Kenvue (KVUE) Q4 2024 earnings summary

Executive summary

• FY 2024 organic sales grew 1.5%, with Q4 organic sales up 1.7%, but results were below expectations due to weak cough, cold, and flu season and distributor issues in Asia-Pacific, especially China.

• Adjusted diluted EPS for 2024 was $1.14, within guidance; gross margin expanded by 200 basis points to 60.4% for the year.

• Significant cost reductions and productivity gains enabled a 20% increase in brand investment, with a focus on advertising, influencer campaigns, and healthcare professional engagement.

• New operating and performance model implemented, with global brand teams and enhanced talent.

• On track to deliver $350 million in annualized savings from the Vue Forward program by 2026.

Financial highlights

• FY 2024 net sales were $15.5 billion, up 0.1% year-over-year; Q4 net sales were $3.7 billion, flat year-over-year.

• Adjusted operating margin for 2024 was 21.5%; Q4 adjusted margin was 19.2%.

• FY 2024 adjusted net income was $2.2 billion; Q4 adjusted net income was $499 million.

• Free cash flow for 2024 was $1.3 billion, down from $2.7 billion in 2023 due to separation costs and operational factors.

• FY 2024 net debt was $8.3 billion; cash and equivalents $1.1 billion.

Outlook and guidance

• 2025 organic sales growth expected at 2%-4%, with growth accelerating in the second half; reported net sales growth of (1)% to 1% due to currency headwinds.

• Adjusted diluted EPS for 2025 expected to be flat to up 2%, with a mid-single-digit currency headwind.

• Adjusted operating margin expected to expand in 2025.

• Q1 2025 organic sales expected to decline low single digits due to destocking and trade investments; recovery anticipated in H2.

• Guidance excludes potential 2025 tariff impacts; mitigation plans in place.