Kenvue Earnings Top Estimates as Company Plans Job Cuts
Kenvue earnings topped expectations; the board approved a global workforce reduction and $250 million restructuring that could shift positioning.
KEY TAKEAWAYS
- Kenvue reported adjusted EPS of $0.27, beating $0.22 consensus.
- Q4 net sales were $3.8 billion, up 3.2% year-over-year.
- The board approved a 3.5% workforce reduction and a $250 million restructuring targeting $350 million annual savings.
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On Feb. 17, 2026, Kenvue Inc. reported fourth-quarter results that exceeded Street expectations and said its board approved a global workforce reduction and supply-chain overhaul as it prepares to combine with Kimberly-Clark.
Fourth-Quarter Results Show Momentum
Kenvue reported adjusted earnings per share of $0.27, beating the $0.22 consensus by 23%. Net sales reached $3.78 billion, a 3.2% year-over-year increase and above the $3.68 billion estimate. Self-Care sales, including brands like Tylenol and Benadryl, rose 1.5% to about $1.6 billion. Essential Health products such as Listerine and Band-Aid grew 6.1% to roughly $1.2 billion. Organic sales increased 1.2%, with pricing and mix up 1.1% but volume down 1.1%. Full-year 2025 net sales declined 2.1%. Gross profit margin held steady at 56.5%, while adjusted gross profit margin improved 10 basis points to 58.8%. CEO Kirk Perry said, "We ended 2025 with stronger top- and bottom-line performance in the fourth quarter," and management refrained from issuing forward guidance due to the pending transaction.
Restructuring Plan and Expected Savings
The company disclosed in an SEC filing on Feb. 18 that its board approved a plan to reduce global headcount by about 3.5%, or roughly 880 positions from a 22,000-employee base, alongside a supply-chain transformation. The restructuring will generate approximately $250 million in pre-tax charges in 2026, with about 59% related to IT and project costs and 35% tied to employee expenses. The program aims to deliver $350 million in annual pre-tax gross savings by 2026, implying a 125% payback if fully realized. The board framed these actions as steps to accelerate synergy capture ahead of the Kimberly-Clark merger.
Merger Progress and Market Context
The Kimberly-Clark acquisition values Kenvue at an enterprise value of $48.7 billion. The deal offers $3.50 in cash plus 0.14625 Kimberly-Clark shares per Kenvue share. The combined company would generate more than $32 billion in annual revenue and target $2.1 billion in run-rate synergies. Closing is expected in the second half of 2026, pending foreign regulatory approvals after U.S. waiting periods expired. Shareholders overwhelmingly approved the transaction last month. Kenvue shares closed at $18.41 on Feb. 17, down about 1.6% following the restructuring announcement and remain roughly 35% below their spinoff IPO price. Activist investor Starboard Value held 27.3 million shares, a $471 million stake as of Dec. 31, 2025. The company declared a dividend of $0.2075 per share payable Feb. 25. The cash-and-stock deal structure leaves Kenvue’s implied takeout value sensitive to Kimberly-Clark’s share price fluctuations.
