Kenvue 10-Q 2025-03-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

or

Commission File Number: 001-41697

Kenvue Inc.

(Exact name of registrant as specified in its charter)

(908) 874-1200

(Registrant’s telephone number, including area code)

199 Grandview Road, Skillman, New Jersey 08558

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

On May 2, 2025, 1,919,909,938 shares of Common Stock, $0.01 par value, were outstanding.

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and Kenvue Inc.’s other publicly available documents contain forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements do not relate strictly to historical or current facts and reflect management’s assumptions, views, plans, objectives, and projections about the future. Forward-looking statements may be identified by the use of words such as “plans,” “expects,” “will,” “anticipates,” “estimates,” and other words of similar meaning in conjunction with, among other things: discussions of future operations; expected operating results and financial performance; impact of planned acquisitions and dispositions; our strategy for growth and cost savings; product development activities; regulatory approvals; market position; expenditures; and the effects of the Separation (as defined in Note 1, “Description of the Company and Summary of Significant Accounting Policies**—**Description of the Company and Business Segments,” to the Condensed Consolidated Financial Statements included herein) on our business.

As used in this Quarterly Report on Form 10-Q, “Kenvue,” the “Company,” “we,” “us,” “our,” and similar terms include Kenvue Inc. and its subsidiaries, unless the context indicates otherwise.

Because forward-looking statements are based on current beliefs, expectations, and assumptions regarding future events, they are subject to risks, uncertainties, and changes that are difficult to predict and many of which are outside of our control. You should realize that if underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, our actual results and financial condition could vary materially from expectations and projections expressed or implied in our forward-looking statements. Risks and uncertainties include but are not limited to:

• Our ability to expand globally, implement our digital strategy, and respond appropriately to competitive pressure, including from private-label brands and generic non-branded products, market trends, increased costs, and customer and consumer preferences;

• The rapidly changing retail landscape, including our dependence on key retailers, policies of our customers, the emergence of e-commerce and other alternative retail channels, and challenges with innovation and research and development;

• Product reliability, safety, and/or efficacy concerns, whether or not based on scientific or factual evidence, potentially resulting in governmental investigations, regulatory action (including, but not limited to, the shutdown of manufacturing facilities, product relabeling or withdrawal of product from the market), private claims and lawsuits, significant remediation and related costs, safety alerts, product shortages, product recalls, declining sales, reputational damage, and share price impact;

• The potential that the expected benefits and opportunities from the 2024 Multi-Year Restructuring Initiative (as defined in Note 15, “Restructuring Expenses and Operating Model Optimization Initiatives,” to the Condensed Consolidated Financial Statements included herein) or any other planned or completed restructuring, cost-saving, or other strategic initiative, acquisition, or divestiture may not be realized or may take longer to realize than expected;

• Our ability to establish, maintain, protect, and enforce intellectual property rights, as well as address the threats of counterfeit and other unauthorized versions of our products;

• Allegations that our products infringe the intellectual property rights of third parties;

• The impact of negative publicity and failed marketing efforts;

• Difficulties and delays in manufacturing, internally or within the supply chain, which may lead to business interruptions, product shortages, withdrawals or suspensions of products from the market, and potential regulatory action;

• Our reliance on third-party relationships, global supply chains, and production and distribution processes, which may adversely affect supply, sourcing, and pricing of materials used in our products, and impact our ability to forecast product demand;

• Interruptions, breakdowns, invasions, corruptions, destruction, and breaches of our information technology or operational technology systems or those of a third party;

• The development, deployment, use, and regulation of artificial intelligence in our internal processes, manufacturing operations, products and services, as well as our business more broadly;

• The potential for labor disputes, strikes, work stoppages, and similar labor relations matters, and the impact of minimum wage increases;

• Our ability to attract and retain talented, highly skilled employees and to implement succession plans for our senior management;

• Climate change, extreme weather, and natural disasters, or legal, regulatory or market measures to address climate change;

• The impact of increasing scrutiny, emerging legal and regulatory requirements, and rapidly evolving expectations from stakeholders regarding environmental, social, and governance matters;

• The potential for insurance to be unavailable or insufficient to cover losses we may incur;

• Legal proceedings related to talc or talc-containing products, such as Johnson’s® Baby Powder, sold outside the United States and Canada, and other risks and uncertainties related to talc or talc-containing products, including the ability of our former parent Johnson & Johnson (“J&J”) to fully satisfy its obligation to indemnify us in the United States and Canada for the Talc-Related Liabilities (as defined in Note 13, “Commitments and Contingencies,” to the Condensed Consolidated Financial Statements included herein);

• The impact of legal proceedings and the uncertainty of their outcome, whether or not we believe they have merit;

• Changes to applicable laws, regulations, policies, and related interpretations;

• Potential changes in export/import and trade laws, regulations, and policies, such as new or increased tariffs, sanctions, quotas, or trade barriers;

• Changes in tax laws and regulations, increased audit scrutiny by tax authorities and exposures to additional tax liabilities potentially in excess of existing reserves;

• The impact of inflation and fluctuations in interest rates and currency exchange rates;

• The impact of a natural disaster, catastrophe, epidemic, pandemic, and global tension, including armed conflict, or other event;

• The impact of impairment of our goodwill and other intangible assets;

• Our ability to maintain satisfactory credit ratings and access credit markets;

• Our ability to achieve the expected benefits of the Separation from J&J and related transactions;

• Restrictions on our business, potential tax and indemnification liabilities and substantial charges in connection with the Separation and related transactions;

• Failure of our rebranding efforts in connection with the Separation to achieve market acceptance, and the impact of our continued use of legacy J&J branding, including the “Johnson’s®” brand; and

• Our substantial indebtedness, including the restrictions and covenants in our debt agreements.

Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found under the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the fiscal twelve months ended December 29, 2024 filed on February 24, 2025 with the U.S. Securities and Exchange Commission (the “SEC”) and in our other filings with the SEC. You should understand that it is not possible to predict or identify all such factors, and you should not consider the risks described above to be a complete statement of all potential risks and uncertainties. We do not undertake to publicly update any forward-looking statement that may be made from time to time, whether as a result of new information or future events or developments, except as required by law.

PART I—FINANCIAL INFORMATION

KENVUE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; Dollars in Millions, Except Per Share Data; Shares in Thousands)

See accompanying Notes to Condensed Consolidated Financial Statements.

KENVUE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; Dollars in Millions, Except Per Share Data; Shares in Millions)

See accompanying Notes to Condensed Consolidated Financial Statements.

KENVUE INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited; Dollars in Millions)

Showing the first 8K of 127K characters. Open the full section

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 the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal twelve months ended December 29, 2024 filed on February 24, 2025 with the SEC (the “Annual Report”) 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 as of March 30, 2025 and for the fiscal three months ended March 30, 2025 and March 31, 2024, 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 29, 2024, 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 $15.5 billion in Net sales in the fiscal year 2024. 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 Tylenol®, Neutrogena®, Listerine®, Johnson’s®, BAND-AID® Brand, Aveeno®, Zyrtec®, and Nicorette®—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 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: Pain Care; Cough, Cold, and Allergy; and Other Self Care (Digestive Health, Smoking Cessation, Eye Care, and Other). Major brands in the segment include Tylenol®, Motrin®, Nicorette®, Benadryl®, Zyrtec®, Zarbee’s®, ORSLTM, Rhinocort®, and Calpol®.

• 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 Neutrogena®, Aveeno®, Dr.Ci:Labo®, OGX®, Le Petit Marseillais®, Lubriderm®, 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 Listerine®, Johnson’s®, BAND-AID® Brand, Stayfree®, o.b.® tampons, Carefree®, and Desitin®.

For additional information about our three reportable business segments, see Note 14, “Segments of Business,” to the Condensed Consolidated Financial Statements included herein.

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 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 from J&J and transition to being a fully independent public company.

We are incurring certain non-recurring separation-related costs in connection with our establishment as a standalone public company (the “Separation-related costs”). We expect the Separation-related costs will continue through approximately the first half of fiscal year 2025. For additional information about the Separation, see Note 1, “Description of the Company and Summary of Significant Accounting Policies,” and Note 8, “Relationship with J&J,” to the Condensed Consolidated Financial Statements included herein.

Relationship with J&J

We entered into 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 8, “Relationship with J&J,” to the Condensed Consolidated Financial Statements included herein for additional information on these agreements.

Kenvue Global and North America Headquarters

On April 20, 2023, we entered into a long-term lease for a newly renovated global and North America corporate headquarters building and a newly constructed research and development building in Summit, New Jersey (the “Global and North America Headquarters Lease”). In March 2025, we began operating out of the new global and North America corporate headquarters. The relocation to our new campus from multiple U.S.-based locations will continue through 2026 when the new research and development building is expected to be complete. When construction is completed, the campus will encompass approximately 290,000 square feet. The Global and North America Headquarters Lease collectively includes the lease associated with the global and North America corporate headquarters building, the lease associated with the land where the research and development building is under construction, and the lease associated with land to be used for amenities.

On February 21, 2024, we listed our former corporate headquarters in Skillman, New Jersey for sale, which met the criteria to be classified as held for sale at that date. The Skillman, New Jersey facility continues to meet the criteria for held for sale classification as of March 30, 2025. For the fiscal three months ended March 31, 2024, an impairment charge of $68 million was recorded on the held for sale asset associated with the former corporate headquarters in Skillman. See Note 1, “Description of the Company and Summary of Significant Accounting Policies—Assets Held for Sale,” to the Condensed Consolidated Financial Statements included herein for more information.

Recent Developments

Macroeconomic developments, including changes in global trade policies, may adversely affect prevailing economic conditions and our business, results of operations, or financial condition. In the first half of 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 preliminary 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 reporting date, we estimate incremental gross tariff exposure of approximately $150 million in fiscal year 2025. 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 and in the section titled “Risk Factors” in our Annual Report.

Restructuring

As part of our continued transformation to a fit-for-purpose consumer company, during the fiscal year 2024, we began strategic initiatives intended to enhance organizational efficiencies and better position us for future growth (“Our Vue Forward”). To further Our Vue Forward, on May 6, 2024, our Board of Directors (our “Board”) approved a multi-year initiative (the “2024 Multi-Year Restructuring Initiative”) to build on our strengths, improve our underlying information technology infrastructure, and optimize our cost structure by rebalancing resources to better position us for future growth. The 2024 Multi-Year Restructuring Initiative primarily includes global workforce reductions, changes in management structure, and the transition to centralized shared-service functions in lower-cost locations. See Note 15, “Restructuring Expenses and Operating Model Optimization Initiatives,” to the Condensed Consolidated Financial Statements included herein for further information.

Acquisitions and Divestitures

We did not complete any significant acquisitions or divestitures during the fiscal three months ended March 30, 2025 and March 31, 2024.

Legal Proceedings

See Note 13, “Commitments and Contingencies,” to the Condensed Consolidated Financial Statements included herein for additional information regarding our current legal proceedings.

Results of Operations

Fiscal Three Months Ended March 30, 2025 Compared with Fiscal Three Months Ended March 31, 2024

Our results for the fiscal three months ended March 30, 2025 and March 31, 2024 were as follows:

• Calculation not meaningful.

Net Sales

Net sales were $3.7 billion and $3.9 billion for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, a decrease of $153 million, or 3.9%. Excluding the impact of unfavorable changes in foreign currency exchange rates of 2.7%, Organic sales (a non-GAAP financial measure as defined in “Segment Results—Organic Sales Change” below) decline was 1.2%. Organic sales decline was driven by volume-related decreases of 0.9% and unfavorable value realization (defined as price, including mix) of 0.3%. Organic sales decline was driven by decreases in Skin Health and Beauty primarily in the United States attributable to current fiscal year competitive pressures and strategic price investments, as well as decreases in Self Care attributable to declines in Cough and Cold products and pediatric Pain Care outside of the United States due to a weak season, resulting in destocking in China. The decline was partially offset by increases in Self Care in North America driven by Allergy Care and Pain Care. 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 30, 2025 as compared to the fiscal three months ended March 31, 2024:

(1) Also referred to as value realization.

Cost of Sales

Cost of sales were $1.6 billion and $1.7 billion for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, a decrease of $79 million, or 4.8%. Gross profit margin expanded 40 basis points to 58.0% for the fiscal three months ended March 30, 2025 as compared to 57.6% for the fiscal three months ended March 31, 2024. Changes in both Cost of sales and gross profit margin were primarily due to gains attributable to the realization of benefits associated with our supply chain optimization initiatives, partially offset by volume deleverage at internal manufacturing sites. Changes in both Cost of sales and gross profit margin were also impacted by a refinement to the methodology of our stock-based compensation expense allocations. Gross profit margin also decreased due to unfavorable value realization.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses were $1.5 billion and $1.6 billion for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, a decrease of $36 million, or 2.3%. Selling, general, and administrative expenses as a percentage of Net sales increased 70 basis points to 41.1% for the fiscal three months ended March 30, 2025, as compared to 40.4% for the fiscal three months ended March 31, 2024. The decrease in Selling, general, and administrative expenses was primarily attributable to savings from Our Vue Forward and a $26 million decrease in Separation-related costs, partially offset by higher expenses related to brand support, including advertising, primarily in Skin Health and Beauty and Essential Health. The decrease in Selling, general, and administrative expenses was also partially offset by a refinement to the methodology of our stock-based compensation expense allocations.

Restructuring Expenses

Restructuring expenses were $60 million and $41 million for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, an increase of $19 million. Restructuring expenses relate to costs incurred under Our Vue Forward and the increase was driven by higher 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.

Impairment Charges

Impairment charges were $0 million and $68 million for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, a decrease of $68 million. Impairment charges for the fiscal three months ended March 31, 2024 was driven by the

impact of a $68 million non-cash impairment charge related to our former corporate headquarters in Skillman, New Jersey, which was classified as held for sale on February 21, 2024. See Note 1, “Description of the Company and Summary of Significant Accounting Policies—Assets Held for Sale,” to the Condensed Consolidated Financial Statements included herein for additional information.

Other Operating Expense, Net

Other operating expense, net was $13 million and $10 million for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, an increase of $3 million. Other operating expense, net for the fiscal three months ended March 30, 2025 and March 31, 2024 was driven by the $12 million and $15 million accounting 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,” to the Condensed Consolidated Financial Statements included herein for additional information), partially offset by $4 million and $9 million, respectively, of royalty income. See Note 9, “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 $6 million and $28 million for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, a decrease of $22 million. Other expense, net for the fiscal three months ended March 30, 2025 was driven by $6 million of currency losses on transactions. Other expense, net for the fiscal three months ended March 31, 2024 was driven by $31 million in losses on investments. 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 $94 million and $95 million for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, a decrease of $1 million. Interest expense, net in both fiscal periods primarily includes 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 the 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 $136 million and $131 million for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, an increase of $5 million. The increase in Provision for taxes was primarily due to higher year-to-date pre-tax income, as well as reduced tax benefits derived from fewer releases of tax reserves as compared to the fiscal three months ended March 31, 2024. The increase was partially offset by less unfavorable true-ups in our deferred tax positions as compared to the fiscal three months ended March 31, 2024 as well as a windfall on stock-based compensation recorded during the fiscal three months ended March 30, 2025 as compared to a shortfall on stock-based compensation recorded during the fiscal three months ended March 31, 2024. In addition, the worldwide effective income tax rates for the fiscal three months ended March 30, 2025 and March 31, 2024 were 29.7% and 30.7%, 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, impairment charges, the impact of the conversion of stock-based awards, issuance of Founder Shares (as defined below), 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.

Fiscal Three Months Ended March 30, 2025 Compared with Fiscal Three Months Ended March 31, 2024

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 30, 2025 and March 31, 2024. 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.

(1) We define Segment adjusted cost of sales as Cost of sales adjusted for amortization of intangible assets, Separation-related costs, conversion of stock-based awards, Founder Shares (as defined below), operating model optimization initiatives, and general corporate/unallocated expenses.

(2) Other segment expense items for each reportable segment include brand support, employee-related costs, shipping and handling costs, research and development costs, and certain other operating expenses (income).

(3) Effective in the fiscal three months ended June 30, 2024, we adjusted the allocation for certain Research and development costs within Selling, general, and administrative expenses to align with segment financial results as measured by the Company, including the CODM. Accordingly, we have updated the segment disclosures to reflect the updated presentation in all prior periods. Total Adjusted operating income did not change as a result of this update.

(4) Depreciation consists of depreciation of property, plant, and equipment and the amortization of integration and development costs capitalized in connection with cloud computing arrangements.

(5) Relates to the amortization of definite-lived intangible assets (primarily trademarks, trade names, and customers lists) over their estimated useful lives.

(6) 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.

(7) Restructuring expenses and operating model optimization initiatives relate to the 2024 Multi-Year Restructuring Initiative. See Note 15, “Restructuring Expenses and Operating Model Optimization Initiatives” to the Condensed Consolidated Financial Statements included herein for additional information.

(8) Impairment charges for the fiscal three months ended March 31, 2024 relate to the impact of a $68 million non-cash impairment charge recorded on the held for sale asset associated with the Company’s former corporate headquarters in Skillman, New Jersey. See Note 1, “Description of the Company and Summary of Significant Accounting Policies—Assets Held for Sale,” to the Condensed Consolidated Financial Statements included herein for additional information.

(9) 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 30, 2025 and March 31, 2024 relating to employee services provided prior to the Separation.

(10) 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 PSUs to executive officers and either stock options and PSUs or RSUs to non-executive individuals.

(1) Refer to the table above for the reconciliation of Segment adjusted operating income to Operating income and Income before taxes in the Condensed Consolidated Financial Statements.

Organic Sales Change

We define Organic sales, a non-GAAP financial measure, as Net sales excluding the impact of changes in foreign currency exchange rates and the impact of acquisitions and divestitures. We assess our Net sales performance by measuring the period-over-period change in Organic sales. Management believes reporting period-over-period changes in Organic sales provides investors with additional, supplemental information that is useful in assessing our results of operations by excluding the impact of certain items that we believe do not directly reflect our underlying operations.

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 30, 2025 as compared to the fiscal three months ended March 31, 2024:

(1) Also referred to as value realization.

Self Care Segment

Self Care Segment Net Sales

The Self Care Segment Net sales were $1.7 billion for both the fiscal three months ended March 30, 2025 and March 31, 2024. For the fiscal three months ended March 30, 2025, Net sales decreased $31 million, or 1.8%, as compared to the fiscal three months ended March 31, 2024. Excluding the impact of unfavorable changes in foreign currency exchange rates of 2.1%, Organic sales growth was 0.3%. Volume was flat; volume-related increases were primarily driven by Allergy Care in North America attributable to trade inventory builds in preparation for the allergy season due to planned activation strategies and Pain Care attributable to effective promotional strategies and product innovation in North America, offset by decreases in Cough and Cold products and pediatric Pain Care outside of the United States due to a weak season, resulting in destocking in China, as well as declines in antifungal products in APAC. Favorable value realization increased Organic sales by 0.3%.

Self Care Segment Adjusted Operating Income

The Self Care Segment adjusted operating income decreased by $35 million, or 5.8%, to $566 million for the fiscal three months ended March 30, 2025 as compared to the fiscal three months ended March 31, 2024. The decrease was primarily driven by volume deleverage at internal manufacturing sites, unfavorable changes in foreign currency exchange rates, and net input cost inflation, partially offset by favorable value realization.

Skin Health and Beauty Segment

Skin Health and Beauty Segment Net Sales

The Skin Health and Beauty Segment Net sales were $1.0 billion and $1.1 billion for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, a decrease of $77 million, or 7.3%. Excluding the impact of unfavorable changes in foreign currency exchange rates of 2.3% and the reduction in Net sales related to divestitures of 0.2%, Organic sales decline was 4.8%. The Organic sales decline was driven by both volume-related decreases of 2.9% and unfavorable value realization of 1.9% attributable to strategic price investments, primarily in the United States. Volume-related decreases were primarily attributable to current fiscal year competitive pressures and distribution losses, partially offset by increases in hair regrowth products across regions.

Skin Health and Beauty Segment Adjusted Operating Income

The Skin Health and Beauty Segment adjusted operating income decreased by $54 million, or 37.0%, to $92 million for the fiscal three months ended March 30, 2025 as compared to the fiscal three months ended March 31, 2024. The decrease was primarily driven by volume-related Net sales decreases, increased investment in our brands, and unfavorable value realization, partially offset by the realization of benefits associated with our supply chain optimization initiatives.

Essential Health Segment

Essential Health Segment Net Sales

The Essential Health Segment Net sales were $1.1 billion for both the fiscal three months ended March 30, 2025 and March 31, 2024. For the fiscal three months ended March 30, 2025, Net sales decreased $45 million, or 3.9%, as compared to the fiscal three months ended March 31, 2024. Excluding the impact of unfavorable changes in foreign currency exchange rates of 3.9%, Organic sales change was flat due to favorable value realization of 0.1%, offset by volume-related decreases of 0.1%. Volume-related decreases were primarily driven by Women’s Health due to market softness and Oral Care due to increased competitive pressures and market softness, partially offset by Wound Care.

Essential Health Segment Adjusted Operating Income

The Essential Health Segment adjusted operating income decreased by $25 million, or 9.5%, to $239 million for the fiscal three months ended March 30, 2025 as compared to the fiscal three months ended March 31, 2024. The decrease was primarily driven by unfavorable changes in foreign currency exchange rates, net input cost inflation, and increased investment in our brands, partially offset by the realization of benefits associated with our supply chain optimization initiatives.

Liquidity and Capital Resources

Cash Flows

Summarized cash flow information for the fiscal three months ended March 30, 2025 and March 31, 2024 were as follows:

• Calculation not meaningful.

Operating Activities

Net cash flows from operating activities were $428 million and $287 million for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, an increase of $141 million. The increase was primarily attributable to net changes in working capital balances driven by Accounts payable and accrued liabilities due to the timing of payments, Other current and non-current assets due to timing of value-added tax receivables, and Trade receivables due to the timing of sales relative to collections.

Investing Activities

Net cash flows used in investing activities were $167 million and $152 million for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, an increase of $15 million. Net cash flows used in investing activities were primarily driven by purchases of property, plant, and equipment in both the fiscal three months ended March 30, 2025 and March 31, 2024.

Financing Activities

Net cash flows used in financing activities were $310 million and $326 million for the fiscal three months ended March 30, 2025 and March 31, 2024, respectively, a decrease of $16 million. Net cash flows used in financing activities for the fiscal three months ended March 30, 2025 were primarily driven by the $750 million repayment of the 5.50% Senior Notes due 2025 (as defined in Note 4, “Borrowings,” to the Condensed Consolidated Financial Statements included herein), $392 million of dividends paid, and $63 million of payments made to purchase treasury stock, partially offset by $868 million of net proceeds from the issuance of commercial paper under our commercial paper program. Net cash flows used in financing activities for the

fiscal three months ended March 31, 2024 were primarily driven by $383 million of dividends paid and $91 million of payments made to purchase treasury stock, partially offset by $160 million of net proceeds from the issuance of commercial paper under our commercial paper program.

As of March 30, 2025 and March 31, 2024, total debt was $8,738 million and $8,607 million, respectively.

Sources of Liquidity

Our primary sources of liquidity are cash on hand, which consisted of Cash and cash equivalents of $1,057 million as of March 30, 2025, cash flows from operations, borrowing capacity under a revolving credit facility of $4.0 billion which expires in March 2029, and authorized commercial paper program issuance of $4.0 billion. Also, on February 24, 2025, we filed a registration statement on Form S-3 with the SEC under which from time to time we may sell securities. As of March 30, 2025, we had no amounts outstanding under the revolving credit facility and $1,676 million of outstanding balances under our commercial paper program, net of a related discount of $4 million.

Our ability to fund our operating needs will depend on our ability to continue to generate positive cash flows from operations and on our ability to obtain debt financing on acceptable terms or to issue additional equity or equity-linked securities. Based upon our history of generating positive cash flows, we believe our existing cash and cash generated from operations will be sufficient to service our current obligations for at least the next 12 months.

Management believes that our cash balances and funds provided by operating activities, along with borrowing capacity and access to capital markets, taken as a whole, provide adequate liquidity to meet all of our current and long-term obligations when due, including third-party debt that we incurred in connection with the Separation, adequate liquidity to fund capital expenditures, and flexibility to meet investment opportunities that may arise. However, we cannot assure you that we will be able to obtain additional debt or equity financing on acceptable terms in the future.

Cash and cash equivalents decreased by $13 million during the fiscal three months ended March 30, 2025 to $1,057 million as of March 30, 2025, as compared to $1,070 million as of December 29, 2024. Cash and cash equivalents held by our foreign subsidiaries was $1,042 million and $1,044 million as of March 30, 2025 and December 29, 2024, respectively.

Restructuring

As part of our continued transformation to a fit-for-purpose consumer company, during the fiscal year 2024, we began Our Vue Forward to enhance organizational efficiencies and better position Kenvue for future growth. To further Our Vue Forward, on May 6, 2024, our Board approved the 2024 Multi-Year Restructuring Initiative to build on our strengths, improve our underlying information technology infrastructure, and optimize our cost structure by rebalancing resources to better position us for future growth. The 2024 Multi-Year Restructuring Initiative is expected to result in pre-tax restructuring expenses and other charges totaling approximately $550 million. We planned to incur approximately $275 million in pre-tax restructuring expenses and other charges in each of fiscal year 2024 and fiscal year 2025. We incurred lower than expected spend inception-to-date through March 30, 2025 due to the shift in timing of certain information technology and project-related costs to fiscal year 2025 and lower than expected employee-related costs relating to severance spend due to employee redeployment and voluntary exits. Over the life of the initiative, a majority of the pre-tax expenses and other charges are expected to be paid in cash. These charges are expected to be funded primarily through cash flows generated from operations. We began to realize savings resulting from the 2024 Multi-Year Restructuring Initiative in fiscal year 2024, and we expect to realize the full extent of annualized pre-tax gross cost savings of approximately $350 million beginning in fiscal year 2026. We expect to reinvest all or a portion of the benefits associated with the 2024 Multi-Year Restructuring Initiative in future growth opportunities, including immediate reinvestment behind advertising, product promotion, and healthcare professional engagement. Our estimates of the costs of the initiative and the expected benefits are preliminary estimates and are subject to a number of assumptions, including local law requirements in various jurisdictions. Actual charges may differ, possibly materially, from the estimates provided above. See Note 15, “Restructuring Expenses and Operating Model Optimization Initiatives,” to the Condensed Consolidated Financial Statements included herein for further information.

Dividends

Quarterly dividends have been paid to our shareholders since the Kenvue IPO. A summary of cash dividends per share on the outstanding Kenvue common stock declared to shareholders by our Board and paid during the fiscal three months ended March 30, 2025 is presented below:

On April 16, 2025, we announced that our Board declared a dividend of $0.205 per share on our common stock. The dividend is payable on May 28, 2025 to shareholders of record as of the close of business on May 14, 2025.

We expect to continue to pay cash dividends on a quarterly basis. However, the declaration of dividends is subject to the discretion of our Board.

Future Cash Requirements

We expect our future cash requirements will relate to working capital, capital expenditures, restructuring and integration, compensation and benefit-related obligations, interest expense and debt service obligations, litigation costs, the return of capital to shareholders, including through the payment of any dividends, and other contractual obligations that arise in the normal course of business. We may also use cash to enter into business development transactions, such as licensing arrangements or strategic acquisitions.

As of March 30, 2025, we expect our primary cash requirements for fiscal year 2025 to include capital expenditures. We made payments of $179 million for property, plant, and equipment during the fiscal three months ended March 30, 2025.

Future Litigation

In the ordinary course of business, we are involved in litigation, claims, government inquiries, investigations, charges, and proceedings. See Note 13, “Commitments and Contingencies,” to the Condensed Consolidated Financial Statements included herein for further details regarding certain matters that are currently pending. Our ability to successfully resolve pending and future litigation may adversely impact our financial condition, results of operations, or cash flows.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements (as defined under the rules and regulations of the SEC) or any relationships with unconsolidated entities that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, Net sales or expenses, results of operations, liquidity, cash requirements, or capital resources.

Other Information

Deferred Markets

Pursuant to the Separation Agreement, in order to ensure compliance with applicable law, to obtain necessary governmental approvals and other consents, and for other business reasons, we and J&J deferred certain transfers of assets and assumptions of liabilities of businesses in certain non-U.S. jurisdictions, including China, Malaysia, and Russia, until after the completion of the Kenvue IPO. On September 11, 2023, J&J transferred the equity interests in the majority of the Deferred Legal Entities (as defined in Note 1, “Description of the Company and Summary of Significant Accounting Policies,” to the Condensed Consolidated Financial Statements included herein) to the Company that previously had been consolidated as Variable Interest Entities in the Condensed Consolidated Financial Statements. The Condensed Consolidated Financial Statements included herein include businesses in all jurisdictions in which we operate following the completion of the Separation, including any Deferred Local Business (as defined in Note 1, “Description of the Company and Summary of Significant Accounting Policies,” to the Condensed Consolidated Financial Statements included herein). For more information regarding Deferred Local Businesses, see “Risk Factors—Risks Related to Our Relationship with J&J—The transfer of certain assets and liabilities from J&J to us contemplated by the Separation has not been completed and may be significantly delayed or not occur at all” in

our Annual Report and Note 1, “Description of the Company and Summary of Significant Accounting Policies,” to the Condensed Consolidated Financial Statements included herein.

Provision For Taxes

On December 15, 2022, the European Union (“EU”) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation Development (“OECD”) Pillar Two Inclusive Framework that was supported by over 130 countries worldwide. The EU effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive. On July 17, 2023, the OECD published Administrative Guidance proposing certain safe harbors that effectively extend certain effective dates to January 1, 2027. The OECD continues to release additional guidance, including guidance on safe harbors for which we may qualify, and many countries have already implemented legislation consistent with the OECD Pillar Two Framework. Due to these new rules, our provision for taxes could be unfavorably impacted as the legislation becomes effective in countries in which we conduct business. However, based on our current analysis, currently enacted laws for Pillar Two do not have a significant impact on the Condensed Consolidated Financial Statements. We are continuing to evaluate the Model Global Anti-Base Erosion Rules for Pillar Two and related legislation, and their potential impact on future periods.

For quantitative and qualitative disclosures about market risk, see Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” included in our Annual Report.

Evaluation of Disclosure Controls and Procedures

As of March 30, 2025, the end of the period covered by this report, the Company’s management evaluated the effectiveness of the design and operation of its disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. The Company’s Chief Executive Officer and Chief Financial Officer reviewed and participated in this evaluation of Kenvue’s disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of March 30, 2025, the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

During the fiscal three months ended March 30, 2025, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

During the fiscal three months ended September 29, 2024, the Company began a multi-year implementation of a new global enterprise resource planning (“ERP”) system, which will replace and enhance the Company’s existing operating and financial systems. The ERP system is designed to accurately maintain and enhance the flow of financial information, enhance operational functionality, and accelerate information reporting to the Company’s management. The implementation is expected to occur in phases over the next several years.

The portion of the new ERP system implementation that has been completed to date did not result in significant changes to the Company’s internal control over financial reporting. As the phased implementation of the new ERP system continues, the Company will continue to assess whether this new ERP system implementation will materially affect, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

The information called for by this item is incorporated herein by reference to Note 13, “Commitments and Contingencies,” to the Condensed Consolidated Financial Statements included herein.

There have been no material changes in our risk factors from those disclosed under Part I, Item 1A, “Risk Factors” included in our Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no sales of equity securities by the Company during the fiscal three months ended March 30, 2025.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

During the fiscal three months ended October 1, 2023, our Board authorized a share repurchase program, under which we are authorized to repurchase up to 27,000,000 shares of our outstanding common stock in open market or privately negotiated transactions. The program has no expiration date and may be suspended or discontinued at any time. The intent of this repurchase program is to offset dilution from the vesting or exercise of equity-based awards under the Kenvue 2023 Plan (as defined in Note 7, “Stock-Based Compensation,” to the Condensed Consolidated Financial Statements included herein).

The following table represents our purchases of common stock during the fiscal three months ended March 30, 2025:

Insider Trading Arrangements and Policies

During the fiscal three months ended March 30, 2025, none of the Company’s directors or officers (as defined in Rule 16a1(f) under the Exchange Act) adopted or terminated any contract, instruction, or written plan for the purchase or sale of the Company’s securities intended to satisfy the conditions of the affirmative defense provided by Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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 thereunto duly authorized.