Consumer Health Company Kenvue Projects Subpar Earnings, Faces Activist Pressure
Kenvue, a consumer health company spun off from Johnson & Johnson, has released a forecast for 2025 adjusted profit below Wall Street expectations. The projection is attributed to a stronger dollar and declining demand for its cough and cold products like Tylenol and Benadryl.
Kenvue has been under scrutiny from activist investor Starboard Value, which has demanded performance improvements, particularly in the skin and beauty products segment. Starboard has nominated four directors to Kenvue's board, including its chief investment officer.
In response to the decreased sales in its key products, Kenvue has increased marketing and advertising, including targeting Gen Z consumers through social media campaigns.
CFO Paul Ruh anticipates performance enhancements throughout the year while monitoring external factors. The company predicts flat to 2% growth in 2025 adjusted profit per share compared to $1.14 in 2024. Analysts anticipate a 5.6% increase to $1.21 per share this year.
Kenvue expects organic sales to increase by 2-4% in 2025. For the fourth quarter ending December 29th, the company reported adjusted earnings per share of 26 cents, meeting expectations. Sales reached $3.66 billion, slightly below estimates of $3.77 billion, impacted by reduced cold, cough, and flu cases.
The self-care segment, including cough and cold products, saw a 2.1% increase in sales to $1.57 billion, still lower than analyst projections of $1.62 billion. Brands like Neutrogena and Aveeno in the skin health and beauty products segment generated $1.01 billion in sales, in line with estimates.