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Mar 30, 2025
Kenvue Q1 2025 Earnings Report
Kenvue reported a decrease in net sales and organic growth during Q1 2025, but saw modest gains in EPS and maintained strong margin performance amid tariff and currency headwinds.
Key Takeaways
Kenvue faced a 3.9% drop in net sales in Q1 2025, primarily due to a 2.7% foreign exchange impact and a 1.2% organic sales decline. Despite these challenges, the company improved its gross profit margin to 58.0%, increased operating income, and achieved higher diluted EPS year-over-year. The adjusted EPS and margins, however, declined slightly. Kenvue updated its FY2025 outlook to reflect tariff and currency pressures.
Net sales declined 3.9% year-over-year to $3.741 billion, with a 1.2% drop in organic sales.
Diluted EPS increased to $0.17 from $0.15 in Q1 2024; adjusted EPS declined to $0.24 from $0.28.
Gross profit margin improved to 58.0%, while adjusted operating income margin fell to 19.8%.
Free cash flow grew to $200 million from $100 million a year earlier.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Kenvue expects net sales to increase 1% to 3% for FY2025, with organic sales growth of 2% to 4%, but anticipates margin pressure from tariffs and currency headwinds.
Positive Outlook
- Maintained organic sales growth guidance of 2% to 4%.
- Mitigation plans in place to offset tariff costs.
- Strong brand investments underway.
- Continued focus on supply chain optimization.
- Cash flow generation remains solid.
Challenges Ahead
- Tariff costs are expected to weigh on margins.
- Foreign currency headwinds anticipated at ~1%.
- Adjusted operating income margin expected to decline YoY.
- Adjusted EPS forecast to remain roughly flat.
- No updated GAAP guidance due to forecast complexity.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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