net sales change.
(2) Price/Mix reflects value realization.
Total Segment Net Sales and Adjusted Operating Income
Segment Net sales for the periods presented were as follows:
Net Sales | ||||||||||||||||||||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | |||||||||||||||||||||||||
(Unaudited; Dollars in Millions) | June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||||
Self Care | $ | 1,589 | $ | 1,555 | $ | 3,288 | $ | 3,222 | ||||||||||||||||||
Skin Health and Beauty | 1,113 | 1,059 | 2,172 | 2,036 | ||||||||||||||||||||||
Essential Health | 1,253 | 1,225 | 2,404 | 2,322 | ||||||||||||||||||||||
Total segment net sales | $ | 3,955 | $ | 3,839 | $ | 7,864 | $ | 7,580 | ||||||||||||||||||
11
Segment Adjusted operating income for the periods presented was as follows:
Adjusted Operating Income | ||||||||||||||||||||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | |||||||||||||||||||||||||
(Unaudited; Dollars in Millions) | June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||||
Self Care Adjusted operating income | $ | 512 | $ | 527 | $ | 1,137 | $ | 1,093 | ||||||||||||||||||
Skin Health and Beauty Adjusted operating income | 186 | 149 | 354 | 241 | ||||||||||||||||||||||
Essential Health Adjusted operating income | 315 | 351 | 614 | 590 | ||||||||||||||||||||||
Total | $ | 1,013 | $ | 1,027 | $ | 2,105 | $ | 1,924 | ||||||||||||||||||
Reconciliation to Adjusted operating income (non-GAAP): | ||||||||||||||||||||||||||
Depreciation(1) | 79 | 78 | 157 | 151 | ||||||||||||||||||||||
General corporate/unallocated expenses | 70 | 90 | 139 | 169 | ||||||||||||||||||||||
Other operating expense, net | 6 | 5 | 17 | 18 | ||||||||||||||||||||||
Other—impact of Deferred Markets | (15) | (16) | (21) | (25) | ||||||||||||||||||||||
Adjusted operating income (non-GAAP) | $ | 873 | $ | 870 | $ | 1,813 | $ | 1,611 | ||||||||||||||||||
Reconciliation to Income before taxes: | ||||||||||||||||||||||||||
Amortization of intangible assets(2) | 64 | 64 | 129 | 127 | ||||||||||||||||||||||
Separation-related costs(4) | 7 | 24 | 10 | 62 | ||||||||||||||||||||||
Restructuring expenses and operating model optimization initiatives(3) | 69 | 68 | 147 | 135 | ||||||||||||||||||||||
Conversion of stock-based awards | — | 1 | 1 | 4 | ||||||||||||||||||||||
Other—impact of Deferred Markets | 15 | 16 | 21 | 25 | ||||||||||||||||||||||
Founder Shares | 1 | 5 | 3 | 8 | ||||||||||||||||||||||
Pending Transaction and other related costs(5) | 16 | — | 32 | — | ||||||||||||||||||||||
Skillman sale-leaseback | 2 | — | 4 | — | ||||||||||||||||||||||
Operating income | $ | 699 | $ | 692 | $ | 1,466 | $ | 1,250 | ||||||||||||||||||
Other expense, net | 11 | 10 | 11 | 16 | ||||||||||||||||||||||
Interest expense, net | 90 | 94 | 185 | 188 | ||||||||||||||||||||||
Income before taxes | $ | 598 | $ | 588 | $ | 1,270 | $ | 1,046 | ||||||||||||||||||
12
Non-GAAP Financial Information
The following tables present reconciliations of GAAP to non-GAAP for the periods presented:
Fiscal Three Months Ended June 28, 2026 | ||||||||||||||||||||||||||||||||||||||
(Unaudited; Dollars in Millions) | As Reported | Adjustments | Reference | As Adjusted | ||||||||||||||||||||||||||||||||||
Net sales | $ | 3,955 | — | $ | 3,955 | |||||||||||||||||||||||||||||||||
Gross profit | $ | 2,301 | 80 | (a) | $ | 2,381 | ||||||||||||||||||||||||||||||||
Gross profit margin | 58.2 | % | 60.2 | % | ||||||||||||||||||||||||||||||||||
Operating income | $ | 699 | 174 | (a)-(c) | $ | 873 | ||||||||||||||||||||||||||||||||
Operating income margin | 17.7 | % | 22.1 | % | ||||||||||||||||||||||||||||||||||
Net income | $ | 456 | 139 | (a)-(d) | $ | 595 | ||||||||||||||||||||||||||||||||
Net income margin | 11.5 | % | 15.0 | % | ||||||||||||||||||||||||||||||||||
Interest expense, net | $ | 90 | ||||||||||||||||||||||||||||||||||||
Provision for taxes | $ | 142 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | 143 | ||||||||||||||||||||||||||||||||||||
EBITDA (non-GAAP) | $ | 831 | 110 | (b)-(c), (e) | $ | 941 | ||||||||||||||||||||||||||||||||
EBITDA margin (non-GAAP) | 21.0 | % | 23.8 | % | ||||||||||||||||||||||||||||||||||
Detail of Adjustments | ||||||||||||||||||||||||||||||||
Cost of Sales | SG&A/Restructuring Expenses | Other Operating Expense, Net | Provision for Taxes | Total | ||||||||||||||||||||||||||||
Amortization of intangible assets(2) | $ | 64 | $ | — | $ | — | $ | — | $ | 64 | ||||||||||||||||||||||
Restructuring expenses(3) | — | 59 | — | — | 59 | |||||||||||||||||||||||||||
Operating model optimization initiatives(3) | 9 | 1 | — | — | 10 | |||||||||||||||||||||||||||
Separation-related costs, conversion of stock-based awards, and Founder Shares(4) | 6 | 2 | — | — | 8 | |||||||||||||||||||||||||||
Pending Transaction and other related costs(5) | 1 | 15 | — | — | 16 | |||||||||||||||||||||||||||
Skillman sale-leaseback | — | 2 | — | — | 2 | |||||||||||||||||||||||||||
Impact of Deferred Markets—minority interest expense | — | — | 6 | — | 6 | |||||||||||||||||||||||||||
Impact of Deferred Markets—provision for taxes | — | — | 9 | (9) | — | |||||||||||||||||||||||||||
Tax impact on special item adjustments | — | — | — | (26) | (26) | |||||||||||||||||||||||||||
Total | $ | 80 | $ | 79 | $ | 15 | $ | (35) | $ | 139 | ||||||||||||||||||||||
(a) | (b) | (c) | (d) | |||||||||||||||||||||||||||||
Cost of sales less amortization | $ | 16 | ||||||||||||||||||||||||||||||
(e) | ||||||||||||||||||||||||||||||||
13
Fiscal Three Months Ended June 29, 2025 | ||||||||||||||||||||||||||||||||||||||
(Unaudited; Dollars in Millions) | As Reported | Adjustments | Reference | As Adjusted | ||||||||||||||||||||||||||||||||||
Net sales | $ | 3,839 | — | $ | 3,839 | |||||||||||||||||||||||||||||||||
Gross profit | $ | 2,261 | 77 | (a) | $ | 2,338 | ||||||||||||||||||||||||||||||||
Gross profit margin | 58.9 | % | 60.9 | % | ||||||||||||||||||||||||||||||||||
Operating income | $ | 692 | 178 | (a)-(c) | $ | 870 | ||||||||||||||||||||||||||||||||
Operating income margin | 18.0 | % | 22.7 | % | ||||||||||||||||||||||||||||||||||
Net income | $ | 420 | 140 | (a)-(d) | $ | 560 | ||||||||||||||||||||||||||||||||
Net income margin | 10.9 | % | 14.6 | % | ||||||||||||||||||||||||||||||||||
Interest expense, net | $ | 94 | ||||||||||||||||||||||||||||||||||||
Provision for taxes | $ | 168 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | 142 | ||||||||||||||||||||||||||||||||||||
EBITDA (non-GAAP) | $ | 824 | 114 | (b)-(c), (e) | $ | 938 | ||||||||||||||||||||||||||||||||
EBITDA margin (non-GAAP) | 21.5 | % | 24.4 | % | ||||||||||||||||||||||||||||||||||
Detail of Adjustments | ||||||||||||||||||||||||||||||||
Cost of Sales | SG&A/Restructuring Expenses | Other Operating Expense, Net | Provision for Taxes | Total | ||||||||||||||||||||||||||||
Amortization of intangible assets(2) | $ | 64 | $ | — | $ | — | $ | — | $ | 64 | ||||||||||||||||||||||
Restructuring expenses(3) | — | 60 | — | — | 60 | |||||||||||||||||||||||||||
Operating model optimization initiatives(3) | 6 | 2 | — | — | 8 | |||||||||||||||||||||||||||
Separation-related costs, conversion of stock-based awards, and Founder Shares(4) | 7 | 23 | — | — | 30 | |||||||||||||||||||||||||||
Impact of Deferred Markets—minority interest expense | — | — | 6 | — | 6 | |||||||||||||||||||||||||||
Impact of Deferred Markets—provision for taxes | — | — | 10 | (10) | — | |||||||||||||||||||||||||||
Tax impact on special item adjustments | — | — | — | (28) | (28) | |||||||||||||||||||||||||||
Total | $ | 77 | $ | 85 | $ | 16 | $ | (38) | $ | 140 | ||||||||||||||||||||||
(a) | (b) | (c) | (d) | |||||||||||||||||||||||||||||
Cost of sales less amortization | $ | 13 | ||||||||||||||||||||||||||||||
(e) | ||||||||||||||||||||||||||||||||
14
Fiscal Six Months Ended June 28, 2026 | ||||||||||||||||||||||||||||||||||||||
(Unaudited; Dollars in Millions) | As Reported | Adjustments | Reference | As Adjusted | ||||||||||||||||||||||||||||||||||
Net sales | $ | 7,864 | — | $ | 7,864 | |||||||||||||||||||||||||||||||||
Gross profit | $ | 4,603 | 154 | (a) | $ | 4,757 | ||||||||||||||||||||||||||||||||
Gross profit margin | 58.5 | % | 60.5 | % | ||||||||||||||||||||||||||||||||||
Operating income | $ | 1,466 | 347 | (a)-(c) | $ | 1,813 | ||||||||||||||||||||||||||||||||
Operating income margin | 18.6 | % | 23.1 | % | ||||||||||||||||||||||||||||||||||
Net income | $ | 930 | 280 | (a)-(d) | $ | 1,210 | ||||||||||||||||||||||||||||||||
Net income margin | 11.8 | % | 15.4 | % | ||||||||||||||||||||||||||||||||||
Interest expense, net | $ | 185 | ||||||||||||||||||||||||||||||||||||
Provision for taxes | $ | 340 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | 286 | ||||||||||||||||||||||||||||||||||||
EBITDA (non-GAAP) | $ | 1,741 | 218 | (b)-(c), (e) | $ | 1,959 | ||||||||||||||||||||||||||||||||
EBITDA margin (non-GAAP) | 22.1 | % | 24.9 | % | ||||||||||||||||||||||||||||||||||
Detail of Adjustments | ||||||||||||||||||||||||||||||||
Cost of Sales | SG&A/Restructuring Expenses | Other Operating Expense, Net | Provision for Taxes | Total | ||||||||||||||||||||||||||||
Amortization of intangible assets(2) | $ | 129 | $ | — | $ | — | $ | — | $ | 129 | ||||||||||||||||||||||
Restructuring expenses(3) | — | 130 | — | — | 130 | |||||||||||||||||||||||||||
Operating model optimization initiatives(3) | 14 | 3 | — | — | 17 | |||||||||||||||||||||||||||
Separation-related costs, conversion of stock-based awards, and Founder Shares(4) | 8 | 6 | — | — | 14 | |||||||||||||||||||||||||||
Pending Transaction and other related costs(5) | 3 | 29 | — | — | 32 | |||||||||||||||||||||||||||
Skillman sale-leaseback | — | 4 | — | — | 4 | |||||||||||||||||||||||||||
Impact of Deferred Markets—minority interest expense | — | — | 9 | — | 9 | |||||||||||||||||||||||||||
Impact of Deferred Markets—provision for taxes | — | — | 12 | (12) | — | |||||||||||||||||||||||||||
Tax impact on special item adjustments | — | — | — | (55) | (55) | |||||||||||||||||||||||||||
Total | $ | 154 | $ | 172 | $ | 21 | $ | (67) | $ | 280 | ||||||||||||||||||||||
(a) | (b) | (c) | (d) | |||||||||||||||||||||||||||||
Cost of sales less amortization | $ | 25 | ||||||||||||||||||||||||||||||
(e) | ||||||||||||||||||||||||||||||||
15
Fiscal Six Months Ended June 29, 2025 | ||||||||||||||||||||||||||||||||||||||
(Unaudited; Dollars in Millions) | As Reported | Adjustments | Reference | As Adjusted | ||||||||||||||||||||||||||||||||||
Net sales | $ | 7,580 | — | $ | 7,580 | |||||||||||||||||||||||||||||||||
Gross profit | $ | 4,429 | 154 | (a) | $ | 4,583 | ||||||||||||||||||||||||||||||||
Gross profit margin | 58.4 | % | 60.5 | % | ||||||||||||||||||||||||||||||||||
Operating income | $ | 1,250 | 361 | (a)-(c) | $ | 1,611 | ||||||||||||||||||||||||||||||||
Operating income margin | 16.5 | % | 21.3 | % | ||||||||||||||||||||||||||||||||||
Net income | $ | 742 | 283 | (a)-(d) | $ | 1,025 | ||||||||||||||||||||||||||||||||
Net income margin | 9.8 | % | 13.5 | % | ||||||||||||||||||||||||||||||||||
Interest expense, net | $ | 188 | ||||||||||||||||||||||||||||||||||||
Provision for taxes | $ | 304 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | 278 | ||||||||||||||||||||||||||||||||||||
EBITDA (non-GAAP) | $ | 1,512 | 234 | (b)-(c), (e) | $ | 1,746 | ||||||||||||||||||||||||||||||||
EBITDA margin (non-GAAP) | 19.9 | % | 23.0 | % | ||||||||||||||||||||||||||||||||||
Detail of Adjustments | ||||||||||||||||||||||||||||||||
Cost of Sales | SG&A/Restructuring Expenses | Other Operating Expense, Net | Provision for Taxes | Total | ||||||||||||||||||||||||||||
Amortization of intangible assets(2) | $ | 127 | $ | — | $ | — | $ | — | $ | 127 | ||||||||||||||||||||||
Restructuring expenses(3) | — | 120 | — | — | 120 | |||||||||||||||||||||||||||
Operating model optimization initiatives(3) | 12 | 3 | — | — | 15 | |||||||||||||||||||||||||||
Separation-related costs, conversion of stock-based awards, and Founder Shares(4) | 15 | 59 | — | — | 74 | |||||||||||||||||||||||||||
Impact of Deferred Markets—minority interest expense | — | — | 10 | — | 10 | |||||||||||||||||||||||||||
Impact of Deferred Markets—provision for taxes | — | — | 15 | (15) | — | |||||||||||||||||||||||||||
Tax impact on special item adjustments | — | — | — | (63) | (63) | |||||||||||||||||||||||||||
Total | $ | 154 | $ | 182 | $ | 25 | $ | (78) | $ | 283 | ||||||||||||||||||||||
(a) | (b) | (c) | (d) | |||||||||||||||||||||||||||||
Cost of sales less amortization | $ | 27 | ||||||||||||||||||||||||||||||
(e) | ||||||||||||||||||||||||||||||||
(1) Depreciation consists of depreciation of property, plant, and equipment and amortization of integration and development costs capitalized in connection with cloud computing arrangements.
(2) Relates to the amortization of definite-lived intangible assets (primarily trademarks, trade names, and customer lists) over their estimated useful lives.
16
(3) Restructuring expenses and operating model optimization initiatives in the fiscal three and six months ended June 28, 2026 related to the 2026 Restructuring Initiative and in the fiscal three and six months ended June 29, 2025 related to the 2024 Multi-year Restructuring Initiative and were composed of the following:
Fiscal Three Months Ended | Fiscal Six Months Ended | |||||||||||||||||||||||||
(Unaudited; Dollars in Millions) | June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||||
Employee-related costs (one-time severance and other termination benefits) | $ | 29 | $ | 21 | $ | 77 | $ | 46 | ||||||||||||||||||
Information technology and project-related costs | 40 | 47 | 70 | 87 | ||||||||||||||||||||||
Other implementation costs | — | — | — | 2 | ||||||||||||||||||||||
Total restructuring expenses and operating model optimization initiatives | $ | 69 | $ | 68 | $ | 147 | $ | 135 | ||||||||||||||||||
Restructuring expenses and operating model optimization initiatives include accelerated depreciation expense on assets related to the 2026 Restructuring Initiative for the fiscal three and six months ended June 28, 2026.
(4) Separation-related costs relate to non-recurring costs incurred in connection with our establishment of Kenvue as a standalone public company. Separation-related costs, the impact of the conversion of stock-based compensation awards, and the incremental stock-based compensation from the issuance of the Founder Shares, were composed of the following:
Fiscal Three Months Ended | Fiscal Six Months Ended | |||||||||||||||||||||||||
(Unaudited; Dollars in Millions) | June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||||
Information technology and other | $ | 2 | $ | 18 | $ | 2 | $ | 51 | ||||||||||||||||||
Legal entity name change | 5 | 6 | 8 | 11 | ||||||||||||||||||||||
Total separation-related costs | $ | 7 | $ | 24 | $ | 10 | $ | 62 | ||||||||||||||||||
Conversion of stock-based awards | — | 1 | 1 | 4 | ||||||||||||||||||||||
Founder Shares | 1 | 5 | 3 | 8 | ||||||||||||||||||||||
Total separation-related costs, conversion of stock-based awards, and Founder Shares | $ | 8 | $ | 30 | $ | 14 | $ | 74 | ||||||||||||||||||
(5) Pending Transaction and other related costs consist of expenses incurred in connection with the pending transaction with Kimberly-Clark, including advisory fees, legal costs, professional service costs, and other related costs.
The following table presents reconciliations of the Effective tax rate, as reported, to Adjusted effective tax rate for the periods presented:
Fiscal Three Months Ended | Fiscal Six Months Ended | |||||||||||||||||||||||||
(Unaudited) | June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||||
Effective tax rate | 23.7 | % | 28.6 | % | 26.8 | % | 29.1 | % | ||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Tax-effect on special item adjustments | (0.9) | (1.9) | (1.7) | (2.2) | ||||||||||||||||||||||
Taxes related to Deferred Markets | 0.1 | 0.2 | 0.1 | 0.2 | ||||||||||||||||||||||
Adjusted Effective tax rate (non-GAAP) | 22.9 | % | 26.9 | % | 25.2 | % | 27.1 | % | ||||||||||||||||||
The following table presents a reconciliation of Diluted earnings per share, as reported, to Adjusted diluted earnings per share for the periods presented:
Fiscal Three Months Ended | Fiscal Six Months Ended | |||||||||||||||||||||||||
(Unaudited) | June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||||
Diluted earnings per share | $ | 0.24 | $ | 0.22 | $ | 0.48 | $ | 0.39 | ||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Separation-related costs | — | 0.01 | 0.01 | 0.03 | ||||||||||||||||||||||
Restructuring expenses and operating model optimization initiatives | 0.04 | 0.04 | 0.08 | 0.07 | ||||||||||||||||||||||
Amortization of intangible assets | 0.03 | 0.03 | 0.07 | 0.07 | ||||||||||||||||||||||
Pending Transaction and other related costs | 0.01 | — | 0.02 | — | ||||||||||||||||||||||
Tax impact on special item adjustments | (0.01) | (0.01) | (0.03) | (0.03) | ||||||||||||||||||||||
Adjusted diluted earnings per share (non-GAAP) | $ | 0.31 | $ | 0.29 | $ | 0.63 | $ | 0.53 | ||||||||||||||||||
17
The following table presents a reconciliation of Net cash flows from operating activities, as reported, and Purchases of property, plant, and equipment, as reported, to Free cash flow for the periods presented:
Fiscal Six Months Ended | ||||||||||||||
(Unaudited; Dollars in Billions) | June 28, 2026 | June 29, 2025 | ||||||||||||
Net cash flows from operating activities | $ | 1.2 | $ | 1.0 | ||||||||||
Purchases of property, plant, and equipment | (0.2) | (0.3) | ||||||||||||
Free cash flow (non-GAAP) | $ | 1.0 | $ | 0.8 | ||||||||||
Note: Numbers may not foot due to rounding.
Other Supplemental Financial Information
The following table presents the Company’s Net sales by geographic region for the periods presented:
Fiscal Three Months Ended | Fiscal Six Months Ended | |||||||||||||||||||||||||
(Unaudited; Dollars in Millions) | June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||||
Net sales by geographic region | ||||||||||||||||||||||||||
North America | $ | 1,905 | $ | 1,878 | $ | 3,765 | $ | 3,735 | ||||||||||||||||||
Europe, Middle East, and Africa | 956 | 929 | 1,948 | 1,813 | ||||||||||||||||||||||
Asia Pacific | 723 | 706 | 1,423 | 1,400 | ||||||||||||||||||||||
Latin America | 371 | 326 | 728 | 632 | ||||||||||||||||||||||
Total Net sales by geographic region | $ | 3,955 | $ | 3,839 | $ | 7,864 | $ | 7,580 | ||||||||||||||||||
The following table presents the Company’s Research and development expenses for the periods presented. Research and development expenses are included within Selling, general, and administrative expenses.
Fiscal Three Months Ended | Fiscal Six Months Ended | |||||||||||||||||||||||||
(Unaudited; Dollars in Millions) | June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||||
Research & Development | $ | 94 | $ | 91 | $ | 178 | $ | 190 | ||||||||||||||||||
The following table presents the Company’s Cash and cash equivalents, Total debt, and Net debt balance as of the periods presented:
(Unaudited; Dollars in Billions) | June 28, 2026 | December 28, 2025 | ||||||||||||
Cash and cash equivalents | $ | 1.1 | $ | 1.1 | ||||||||||
Total debt | (8.5) | (8.5) | ||||||||||||
Net debt | $ | (7.4) | $ | (7.5) | ||||||||||
Note: Numbers may not foot due to rounding.
18