Kenvue misses Q3 profit estimates, sales rise 3.2%

Kenvue (KVUE) reported adjusted diluted earnings of 29 cents per share for its fiscal third quarter, missing the 30 cents consensus estimate compiled by Finnhub.

Shares rose 1.5% in regular-session trading as of 9:37 a.m. ET, from a regular-session close of $19.56.

The company said on Oct. 30 that net sales rose 3.2% from a year earlier to $3.89 billion, below the $3.94 billion estimate compiled by Finnhub.

Kenvue sells consumer health brands including Aveeno, Band-Aid, Johnson's, Listerine, Neutrogena and Tylenol.

Here's how the company did:

• Adjusted diluted EPS: 29 cents per share vs. 28 cents a year earlier, below the 30 cents expected, according to Finnhub
• Diluted EPS: 22 cents per share vs. 21 cents a year earlier
• Net sales: $3.89 billion vs. $3.76 billion a year earlier
• Operating income margin: 18.2% vs. 16.7% a year earlier
• Adjusted operating income margin: 21.9% vs. 21.5% a year earlier

Organic sales rose 2.9%, driven by volume growth of 1.6% and favorable value realization of 1.3%. A foreign currency benefit added 0.3%.

Gross profit margin was 59.5%, against 59.1% a year earlier. The company credited productivity gains from its supply chain optimization initiatives, U.S. tariff refunds and favorable value realization.

Those gains were partly offset by inflation and unfavorable transactional foreign exchange.

CEO Kirk Perry said the quarter reflected momentum from disciplined execution. "We are pleased to have delivered our fourth consecutive quarter of net and organic sales growth, with strong performance in Self Care and Essential Health, along with margin expansion and strong cash generation."

Segment results

Self Care net sales rose 5.9% to $1.66 billion, with organic growth of 5.4%. Asia Pacific benefited from favorable inventory comparisons.

Smoking Cessation delivered low double-digit organic growth, led by Europe, Middle East, and Africa and Asia Pacific.

Skin Health and Beauty net sales rose 0.1% to $1.04 billion. Organic sales fell 0.5% on distribution losses and promotion timing in the U.S.

Hair Care grew low double digits organically, led by Rogaine.

Essential Health net sales rose 2.5% to $1.19 billion, with organic growth of 2.5%. Baby Care grew across all regions.

Guidance and the pending transaction

The company will not provide forward-looking guidance because of its pending transaction with Kimberly-Clark, it said in its release.

Kenvue will also not host a quarterly conference call because of the pending transaction.

Perry said the company is nearing completion of the combination. "As we near the completion of our value-creating combination with Kimberly-Clark and bring together our two companies, the team is excited about the opportunities ahead."

Revenue has risen in each of the last three quarters, from $3.76 billion in the third quarter of 2025 to $3.96 billion in the second quarter of 2026, according to its SEC filings.

Cash flow and restructuring

Net cash from operating activities was $1.9 billion for the first nine months of fiscal 2026, up from $1.3 billion a year earlier.

Free cash flow rose to $1.6 billion over the same period from $1.0 billion.

Total debt was $8.2 billion as of Sept. 27, down from $8.5 billion at Dec. 28, 2025. Cash and cash equivalents were $1.0 billion, compared with $1.1 billion at the end of 2025.

The board approved the 2026 Restructuring Initiative on Feb. 17. The company expects pre-tax restructuring expenses and other charges of about $250 million in fiscal 2026.

Restructuring expenses were $33 million in the quarter, down from $84 million a year earlier.