Kenvue Shares fell Thursday despite the patron health firm defeat second-quarter revenue and profit first quarterly report because it spun off from Johnson & Johnson two months ago.
The corporate, formerly J&J’s consumer health division, has also released optimistic sales projections for 2023.
Kenvue CEO Thibaut Mongon said in a earnings call that the patron landscape “continues to be uncertain” and the corporate expects “market volatility to proceed”. Nevertheless, he noted that buyers are still wanting to buy “trusted” and “effective” health products.
Kenvue’s rhythm was fueled by buoyant demand for a wealth of high-profile brands equivalent to Band-Aid, Tylenol, Listerine, Neutrogena and Aveeno.
“This quarter was further proof of the strength of our portfolio,” Mongon said in an interview.
J&J still owns 90% of Kenvue, meaning it might probably generally control the spinoff’s direction for now.
J&J will reduce its stake in Kenvue through an exchange deal that could possibly be launched “in the approaching days,” J&J’s chief financial officer Joseph Wolk said in an earnings call on Thursday. This offering will allow J&J shareholders to exchange all or a part of their shares for Kenvue common stock.
J&J announced its own earnings for the second quarter on Thursday, which included Kenvue’s results.
Here’s how Kenvue results in comparison with Wall Street expectations, based on an analyst survey by Refinitiv:
- Earnings per share: 32 cents adjusted, in comparison with the expected 30 cents
- Income: USD 4.01 billion in comparison with the expected USD 3.96 billion
Kenvue shares closed nearly 2% lower on Thursday. After a robust public market debut in May, equities struggled as investors query how much growth an organization can provide with its iconic brands when consumers pull back on spending.
Kenvue shares have lost greater than 9% since its public offering, bringing its market value all the way down to roughly $47 billion.
Kenvue, Johnson & Johnson’s consumer health business.
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Kenvue on Thursday also initiated a quarterly money dividend of about 20 cents per share for the third quarter, paid to shareholders on September 7.
Unlike most up-to-date IPOs, Kenvue is already profitable.
The corporate reported second-quarter sales of $4.01 billion, up 5.4% from the identical period a 12 months ago. In keeping with Kenvue, currency headwinds affected sales by about 2.3%.
It reported net income of $430 million, or 23 cents per share, in comparison with $604 million, or 35 cents per share, a 12 months earlier. Excluding certain items, the corporate’s adjusted earnings were 32 cents a share.
Kenvue forecasts sales growth in 2023 by 4.5% to five.5%. In April, following its IPO, Kenvue said it expects annual sales growth to 2025 of around 3% to 4% globally.
The corporate’s full-year adjusted earnings outlook is between $1.26 and $1.31 per share. Analysts polled by Refinitiv expected $1.23 per share.
The corporate reported a rise in sales in its three divisions within the second quarter.
Kenvue’s self-service unit, which incorporates eye care, cough and cold products and vitamins, generated sales of $1.66 billion within the quarter. That is up 12.2% from last 12 months, driven by increased demand linked to higher cases of coughs, colds and flu.
Skincare and wonder products sales totaled $1.15 billion, up 1.9% over the previous 12 months. These products include shampoos, conditioners, anti-hair loss treatments and skincare.
Primary Care items, including baby products, mouthwashes, dentifrices, hygiene products and wound care products, reported net sales of $1.20 billion, up 0.5% from the identical period a 12 months ago.
Kenvue’s IPO continued to show J&J to hundreds of allegations that its talc baby powder and other talc-containing products cause cancer.
These products fall under the corporate’s consumer health business, currently Kenvue, however the spinoff will only take over talc commitments that arise outside of the US and Canada, in line with its IPO filing from January.
There are only a “small number” of lawsuits outside the US and Canada that “we do not consider relevant at this stage,” Mongon said on the Deutsche Bank Global Consumer Conference last month.