• Delivered Fourth Consecutive Quarter of Net and Organic Sales 1 Growth
• Diluted EPS Increased 5% to $0.22; Adjusted Diluted EPS 1 Increased 4% to $0.29
– Kenvue Inc. (NYSE: KVUE) today announced financial results for the fiscal third quarter ended September 27, 2026.
“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,” said Kirk Perry, Chief Executive Officer. “Our results reflect continued momentum from disciplined execution, ongoing productivity initiatives, and investment in our brands and innovation. We are strongly on track to deliver our business transformation that we began last year. I want to thank our entire organization for their dedication to delighting our consumers and customers, disciplined execution, and delivering what was promised.”
Perry continued, “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.”
• Net sales increased 3.2% vs the prior year period, reflecting Organic sales growth of 2.9% and a foreign currency benefit of 0.3%.
• Gross profit margin was 59.5% vs 59.1% in the prior year period. Adjusted gross profit margin 1 was 61.5% vs 61.2% in the prior year period.
• Operating income margin was 18.2% vs 16.7% in the prior year period. Adjusted operating income margin 1 was 21.9% vs 21.5% in the prior year period.
• Diluted earnings per share were $0.22 vs $0.21 in the prior year period. Adjusted diluted earnings per share 1 were $0.29 vs $0.28 in the prior year period.
• Due to the pending transaction with Kimberly-Clark, the Company will not be providing forward-looking guidance. 1
Third quarter 2026 Net sales increased 3.2% vs the prior year period, primarily reflecting Organic sales growth of 2.9% and a foreign currency benefit of 0.3%. Organic sales growth was driven by volume growth of 1.6% and favorable value realization of 1.3%.
Third quarter 2026 Gross profit margin was 59.5% vs 59.1% in the prior year period. Adjusted gross profit margin was 61.5% vs 61.2% in the prior year period. The year-over-year change in both measures primarily reflects savings from productivity gains attributable to our global supply chain optimization initiatives, U.S. tariff refunds, and favorable value realization, partially offset by the impact from inflation as well as unfavorable transactional foreign exchange.
Third quarter 2026 Operating income margin was 18.2% vs 16.7% in the prior year period. Third quarter 2026 Adjusted operating income margin was 21.9% vs 21.5% in the prior year period. The year-over-year change in both measures reflects the year-over-year change in Gross profit margin and Adjusted gross profit margin, as well as savings from our cost optimization actions, including the 2026 Restructuring Initiative and Our Vue Forward, partially offset by a year- over-year increase in brand support.
Third quarter 2026 Interest expense, net was $89 million vs $93 million in the prior year period.
Third quarter Effective tax rate was 29.4% vs 24.3% in the prior year period. The Adjusted effective tax rate 1 was 24.7% in the current period vs 24.0% in the prior year period. The year-over-year increase in both measures largely reflects a reduction in favorable discrete return-to-provision adjustments as compared to the prior year, partially offset by the impact of tax law changes.
Third quarter 2026 Diluted earnings per share were $0.22 vs $0.21 in the prior year period. Adjusted diluted earnings per share were $0.29 in the current period vs $0.28 in the prior year period. 2
Third quarter 2026 Net sales increased 5.9% vs the prior year period, reflecting Organic sales growth of 5.4% and a foreign currency benefit of 0.5%. Organic sales growth was driven by a volume increase of 3.4% and favorable value realization of 2.0%. Organic sales increased in Asia Pacific (“APAC”), benefiting from favorable inventory-related comparisons following prior year trade inventory depletion, while strong innovation and commercial execution in Pain Care enabled Motrin ® to outperform the market as the region experienced rising flu incidences. Smoking Cessation delivered low double-digit Organic sales growth in the quarter, led by Europe, Middle East, and Africa (“EMEA”) and APAC, reflecting strong demand and commercial execution for Nicorette ® . Pepcid ® continued to outperform the category, benefitting from strong commercial and innovation-led initiatives. In the U.S., consumption trends improved sequentially, and Tylenol ® gained market share despite lower seasonal incidences versus the prior year period and continued category softness.
Third quarter 2026 Net sales increased 0.1% vs the prior year period, reflecting Organic sales decline of 0.5% and a foreign currency benefit of 0.6%. Organic sales decline was driven by a volume decrease of 1.7%, partially offset by favorable value realization of 1.2%. Organic sales declined vs the prior year period reflecting distribution losses and timing of promotions in the U.S. and the impact of retailer negotiations in Europe. Hair Care was a key growth driver during the quarter, delivering low double-digit Organic sales growth, led by Rogaine ® , which achieved its fourth consecutive quarter of market share gains, and continued momentum behind OGX ® . Innovation continued to contribute to Organic sales performance across all regions, including the expansion of North America Sun Care with the launch of Neutrogena ® Cloud Tech TM featuring BEMT (bemotrizinol) and the brand's proprietary technology, continued expansion of Neutrogena ® Ultra Sheer ® Sun, and momentum behind OGX ® ProGrowth and ProGrowth + Peptide platforms.
Third quarter 2026 Net sales increased 2.5% vs the prior year period, reflecting Organic sales growth of 2.5%. Organic sales growth was driven by a volume increase of 2.0% and favorable value realization of 0.5% with growth across all regions. Baby Care delivered growth for the quarter driven by Johnson’s Baby ® across all regions supported by social commerce acceleration, strong activations, and innovation. Women’s Health also contributed to growth, led by Stayfree ® , which benefited from recent product launches in India, and o.b. ® , which returned to growth in EMEA following its brand restage and pricing actions. Wound Care continued to gain market share, supported by BAND-AID ® Brand PRO HEAL ® 5 Day Protect, distribution expansion, and retailer 3 activations. Innovation remained a key growth driver, including Stayfree ® Secure Nights and XpertXL in India, the ongoing rollout of Listerine ® On-The-Go mouthwash packets, and Johnson’s Baby ® innovations in Latin America.
Fiscal nine months ended September 27, 2026 Net cash flows from operating activities were $1.9 billion vs $1.3 billion in the prior year period, with the improvement driven by an increase in net income and by lower use of working capital. Capital expenditures were $0.3 billion vs $0.4 billion in the prior year period, as Free cash flow 1 increased to $1.6 billion vs $1.0 billion in the prior year period. Total cash and cash equivalents were $1.0 billion as of September 27, 2026 vs $1.1 billion as of December 28, 2025. Total debt was $8.2 billion as of September 27, 2026 vs $8.5 billion as of December 28, 2025.
As previously disclosed, on February 17, 2026, the Company’s Board of Directors approved an initiative (the “2026 Restructuring Initiative”) that aims to optimize its operating model, transform its supply chain, reduce complexity, and drive operational efficiencies, while strengthening core capabilities. The Initiative is expected to result in pre-tax restructuring expenses and other charges totaling approximately $250 million in fiscal year 2026.
Due to the pending transaction with Kimberly-Clark, Kenvue will not be hosting a quarterly conference call. This press release will be posted on the Company’s website at investors.kenvue.com .
Kenvue Inc. is the world’s largest pure-play consumer health company by revenue. Built on more than a century of heritage, our iconic brands, including Aveeno ® , BAND-AID ® Brand, Johnson’s ® , Listerine ® , Neutrogena ® , and Tylenol ® , are science-backed and recommended by healthcare professionals around the world. At Kenvue, we realize the extraordinary power of everyday care. Our teams work every day to put that power in consumers’ hands and earn a place in their hearts and homes. Learn more at kenvue.com .
The Company uses certain non-GAAP financial measures to supplement the financial measures prepared in accordance with U.S. GAAP. There are limitations to the use of the non-GAAP financial 4 measures presented herein. These non-GAAP financial measures are not prepared in accordance with U.S. GAAP, nor do they have any standardized meaning under U.S. GAAP. In addition, other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way the Company calculates such measures. Accordingly, the non-GAAP financial measures may not be comparable to such similarly titled non-GAAP financial measures used by other companies. The Company cautions you not to place undue reliance on these non- GAAP financial measures, but instead to consider them with the most directly comparable U.S. GAAP measure. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation. These non-GAAP financial measures should be considered supplements to, not substitutes for, or superior to, the corresponding financial measures calculated in accordance with U.S. GAAP.
The Company believes the presentation of these measures is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by management. The Company believes these measures help improve investors’ ability to understand the Company’s operating performance and makes it easier to compare the Company’s results with other companies. In addition, the Company believes these measures are also among the primary measures used externally by the Company’s investors, analysts, and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in our industry.
Below are definitions and the reconciliation to the most closely related GAAP measures for the non-GAAP measures used in this press release.
Adjusted diluted earnings per share : We define Adjusted diluted earnings per share as Adjusted net income divided by the weighted average number of diluted shares outstanding. Management views this non-GAAP measure as useful to investors as it provides a supplemental measure of the Company’s performance over time.
Adjusted EBITDA margin : We define EBITDA as U.S. GAAP Net income adjusted for interest, provision for taxes, and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for restructuring expenses and operating model optimization initiatives, costs incurred in connection with our establishment as a standalone public company (“Separation-related costs”), conversion of stock-based awards, stock-based awards granted to individuals employed by Kenvue as of October 2, 2023 (“Founder Shares”), expenses incurred in connection with the pending transaction with Kimberly-Clark (“Pending Transaction and other related costs”), costs associated with the Skillman sale- leaseback, and the impact of the deferred transfer of certain assets and 5 liabilities from Johnson & Johnson in certain jurisdictions (the “Deferred Markets”). We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of U.S. GAAP Net sales. Management believes this non-GAAP measure is useful to investors as it provides a supplemental perspective to the Company’s operating efficiency over time.
Adjusted effective tax rate : We define Adjusted effective tax rate as U.S. GAAP Effective tax rate adjusted for the tax effects on special item adjustments including amortization of intangible assets, restructuring expenses and operating model optimization initiatives, Separation-related costs, conversion of stock-based awards, Founder Shares, Pending Transaction and other related costs, and costs associated with the Skillman sale-leaseback. We also exclude taxes related to the Deferred Markets. Management believes this non-GAAP measure is useful to investors as it provides a supplemental measure of the Company’s performance over time.
Adjusted gross profit margin : We define Adjusted gross profit margin as U.S. GAAP Gross profit margin adjusted for amortization of intangible assets, Separation-related costs, conversion of stock-based awards, Founder Shares, operating model optimization initiatives, and Pending Transaction and other related costs. Management believes this non-GAAP measure is useful to investors as it provides a supplemental perspective to the Company’s operating efficiency over time.
Adjusted net income : We define Adjusted net income as U.S. GAAP Net income adjusted for amortization of intangible assets, restructuring expenses and operating model optimization initiatives, Separation-related costs, conversion of stock-based awards, Founder Shares, Pending Transaction and other related costs, costs associated with the Skillman sale-leaseback, the impact of the Deferred Markets, and their related tax impacts (i.e., special items). Adjusted net income excludes the impact of items that may obscure trends in our underlying performance. Management believes this non-GAAP measure is useful to investors as the Company uses Adjusted net income for strategic decision making, forecasting future results, and evaluating current performance.
Adjusted operating income : We define Adjusted operating income as U.S. GAAP Operating income adjusted for amortization of intangible assets, restructuring expenses and operating model optimization initiatives, Separation-related costs, conversion of stock-based awards, Founder Shares, Pending Transaction and other related costs, costs associated with the Skillman sale-leaseback, and the impact of the Deferred Markets. Management believes this non-GAAP measure is useful to investors as management uses Adjusted operating income to assess the Company’s financial performance. 6 Adjusted operating income margin : We define Adjusted operating income margin as Adjusted operating income as a percentage of U.S. GAAP Net sales. Management believes this non-GAAP measure is useful to investors as it provides a supplemental perspective to the Company’s operating efficiency over time.
Free cash flow : We define Free cash flow as U.S. GAAP Net cash flows from operating activities adjusted for purchases of property, plant, and equipment. Management believes this non-GAAP measure is useful to investors as it provides a view of the Company’s liquidity after deducting capital expenditures, which are considered a necessary component of our ongoing operations.
Organic sales : We define Organic sales as U.S. GAAP Net sales excluding the impact of changes in foreign currency exchange rates and the impact of acquisitions and divestitures. We report changes in Organic sales on a period- over-period basis. Management believes reporting period-over-period changes in Organic sales provides investors with supplemental information that is useful in assessing the Company’s results of operations by excluding the impact of certain items that we believe do not directly reflect our underlying operations.
The Company uses market share and related metrics, including Average Weekly Recommendations, as indicators to assess business performance and trends. Market share references in this press release are derived from a combination of consumption and market share data provided by third-party vendors and internal estimates. Unless otherwise indicated, such references represent the percentage of the dollar value of sales of our products, relative to all product sales in the category in the countries in which the Company operates and purchases data.
Market share data is subject to inherent limitations, including the availability and timing of underlying information. In particular, market share data is not generally available for certain retail channels. The Company measures market share through the most recent period for which market share data is available, which generally reflects a lag time of one or two months. While the Company believes the third-party vendors it uses to provide data are reliable, it has not independently verified the accuracy or completeness of such data or its underlying assumptions. In addition, the Company’s reported market share data may differ from that reported by other companies due to differences in category definitions, geographic scope, internal estimates and other factors.
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements about management’s 7 expectations of Kenvue’s future operating and financial performance, product development, market position, and business strategy. Such forward-looking statements include statements regarding the pending transaction with Kimberly- Clark. Forward-looking statements may be identified by the use of words such as “plans,” “expects,” “will,” “anticipates,” “estimates,” and other words of similar meaning. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Kenvue and its affiliates. Risks and uncertainties include, but are not limited to: the inability to execute on Kenvue’s business development strategy; inflation and other economic factors, such as interest rate and currency exchange rate fluctuations, as well as existing or proposed tariffs and other constraints on trade both in the U.S. and in foreign markets; the ability to successfully manage local, regional, or global economic volatility, including reduced market growth rates, and to generate sufficient income and cash flow to allow Kenvue to effect any dividend payments; Kenvue’s ability to maintain satisfactory credit ratings and access capital markets, which could adversely affect its liquidity, capital position, and borrowing costs; competition, including technological advances, new products, and intellectual property attained by competitors; challenges inherent in new product research and development; uncertainty of commercial success for new and existing products and digital capabilities; challenges to intellectual property protections, including counterfeiting; the ability of Kenvue to successfully execute strategic plans, including the 2026 Restructuring Initiative and any other restructuring or cost-saving initiatives; the impact of business combinations and divestitures, including any ongoing or future transactions; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws and regulations and other stakeholder requirements; changes in behavior and spending patterns of consumers; natural disasters, acts of war, or terrorism, catastrophes, or epidemics, pandemics, or other disease outbreaks; financial instability of international economies and legal systems and sovereign risk; the inability to realize the benefits of the separation from Kenvue’s former parent, Johnson & Johnson; the risk of disruption or unanticipated costs in connection with the separation; the Company’s inability to consummate the pending transaction with Kimberly-Clark due to, among other things, market, regulatory, and other factors; the potential for disruption to the Company’s business resulting from the pending transaction with Kimberly-Clark; and potential adverse effects on the Company’s stock price from the suspension or consummation of the pending transaction with Kimberly-Clark. A further list and descriptions of these risks, uncertainties, and other factors can be found in Kenvue’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other filings, available at investors.kenvue.com or on request from Kenvue. Any forward- 8 looking statement made in this release speaks only as of the date of this release. Kenvue undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or developments or otherwise.
The following tables present a reconciliation of the change in Net sales, as reported, to the change in Organic sales, a non-GAAP measure, for the periods presented:
The following tables present reconciliations of GAAP to non-GAAP for the periods presented:
(1) Depreciation consists of depreciation of property, plant, and equipment and amortization of integration and development costs capitalized in connection with cloud computing arrangements.
(2) Relates to the amortization of definite-lived intangible assets (primarily trademarks, trade names, and customer lists) over their estimated useful lives.
(3) Restructuring expenses and operating model optimization initiatives in the fiscal three and nine months ended September 27, 2026 related to the 2026 Restructuring Initiative and in the fiscal three and nine months ended September 28, 2025 related to the 2024 Multi-year Restructuring Initiative and were composed of the following:
Restructuring expenses and operating model optimization initiatives include accelerated depreciation expense on assets related to the 2026 Restructuring Initiative for the fiscal three and nine months ended September 27, 2026.
(4) Separation-related costs relate to non-recurring costs incurred in connection with our establishment of Kenvue as a standalone public company. Separation-related costs, the impact of the conversion of stock-based compensation awards, and the incremental stock-based compensation from the issuance of the Founder Shares, were composed of the following:
(5) Pending Transaction and other related costs consist of expenses incurred in connection with the pending transaction with Kimberly-Clark, including advisory fees, legal costs, professional service costs, and other related costs.
The following table presents reconciliations of the Effective tax rate, as reported, to Adjusted effective tax rate for the periods presented:
The following table presents a reconciliation of Diluted earnings per share, as reported, to Adjusted diluted earnings per share for the periods presented:
The following table presents a reconciliation of Net cash flows from operating activities, as reported, and Purchases of property, plant, and equipment, as reported, to Free cash flow for the periods presented:
The following table presents the Company’s Net sales by geographic region for the periods presented:
The following table presents the Company’s Research and development expenses for the periods presented. Research and development expenses are included within Selling, general, and administrative expenses.
The following table presents the Company’s Cash and cash equivalents, Total debt, and Net debt balance as of the periods presented:
Full text with the tables
Kenvue Reports Third
Quarter 2026 Results
• Delivered Fourth Consecutive Quarter of Net and Organic Sales 1 Growth
• Net Sales Increased 3.2%; Organic Sales Increased 2.9%
• Diluted EPS Increased 5% to $0.22; Adjusted Diluted EPS 1 Increased 4% to
$0.29
SUMMIT, N.J. October 30, 2026
– Kenvue Inc. (NYSE: KVUE) today announced financial results for the fiscal
third quarter ended September 27, 2026.
“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,” said Kirk Perry, Chief
Executive Officer. “Our results reflect continued momentum from disciplined
execution, ongoing productivity initiatives, and investment in our brands and
innovation. We are strongly on track to deliver our business transformation that
we began last year. I want to thank our entire organization for their dedication
to delighting our consumers and customers, disciplined execution, and delivering
what was promised.”
Perry continued, “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.”
Third Quarter Summary
• Net sales increased 3.2% vs the prior year period, reflecting Organic sales
growth of 2.9% and a foreign currency benefit of 0.3%.
• Gross profit margin was 59.5% vs 59.1% in the prior year period. Adjusted
gross profit margin 1 was 61.5% vs 61.2% in the prior year period.
• Operating income margin was 18.2% vs 16.7% in the prior year period. Adjusted
operating income margin 1 was 21.9% vs 21.5% in the prior year period.
• Diluted earnings per share were $0.22 vs $0.21 in the prior year period.
Adjusted diluted earnings per share 1 were $0.29 vs $0.28 in the prior year
period.
• Due to the pending transaction with Kimberly-Clark, the Company will not be
providing forward-looking guidance.
1
Third Quarter 2026 Financial Results
Net Sales and Organic Sales
Third quarter 2026 Net sales increased 3.2% vs the prior year period, primarily
reflecting Organic sales growth of 2.9% and a foreign currency benefit of 0.3%.
Organic sales growth was driven by volume growth of 1.6% and favorable value
realization of 1.3%.
Gross Profit Margin and Operating Income Margin
Third quarter 2026 Gross profit margin was 59.5% vs 59.1% in the prior year
period. Adjusted gross profit margin was 61.5% vs 61.2% in the prior year
period. The year-over-year change in both measures primarily reflects savings
from productivity gains attributable to our global supply chain optimization
initiatives, U.S. tariff refunds, and favorable value realization, partially
offset by the impact from inflation as well as unfavorable transactional foreign
exchange.
Third quarter 2026 Operating income margin was 18.2% vs 16.7% in the prior year
period. Third quarter 2026 Adjusted operating income margin was 21.9% vs 21.5%
in the prior year period. The year-over-year change in both measures reflects
the year-over-year change in Gross profit margin and Adjusted gross profit
margin, as well as savings from our cost optimization actions, including the
2026 Restructuring Initiative and Our Vue Forward, partially offset by a year-
over-year increase in brand support.
Interest Expense, Net and Taxes
Third quarter 2026 Interest expense, net was $89 million vs $93 million in the
prior year period.
Third quarter Effective tax rate was 29.4% vs 24.3% in the prior year period.
The Adjusted effective tax rate 1 was 24.7% in the current period vs 24.0% in
the prior year period. The year-over-year increase in both measures largely
reflects a reduction in favorable discrete return-to-provision adjustments as
compared to the prior year, partially offset by the impact of tax law changes.
Net Income Per Share (“Earnings Per Share”)
Third quarter 2026 Diluted earnings per share were $0.22 vs $0.21 in the prior
year period. Adjusted diluted earnings per share were $0.29 in the current
period vs $0.28 in the prior year period.
2
Third Quarter 2026 Business Segment Results
Self Care
Third quarter 2026 Net sales increased 5.9% vs the prior year period, reflecting
Organic sales growth of 5.4% and a foreign currency benefit of 0.5%. Organic
sales growth was driven by a volume increase of 3.4% and favorable value
realization of 2.0%. Organic sales increased in Asia Pacific (“APAC”),
benefiting from favorable inventory-related comparisons following prior year
trade inventory depletion, while strong innovation and commercial execution in
Pain Care enabled Motrin ® to outperform the market as the region experienced
rising flu incidences. Smoking Cessation delivered low double-digit Organic
sales growth in the quarter, led by Europe, Middle East, and Africa (“EMEA”) and
APAC, reflecting strong demand and commercial execution for Nicorette ® . Pepcid
® continued to outperform the category, benefitting from strong commercial and
innovation-led initiatives. In the U.S., consumption trends improved
sequentially, and Tylenol ® gained market share despite lower seasonal
incidences versus the prior year period and continued category softness.
Skin Health and Beauty
Third quarter 2026 Net sales increased 0.1% vs the prior year period, reflecting
Organic sales decline of 0.5% and a foreign currency benefit of 0.6%. Organic
sales decline was driven by a volume decrease of 1.7%, partially offset by
favorable value realization of 1.2%. Organic sales declined vs the prior year
period reflecting distribution losses and timing of promotions in the U.S. and
the impact of retailer negotiations in Europe. Hair Care was a key growth driver
during the quarter, delivering low double-digit Organic sales growth, led by
Rogaine ® , which achieved its fourth consecutive quarter of market share gains,
and continued momentum behind OGX ® . Innovation continued to contribute to
Organic sales performance across all regions, including the expansion of North
America Sun Care with the launch of Neutrogena ® Cloud Tech TM featuring BEMT
(bemotrizinol) and the brand's proprietary technology, continued expansion of
Neutrogena ® Ultra Sheer ® Sun, and momentum behind OGX ® ProGrowth and
ProGrowth + Peptide platforms.
Essential Health
Third quarter 2026 Net sales increased 2.5% vs the prior year period, reflecting
Organic sales growth of 2.5%. Organic sales growth was driven by a volume
increase of 2.0% and favorable value realization of 0.5% with growth across all
regions. Baby Care delivered growth for the quarter driven by Johnson’s Baby ®
across all regions supported by social commerce acceleration, strong
activations, and innovation. Women’s Health also contributed to growth, led by
Stayfree ® , which benefited from recent product launches in India, and o.b. ® ,
which returned to growth in EMEA following its brand restage and pricing
actions. Wound Care continued to gain market share, supported by BAND-AID ®
Brand PRO HEAL ® 5 Day Protect, distribution expansion, and retailer
3
activations. Innovation remained a key growth driver, including Stayfree ®
Secure Nights and XpertXL in India, the ongoing rollout of Listerine ® On-The-Go
mouthwash packets, and Johnson’s Baby ® innovations in Latin America.
Cash Flow and Balance Sheet
Fiscal nine months ended September 27, 2026 Net cash flows from operating
activities were $1.9 billion vs $1.3 billion in the prior year period, with the
improvement driven by an increase in net income and by lower use of working
capital. Capital expenditures were $0.3 billion vs $0.4 billion in the prior
year period, as Free cash flow 1 increased to $1.6 billion vs $1.0 billion in
the prior year period. Total cash and cash equivalents were $1.0 billion as of
September 27, 2026 vs $1.1 billion as of December 28, 2025. Total debt was $8.2
billion as of September 27, 2026 vs $8.5 billion as of December 28, 2025.
2026 Restructuring Initiative
As previously disclosed, on February 17, 2026, the Company’s Board of Directors
approved an initiative (the “2026 Restructuring Initiative”) that aims to
optimize its operating model, transform its supply chain, reduce complexity, and
drive operational efficiencies, while strengthening core capabilities. The
Initiative is expected to result in pre-tax restructuring expenses and other
charges totaling approximately $250 million in fiscal year 2026.
No Conference Call
Due to the pending transaction with Kimberly-Clark, Kenvue will not be hosting a
quarterly conference call. This press release will be posted on the Company’s
website at investors.kenvue.com .
About Kenvue
Kenvue Inc. is the world’s largest pure-play consumer health company by revenue.
Built on more than a century of heritage, our iconic brands, including Aveeno ®
, BAND-AID ® Brand, Johnson’s ® , Listerine ® , Neutrogena ® , and Tylenol ® ,
are science-backed and recommended by healthcare professionals around the world.
At Kenvue, we realize the extraordinary power of everyday care. Our teams work
every day to put that power in consumers’ hands and earn a place in their hearts
and homes. Learn more at kenvue.com .
1
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures to supplement the financial
measures prepared in accordance with U.S. GAAP. There are limitations to the use
of the non-GAAP financial
4
measures presented herein. These non-GAAP financial measures are not prepared in
accordance with U.S. GAAP, nor do they have any standardized meaning under U.S.
GAAP. In addition, other companies may use similarly titled non-GAAP financial
measures that are calculated differently from the way the Company calculates
such measures. Accordingly, the non-GAAP financial measures may not be
comparable to such similarly titled non-GAAP financial measures used by other
companies. The Company cautions you not to place undue reliance on these non-
GAAP financial measures, but instead to consider them with the most directly
comparable U.S. GAAP measure. These non-GAAP financial measures have limitations
as analytical tools and should not be considered in isolation. These non-GAAP
financial measures should be considered supplements to, not substitutes for, or
superior to, the corresponding financial measures calculated in accordance with
U.S. GAAP.
The Company believes the presentation of these measures is relevant and useful
for investors because it allows investors to view performance in a manner
similar to the method used by management. The Company believes these measures
help improve investors’ ability to understand the Company’s operating
performance and makes it easier to compare the Company’s results with other
companies. In addition, the Company believes these measures are also among the
primary measures used externally by the Company’s investors, analysts, and peers
in its industry for purposes of valuation and comparing the operating
performance of the Company to other companies in our industry.
Below are definitions and the reconciliation to the most closely related GAAP
measures for the non-GAAP measures used in this press release.
Adjusted diluted earnings per share : We define Adjusted diluted earnings per
share as Adjusted net income divided by the weighted average number of diluted
shares outstanding. Management views this non-GAAP measure as useful to
investors as it provides a supplemental measure of the Company’s performance
over time.
Adjusted EBITDA margin : We define EBITDA as U.S. GAAP Net income adjusted for
interest, provision for taxes, and depreciation and amortization. We define
Adjusted EBITDA as EBITDA adjusted for restructuring expenses and operating
model optimization initiatives, costs incurred in connection with our
establishment as a standalone public company (“Separation-related costs”),
conversion of stock-based awards, stock-based awards granted to individuals
employed by Kenvue as of October 2, 2023 (“Founder Shares”), expenses incurred
in connection with the pending transaction with Kimberly-Clark (“Pending
Transaction and other related costs”), costs associated with the Skillman sale-
leaseback, and the impact of the deferred transfer of certain assets and
5
liabilities from Johnson & Johnson in certain jurisdictions (the “Deferred
Markets”). We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage
of U.S. GAAP Net sales. Management believes this non-GAAP measure is useful to
investors as it provides a supplemental perspective to the Company’s operating
efficiency over time.
Adjusted effective tax rate : We define Adjusted effective tax rate as U.S. GAAP
Effective tax rate adjusted for the tax effects on special item adjustments
including amortization of intangible assets, restructuring expenses and
operating model optimization initiatives, Separation-related costs, conversion
of stock-based awards, Founder Shares, Pending Transaction and other related
costs, and costs associated with the Skillman sale-leaseback. We also exclude
taxes related to the Deferred Markets. Management believes this non-GAAP measure
is useful to investors as it provides a supplemental measure of the Company’s
performance over time.
Adjusted gross profit margin : We define Adjusted gross profit margin as U.S.
GAAP Gross profit margin adjusted for amortization of intangible assets,
Separation-related costs, conversion of stock-based awards, Founder Shares,
operating model optimization initiatives, and Pending Transaction and other
related costs. Management believes this non-GAAP measure is useful to investors
as it provides a supplemental perspective to the Company’s operating efficiency
over time.
Adjusted net income : We define Adjusted net income as U.S. GAAP Net income
adjusted for amortization of intangible assets, restructuring expenses and
operating model optimization initiatives, Separation-related costs, conversion
of stock-based awards, Founder Shares, Pending Transaction and other related
costs, costs associated with the Skillman sale-leaseback, the impact of the
Deferred Markets, and their related tax impacts (i.e., special items). Adjusted
net income excludes the impact of items that may obscure trends in our
underlying performance. Management believes this non-GAAP measure is useful to
investors as the Company uses Adjusted net income for strategic decision making,
forecasting future results, and evaluating current performance.
Adjusted operating income : We define Adjusted operating income as U.S. GAAP
Operating income adjusted for amortization of intangible assets, restructuring
expenses and operating model optimization initiatives, Separation-related costs,
conversion of stock-based awards, Founder Shares, Pending Transaction and other
related costs, costs associated with the Skillman sale-leaseback, and the impact
of the Deferred Markets. Management believes this non-GAAP measure is useful to
investors as management uses Adjusted operating income to assess the Company’s
financial performance.
6
Adjusted operating income margin : We define Adjusted operating income margin as
Adjusted operating income as a percentage of U.S. GAAP Net sales. Management
believes this non-GAAP measure is useful to investors as it provides a
supplemental perspective to the Company’s operating efficiency over time.
Free cash flow : We define Free cash flow as U.S. GAAP Net cash flows from
operating activities adjusted for purchases of property, plant, and equipment.
Management believes this non-GAAP measure is useful to investors as it provides
a view of the Company’s liquidity after deducting capital expenditures, which
are considered a necessary component of our ongoing operations.
Organic sales : We define Organic sales as U.S. GAAP Net sales excluding the
impact of changes in foreign currency exchange rates and the impact of
acquisitions and divestitures. We report changes in Organic sales on a period-
over-period basis. Management believes reporting period-over-period changes in
Organic sales provides investors with supplemental information that is useful in
assessing the Company’s results of operations by excluding the impact of certain
items that we believe do not directly reflect our underlying operations.
Market Share Information
The Company uses market share and related metrics, including Average Weekly
Recommendations, as indicators to assess business performance and trends. Market
share references in this press release are derived from a combination of
consumption and market share data provided by third-party vendors and internal
estimates. Unless otherwise indicated, such references represent the percentage
of the dollar value of sales of our products, relative to all product sales in
the category in the countries in which the Company operates and purchases data.
Market share data is subject to inherent limitations, including the availability
and timing of underlying information. In particular, market share data is not
generally available for certain retail channels. The Company measures market
share through the most recent period for which market share data is available,
which generally reflects a lag time of one or two months. While the Company
believes the third-party vendors it uses to provide data are reliable, it has
not independently verified the accuracy or completeness of such data or its
underlying assumptions. In addition, the Company’s reported market share data
may differ from that reported by other companies due to differences in category
definitions, geographic scope, internal estimates and other factors.
Cautions Concerning Forward-Looking Statements
This press release contains “forward-looking statements” as defined in the
Private Securities Litigation Reform Act of 1995 regarding, among other things,
statements about management’s
7
expectations of Kenvue’s future operating and financial performance, product
development, market position, and business strategy. Such forward-looking
statements include statements regarding the pending transaction with Kimberly-
Clark. Forward-looking statements may be identified by the use of words such as
“plans,” “expects,” “will,” “anticipates,” “estimates,” and other words of
similar meaning. The reader is cautioned not to rely on these forward-looking
statements. These statements are based on current expectations of future events.
If underlying assumptions prove inaccurate or known or unknown risks or
uncertainties materialize, actual results could vary materially from the
expectations and projections of Kenvue and its affiliates. Risks and
uncertainties include, but are not limited to: the inability to execute on
Kenvue’s business development strategy; inflation and other economic factors,
such as interest rate and currency exchange rate fluctuations, as well as
existing or proposed tariffs and other constraints on trade both in the U.S. and
in foreign markets; the ability to successfully manage local, regional, or
global economic volatility, including reduced market growth rates, and to
generate sufficient income and cash flow to allow Kenvue to effect any dividend
payments; Kenvue’s ability to maintain satisfactory credit ratings and access
capital markets, which could adversely affect its liquidity, capital position,
and borrowing costs; competition, including technological advances, new
products, and intellectual property attained by competitors; challenges inherent
in new product research and development; uncertainty of commercial success for
new and existing products and digital capabilities; challenges to intellectual
property protections, including counterfeiting; the ability of Kenvue to
successfully execute strategic plans, including the 2026 Restructuring
Initiative and any other restructuring or cost-saving initiatives; the impact of
business combinations and divestitures, including any ongoing or future
transactions; manufacturing difficulties or delays, internally or within the
supply chain; product efficacy or safety concerns resulting in product recalls
or regulatory action; significant adverse litigation or government action,
including related to product liability claims; changes to applicable laws and
regulations and other stakeholder requirements; changes in behavior and spending
patterns of consumers; natural disasters, acts of war, or terrorism,
catastrophes, or epidemics, pandemics, or other disease outbreaks; financial
instability of international economies and legal systems and sovereign risk; the
inability to realize the benefits of the separation from Kenvue’s former parent,
Johnson & Johnson; the risk of disruption or unanticipated costs in connection
with the separation; the Company’s inability to consummate the pending
transaction with Kimberly-Clark due to, among other things, market, regulatory,
and other factors; the potential for disruption to the Company’s business
resulting from the pending transaction with Kimberly-Clark; and potential
adverse effects on the Company’s stock price from the suspension or consummation
of the pending transaction with Kimberly-Clark. A further list and descriptions
of these risks, uncertainties, and other factors can be found in Kenvue’s
filings with the Securities and Exchange Commission, including its most recent
Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and
other filings, available at investors.kenvue.com or on request from Kenvue. Any
forward-
8
looking statement made in this release speaks only as of the date of this
release. Kenvue undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events, or
developments or otherwise.
Contacts
Investor Relations:
Kenvue_IR@kenvue.com
Media Relations:
media@kenvue.com
9
Kenvue Inc.
Condensed Consolidated Statements of Operations
(Unaudited; Dollars in Millions, Except Per Share Data; Shares in Millions)
Fis… Fis…
Thr… Sep… Sep… Nine Sep… Se…
Mon… 27, 28, Mon… 27, 28,
End… 2026 2025 End… 2026 20…
──────────────────────────────────────────────────────────────────────────────
Net $ 3,8… $ 3,7… $ 11,… $ 11…
sa…
Co…
of 1,5… 1,5… 4,8… 4,…
sa…
Gr… 2,3… 2,2… 6,9… 6,…
pr…
Se…
ge…
and 1,5… 1,5… 4,5… 4,…
ad…
ex…
Re… 33 84 163 204
ex…
Ot…
op… 6 1 23 19
ex…
net
Op… 706 629 2,1… 1,…
in…
Ot…
ex… 8 10 19 26
net
In…
ex… 89 93 274 281
net
In…
be… 609 526 1,8… 1,…
ta…
Pr…
for 179 128 519 432
ta…
Net $ 430 $ 398 $ 1,3… $ 1,…
in…
Net
in…
per
sh…
Ba… $ 0.22 $ 0.21 $ 0.71 $ 0.…
Di… $ 0.22 $ 0.21 $ 0.71 $ 0.…
We…
nu…
of
sh…
ou…
Ba… 1,9… 1,9… 1,9… 1,9…
Di… 1,9… 1,9… 1,9… 1,9…
10
Organic Sales Change
The following tables present a reconciliation of the change in Net sales, as
reported, to the change in Organic sales, a non-GAAP measure, for the periods
presented:
F…
T…
M…
E…
S…
2…
2…
v…
S…
2…
2…
R… I… O…
N… of S…
S… F… C…
C… C…
T…
… O… Pr… V…
S…
C…
… 5… % 0.5 % 5.4 % 2.0 % 3… %
…
…
… 0… 0.6 -0… 1.2 -…
…
…
… 2… — 2.5 0.5 2…
…
… 3… % 0.3 % 2.9 % 1.3 % 1… %
F…
N…
M…
E…
S…
2…
2…
v…
S…
2…
2…
R… I… O…
N… of S…
S… F… C…
C… C…
T…
… O… Pr… V…
S…
C…
… 3… % 2.2 % 1.1 % 1.6 % -… %
…
…
… 4… 1.8 2.7 1.6 1…
…
…
… 3… 1.5 1.7 -0… 1…
…
… 3… % 1.9 % 1.7 % 1.0 % 0… %
(1) Acquisitions and divestitures did not impact the reported Net sales change.
(2) Price/Mix reflects value realization.
Total Segment Net Sales and Adjusted Operating Income
Segment Net sales for the periods presented were as follows:
Net
Sales
(Unau… Fiscal Fiscal
Dolla… Three Septem… Septe… Nine Septe… Septem…
in Months 27, 28, Months 27, 28,
Milli… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Self $ 1,656 $ 1,564 $ 4,944 $ 4,786
Care
Skin
Heal… 1,039 1,038 3,211 3,074
and
Beau…
Esse… 1,191 1,162 3,595 3,484
Heal…
Total
segm… $ 3,886 $ 3,764 $ 11,750 $ 11,344
net
sales
11
Segment Adjusted operating income for the periods presented was as follows:
Adjust…
Operat…
Income
(Unau… Fiscal Fiscal
Dolla… Three Septe… Septem… Nine Septem… Septe…
in Months 27, 28, Months 27, 28,
Milli… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Self
Care
Adju… $ 537 $ 520 $ 1,674 $ 1,613
oper…
inco…
Skin
Heal…
and
Beau… 149 137 503 378
Adju…
oper…
inco…
Esse…
Heal…
Adju… 315 307 929 897
oper…
inco…
Total $ 1,001 $ 964 $ 3,106 $ 2,888
Reco…
to
Adju…
oper…
inco…
(non…
Depr… 77 75 234 226
Gene…
corp… 71 82 210 251
expe…
Other
oper… 6 1 23 19
expe…
net
Othe…
of -4 -5 -25 -30
Defe…
Mark…
Adju…
oper… $ 851 $ 811 $ 2,664 $ 2,422
inco…
(non…
Reco…
to
Inco…
befo…
taxe…
Amor…
of 64 66 193 193
inta…
asse…
Sepa… 6 17 16 79
cost…
Rest…
expe…
and
oper… 41 97 188 232
model
opti…
init…
Conv…
of — 1 1 5
stoc…
awar…
Othe…
of 4 5 25 30
Defe…
Mark…
Foun… — -4 3 4
Shar…
Pend…
Tran…
and 28 — 60 —
other
rela…
cost…
Skil… 2 — 6 —
sale…
Oper… $ 706 $ 629 $ 2,172 $ 1,879
inco…
Other
expe… 8 10 19 26
net
Inte…
expe… 89 93 274 281
net
Inco…
befo… $ 609 $ 526 $ 1,879 $ 1,572
taxes
12
Non-GAAP Financial Information
The following tables present reconciliations of GAAP to non-GAAP for the periods
presented:
Fiscal
Three
Months
Ended
Septe…
27,
2026
──────────────────────────────────────────────────────────────────────────────
(Una…
Doll… As Adjus… Refer… As
in Repor… Adjus…
Mill…
Net $ 3,886 — $ 3,886
sales
Gross $ 2,314 75 -a $ 2,389
prof…
Gross
prof… 59.5 % 61.5 %
marg…
Oper… $ 706 145 -a)-(c $ 851
inco…
Oper…
inco… 18.2 % 21.9 %
marg…
Net $ 430 138 -a)-(d $ 568
inco…
Net
inco… 11.1 % 14.6 %
marg…
Inte…
expe… $ 89
net
Prov…
for $ 179
taxes
Depr…
and $ 141
amor…
EBIT… $ 839 81 -b)-(… $ 920
(non… (e
EBIT…
marg… 21.6 % 23.7 %
(non…
Oth…
De… Cost Ope… Prov…
of of SG&… Exp… for
Ad… Sal… Exp… Net Taxes Tot…
──────────────────────────────────────────────────────────────────────────────
Am…
of $ 64 $ — $ — $ — $ 64
in…
as…
Re… — 33 — — 33
ex…
Op…
mo… 6 2 — — 8
op…
in…
Se…
co…
co…
of
st… 4 2 — — 6
aw…
and
Fo…
Sh…
Pe…
Tr…
and 1 27 — — 28
ot…
re…
co…
Sk… — 2 — — 2
sa…
Im…
of
De… — — 1 — 1
Ma…
in…
ex…
Im…
of
De… — — 3 -3 —
Ma…
for
ta…
Tax
im…
on — — — -4 -4
sp…
it…
ad…
To… $ 75 $ 66 $ 4 $ -7 $ 138
-a -b -c -d
Co…
of
sa… $ 11
le…
am…
-e
13
Fiscal
Three
Months
Ended
Septe…
28,
2025
──────────────────────────────────────────────────────────────────────────────
(Una…
Doll… As Adjus… Refer… As
in Repor… Adjus…
Mill…
Net $ 3,764 — $ 3,764
sales
Gross $ 2,226 79 -a $ 2,305
prof…
Gross
prof… 59.1 % 61.2 %
marg…
Oper… $ 629 182 -a)-(c $ 811
inco…
Oper…
inco… 16.7 % 21.5 %
marg…
Net $ 398 140 -a)-(d $ 538
inco…
Net
inco… 10.6 % 14.3 %
marg…
Inte…
expe… $ 93
net
Prov…
for $ 128
taxes
Depr…
and $ 141
amor…
EBIT… $ 760 116 -b)-(… $ 876
(non… (e
EBIT…
marg… 20.2 % 23.3 %
(non…
Oth…
De… Cost Ope… Pro…
of of SG&… Exp… for
Ad… Sal… Exp… Net Tax… Tot…
──────────────────────────────────────────────────────────────────────────────
Am…
of $ 66 $ — $ — $ — $ 66
in…
as…
Re… — 84 — — 84
ex…
Op…
mo… 8 5 — — 13
op…
in…
Se…
co…
co…
of
st… 5 9 — — 14
aw…
and
Fo…
Sh…
Im…
of
De… — — 2 — 2
Ma…
in…
ex…
Im…
of
De… — — 3 -3 —
Ma…
for
ta…
Tax
im…
on — — — -39 -39
sp…
it…
ad…
To… $ 79 $ 98 $ 5 $ -42 $ 140
-a -b -c -d
Co…
of
sa… $ 13
le…
am…
-e
14
Fiscal
Nine
Months
Ended
Septe…
27,
2026
──────────────────────────────────────────────────────────────────────────────
(Una…
Doll… As Adjus… Refe… As
in Repor… Adjus…
Mill…
Net $ 11,750 — $ 11,7…
sales
Gross $ 6,917 229 -a $ 7,146
prof…
Gross
prof… 58.9 % 60.8 %
marg…
Oper… $ 2,172 492 -a)-… $ 2,664
inco…
Oper…
inco… 18.5 % 22.7 %
marg…
Net $ 1,360 418 -a)-… $ 1,778
inco…
Net
inco… 11.6 % 15.1 %
marg…
Inte…
expe… $ 274
net
Prov…
for $ 519
taxes
Depr…
and $ 427
amor…
EBIT… $ 2,580 299 -b)-… $ 2,879
(non… (e
EBIT…
marg… 22.0 % 24.5 %
(non…
Oth…
D… Cost Ope… Pr…
of of SG… Exp… for
A… Sal… Ex… Net Ta… Tot…
──────────────────────────────────────────────────────────────────────────────
A…
of $ 193 $ — $ — $ — $ 193
i…
a…
R… — 163 — — 163
e…
O…
m… 20 5 — — 25
o…
i…
S…
c…
c…
of
s… 12 8 — — 20
a…
a…
F…
S…
P…
T…
a… 4 56 — — 60
o…
r…
c…
S… — 6 — — 6
s…
I…
of
D… — — 10 — 10
M…
i…
e…
I…
of
D… — — 15 -15 —
M…
f…
t…
T…
i…
on — — — -59 -59
s…
i…
a…
T… $ 229 $ 238 $ 25 $ -74 $ 418
-a -b -c -d
C…
of
s… $ 36
l…
a…
-e
15
Fiscal
Nine
Months
Ended
Septe…
28,
2025
──────────────────────────────────────────────────────────────────────────────
(Una…
Doll… As Adjus… Refe… As
in Repor… Adjus…
Mill…
Net $ 11,344 — $ 11,3…
sales
Gross $ 6,655 233 -a $ 6,888
prof…
Gross
prof… 58.7 % 60.7 %
marg…
Oper… $ 1,879 543 -a)-… $ 2,422
inco…
Oper…
inco… 16.6 % 21.4 %
marg…
Net $ 1,140 423 -a)-… $ 1,563
inco…
Net
inco… 10.0 % 13.8 %
marg…
Inte…
expe… $ 281
net
Prov…
for $ 432
taxes
Depr…
and $ 419
amor…
EBIT… $ 2,272 350 -b)-… $ 2,622
(non… (e
EBIT…
marg… 20.0 % 23.1 %
(non…
Ot…
D… Co… Op… Pro…
of of SG&… Ex… for
A… Sa… Exp… Net Tax… Tot…
──────────────────────────────────────────────────────────────────────────────
A…
of $ 193 $ — $ — $ — $ 193
i…
a…
R… — 204 — — 204
e…
O…
m… 20 8 — — 28
o…
i…
S…
c…
c…
of
s… 20 68 — — 88
a…
a…
F…
S…
I…
of
D… — — 12 — 12
M…
i…
e…
I…
of
D… — — 18 -18 —
M…
f…
t…
T…
i…
on — — — -1… -1…
s…
i…
a…
T… $ 233 $ 280 $ 30 $ -1… $ 423
-a -b -c -d
C…
of
s… $ 40
l…
a…
-e
(1) Depreciation consists of depreciation of property, plant, and equipment and
amortization of integration and development costs capitalized in connection with
cloud computing arrangements.
(2) Relates to the amortization of definite-lived intangible assets (primarily
trademarks, trade names, and customer lists) over their estimated useful lives.
16
(3) Restructuring expenses and operating model optimization initiatives in the
fiscal three and nine months ended September 27, 2026 related to the 2026
Restructuring Initiative and in the fiscal three and nine months ended September
28, 2025 related to the 2024 Multi-year Restructuring Initiative and were
composed of the following:
(Unau… Fiscal Fiscal
Dolla… Three Septe… Septem… Nine Septem… Septe…
in Months 27, 28, Months 27, 28,
Milli… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Empl…
costs
(one…
seve… $ 10 $ 32 $ 87 $ 78
and
other
term…
bene…
Info…
tech…
and 31 60 101 147
proj…
costs
Other
impl… — 5 — 7
costs
Total
rest…
expe…
and $ 41 $ 97 $ 188 $ 232
oper…
model
opti…
init…
Restructuring expenses and operating model optimization initiatives include
accelerated depreciation expense on assets related to the 2026 Restructuring
Initiative for the fiscal three and nine months ended September 27, 2026.
(4) Separation-related costs relate to non-recurring costs incurred in
connection with our establishment of Kenvue as a standalone public company.
Separation-related costs, the impact of the conversion of stock-based
compensation awards, and the incremental stock-based compensation from the
issuance of the Founder Shares, were composed of the following:
(Unau… Fiscal Fiscal
Dolla… Three Septe… Septem… Nine Septem… Septe…
in Months 27, 28, Months 27, 28,
Milli… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Info…
tech… $ 2 $ 12 $ 4 $ 63
and
other
Legal
enti… 4 5 12 16
name
chan…
Total
sepa… $ 6 $ 17 $ 16 $ 79
costs
Conv…
of — 1 1 5
stoc…
awar…
Foun… — -4 3 4
Shar…
Total
sepa…
cost…
conv…
of $ 6 $ 14 $ 20 $ 88
stoc…
awar…
and
Foun…
Shar…
(5) Pending Transaction and other related costs consist of expenses incurred in
connection with the pending transaction with Kimberly-Clark, including advisory
fees, legal costs, professional service costs, and other related costs.
The following table presents reconciliations of the Effective tax rate, as
reported, to Adjusted effective tax rate for the periods presented:
Fisc… Fisc…
Three Sept… Sept… Nine Sept… Septe…
Mont… 27, 28, Mont… 27, 28,
(Una… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Eff…
tax 29.4 % 24.3 % 27.6 % 27.5 %
rate
Adj…
Tax…
on
spe… -4.9 -0.7 -2.8 -1.8
item
adj…
Tax…
rel…
to 0.2 0.4 0.2 0.4
Def…
Mar…
Adj…
Eff…
tax 24.7 % 24.0 % 25.0 % 26.1 %
rate
(no…
17
The following table presents a reconciliation of Diluted earnings per share, as
reported, to Adjusted diluted earnings per share for the periods presented:
Fiscal Fiscal
Three Septe… Septem… Nine Septem… Septe…
Months 27, 28, Months 27, 28,
(Unau… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Dilu…
earn… $ 0.22 $ 0.21 $ 0.71 $ 0.59
per
share
Adju…
Sepa… — 0.01 0.01 0.04
costs
Rest…
expe…
and
oper… 0.02 0.05 0.10 0.12
model
opti…
init…
Amor…
of 0.03 0.03 0.10 0.10
inta…
asse…
Pend…
Tran…
and 0.01 — 0.03 —
other
rela…
costs
Tax
impa…
on — -0.02 -0.03 -0.05
spec…
item
adju…
Other 0.01 — — 0.01
Adju…
dilu…
earn… $ 0.29 $ 0.28 $ 0.92 $ 0.81
per
share
(non…
The following table presents a reconciliation of Net cash flows from operating
activities, as reported, and Purchases of property, plant, and equipment, as
reported, to Free cash flow for the periods presented:
(Unaudited;
Dollars in Fiscal Nine September September 28,
Billions) Months Ended 27, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net cash
flows from $ 1.9 $ 1.3
operating
activities
Purchases of
property, -0.3 -0.4
plant, and
equipment
Free cash
flow $ 1.6 $ 1.0
(non-GAAP)
Note: Numbers may not foot due to rounding.
Other Supplemental Financial Information
The following table presents the Company’s Net sales by geographic region for
the periods presented:
(Unau… Fiscal Fiscal
Dolla… Three Septem… Septe… Nine Septe… Septem…
in Months 27, 28, Months 27, 28,
Milli… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net
sales
by
geog…
regi…
North $ 1,761 $ 1,765 $ 5,526 $ 5,500
Amer…
Euro…
Midd…
East, 970 959 2,918 2,772
and
Afri…
Asia 741 672 2,164 2,072
Paci…
Latin 414 368 1,142 1,000
Amer…
Total
Net
sales $ 3,886 $ 3,764 $ 11,750 $ 11,344
by
geog…
regi…
The following table presents the Company’s Research and development expenses for
the periods presented. Research and development expenses are included within
Selling, general, and administrative expenses.
(Unau… Fiscal Fiscal
Dolla… Three Septem… Septe… Nine Septe… Septem…
in Months 27, 28, Months 27, 28,
Milli… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Rese…
& $ 96 $ 94 $ 274 $ 284
Deve…
18
The following table presents the Company’s Cash and cash equivalents, Total
debt, and Net debt balance as of the periods presented:
(Unaudited;
Dollars in September 27, December 28,
Billions) 2026 2025
──────────────────────────────────────────────────────────────────────────────
Cash and cash $ 1.0 $ 1.1
equivalents
Total debt -8.2 -8.5
Net debt $ -7.2 $ -7.5
Note: Numbers may not foot due to rounding.
19