Kenvue (KVUE 1.17%), the consumer health company best known for brands like Tylenol and Band-Aid, reported its earnings for the second quarter on August 7, 2025. The main news from the release: Non-GAAP earnings per share reached $0.29, narrowly beating analyst forecasts of $0.28 (non-GAAP), but GAAP revenue fell to $3.839 billion, slightly below GAAP estimates of $3.85 billion and down from $4.00 billion (GAAP) a year earlier. The period also highlighted positive free cash flow (non-GAAP), even as weak sales impacted all business lines. Management reduced its FY2025 outlook, signaling that tougher times may lie ahead for the company.
| Metric | Q2 2025(ended Jun 29, 2025) | Q2 2025Estimate | Q2 2024(ended Jun 30, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.29 | $0.28 | $0.32 | (9.4%) |
| EPS (GAAP) | $0.22 | 633.33 % | $0.03 | – |
| Revenue (GAAP) | $3.84 billion | $3.85 billion | $4.00 billion | (4.0%) |
| Gross Profit Margin (Non-GAAP) | 60.9 % | 61.6 % | (0.7 pp) | |
| Operating Income Margin (Non-GAAP) | 22.7 % | 22.8 % | (0.1 pp) | |
| Net Income (Non-GAAP) | $560 million | $611 million | (8.3%) |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Recent Strategic Focus
Kenvue develops and markets consumer health products across a range of categories. Its lineup covers essential over-the-counter medicines, personal care items, and wellness products -- including household brands like Tylenol (pain relief and fever reducer), Neutrogena (skin care), and Listerine (mouthwash).
Since separating from Johnson & Johnson in 2023, Kenvue has focused on using digital tools and consumer insights to drive brand relevance, while also aiming to modernize its supply chain and sustain regulatory compliance. The company’s recent efforts place a strong emphasis on productivity, operating margin, and carefully targeted investments in digital marketing and product innovation.
Quarter in Review: Financial Performance and Key Developments
Kenvue’s GAAP revenue declined 4.0% compared to the prior year period. Organic sales, which strip out currency effects and acquisitions or divestitures, fell 4.2%. Volume sold dropped by 3.3%, with an additional 0.9% decline in price/mix (value realization). Management cited a weaker allergy and sun care season in North America as a driver, along with trade inventory swings and shipment timing changes in China.
Looking at Kenvue’s business lines, All three reporting segments showed declines in GAAP net sales. Self Care segment sales, which include products for cold and flu, electrolyte drinks, and pain management, shrank by 4.9%. Sales in Skin Health and Beauty -- including Neutrogena and Aveeno -- were lower by 4.0% on an organic basis. Essential Health, covering oral care, baby, and women’s health, contracted 2.9% on an organic (non-GAAP) basis. The contraction was felt globally: North America GAAP net sales dropped 7.0% year-over-year, Asia Pacific GAAP net sales declined 9.5% year-over-year, while Europe, Middle East, and Africa GAAP net sales increased 5.8% year-over-year.
Kenvue’s GAAP and non-GAAP profit margins stayed relatively stable despite the sales pressure. The non-GAAP gross profit margin slipped by 0.7 percentage points to 60.9%, reflecting pressures from mix and pricing shifts, as well as some inflation. Non-GAAP operating income margin was 22.7%, compared to 22.8% in the prior year period. The company’s non-GAAP free cash flow for the first six months of FY2025 rose to $0.8 billion, up from $0.5 billion in the same period of FY2024. Kenvue also reduced its research and development expense from $105 million in Q2 FY2024 to $91 million, reflecting tighter management of spending on new products and innovations.
The quarter saw significant management changes. Kirk Perry, previously a director on the board, took over as CEO. New appointments were also made in the Chief Financial Officer and Chief Technology & Data Officer roles. The company’s leadership said it is “considering a broad range of potential alternatives” to improve business performance, including a review of its portfolio of brands.
No major regulatory or compliance issues were noted in the release, and Kenvue highlighted progress with its IT separation from Johnson & Johnson. Most separation costs are expected to be done by the end of the third quarter in 2025.
Looking Ahead: Guidance and Investor Watchpoints
Kenvue revised its FY2025 outlook, now expects both reported and organic sales to fall by a low single-digit percentage, assuming no major changes from currency effects. Management also expects the adjusted operating income margin to decline. The new guidance for adjusted (non-GAAP) diluted earnings per share is $1.00 to $1.05, which factors in a slight negative impact from currency movements. For the effective tax rate, management projects an adjusted effective tax rate (non-GAAP) range of 25.5% to 26.5%.
The company highlighted that no major decisions had yet been reached regarding its ongoing strategic review, including potential changes in brand focus or portfolio adjustments. With widespread sales volume declines and continued price investments, investors may want to keep an eye on signs of market share shifts, consumer demand trends, and updates on the company’s supply chain and innovation spending.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
