Kenvue's second-quarter financials reflected rising cost pressures that trimmed profitability despite modest top-line growth. The consumer-health company, which is the target of a $40 billion acquisition by Kimberly-Clark, said cost headwinds including inflation, tariffs and currency effects more than offset gains from supply-chain savings and pricing.
Quarterly results and margins
Adjusted gross margin for the quarter decreased to 60.2% from 60.9% a year earlier. The company reported adjusted earnings of $0.31 per share for the quarter, a touch below the LSEG consensus of $0.32. Revenue for the period rose 3% to $3.96 billion, narrowly undershooting analysts' expectations of $3.97 billion.
Performance by business segment
Sales in the Self Care division increased 2.2% to $1.59 billion, supported by improved U.S. performance for Tylenol and market share gains for Zyrtec and Pepcid. The Skin Health and Beauty segment grew 5.1% to $1.11 billion, driven by higher sales of hair- and face-care products including OGX and Neutrogena. Essential Health, which covers brands such as Listerine and Band-Aid, recorded sales of $1.25 billion, up 2.3% year-over-year.
Restructuring and acquisition timetable
The company said it expects roughly $250 million in pre-tax charges in 2026 associated with a restructuring program aimed at simplifying operations, strengthening its supply chain and reducing costs. Separately, Kenvue remains subject to a planned $40 billion buyout by Kimberly-Clark, which the company expects to close in the fourth quarter of 2026.
Context and implications
Kenvue's results show a mix of steady demand across core product lines and ongoing margin pressure from macroeconomic and operational factors. While pricing and supply-chain efficiencies provided some offset, the net effect for the quarter was a small miss on both earnings and revenue versus consensus. The announced restructuring charge outlines management's effort to reduce costs, though it will carry a near-term pre-tax expense in 2026.
Key metrics referenced
- Adjusted gross margin: 60.2% vs 60.9% a year earlier
- Adjusted EPS: $0.31 vs LSEG estimate $0.32
- Quarterly sales: $3.96 billion vs analyst estimate $3.97 billion
- Self Care sales: $1.59 billion, up 2.2%
- Skin Health and Beauty sales: $1.11 billion, up 5.1%
- Essential Health sales: $1.25 billion, up 2.3%
- Expected 2026 pre-tax restructuring charges: about $250 million
- Expected closing for Kimberly-Clark acquisition: fourth quarter of 2026