SKILLMAN, N.J. - Kenvue Inc . (NYSE: NYSE:KVUE) shares climbed 3.4% as the company reported a revenue beat for the fiscal first quarter, with net sales increasing 1.1% to $3.9 billion, surpassing the analyst consensus of $3.85 billion. The consumer health company also matched expectations for adjusted earnings per share (EPS), reporting $0.28, in line with analyst estimates.
Kenvue's financial performance in the first quarter reflects a modest year-over-year (YoY) growth in revenue, building on a strong prior year period. The company's organic growth stood at 1.9%, driven by robust consumer demand in Self Care and growth in Essential Health, particularly Oral Care.
However, this was partially offset by weaker performance in Skin Health and Beauty sectors. The company's gross profit margin expanded to 57.6%, up from 55.2% in the same quarter last year, attributed to value realization and global supply chain efficiency initiatives.
Despite the positive revenue outcome, Kenvue's operating income margin saw a decrease from the previous year, primarily due to a significant impairment charge related to the company's interim headquarters and expenses linked to restructuring.
Nonetheless, the adjusted operating income margin improved slightly, reaching 22.0% compared to 21.3% in the prior year, as the company managed to offset increased brand investment and public company costs with strong adjusted gross profit margin expansion.
Thibaut Mongon, Kenvue's CEO, commented on the quarter's results, stating, "We began executing against our strategic priorities during the quarter, enabling a solid start to the year and advancing Kenvue forward in our ambition to become the undisputed leader in consumer health."
Looking ahead, Kenvue reaffirmed its fiscal year 2024 outlook, anticipating full-year reported net sales growth to be in the range of 1.0% to 3.0%, with organic growth expected to be between 2.0% and 4.0%. The company also expects an adjusted operating income margin slightly below 2023 levels and an adjusted diluted EPS in the range of $1.10 to $1.20. The guidance reflects the company's confidence in its strategic initiatives and ongoing transformation, despite anticipated foreign exchange headwinds.
The company's CFO, Paul Ruh, emphasized the strategic measures being taken to position Kenvue for future success, saying, "These initiatives will enable Kenvue to adjust its cost structure and ways of working to become more competitive while bolstering our ability to deliver on our long-term algorithm of profitable growth, robust durable cash flow generation, and disciplined capital allocation."
Investors responded positively to the news, with the stock moving upward following the earnings release, indicating confidence in the company's ability to meet its financial targets and drive growth in the upcoming quarters.
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