Why did KVUE's Q4 2024 earnings fall short of expectations?

Kenvue's Q4 2024 earnings fell short of expectations due to a combination of factors:

1. Sluggish Demand in China and Slow Growth in Skin and Beauty Products: Kenvue faced challenges in China, with sluggish demand and a decline in skin and beauty product sales in the U.S., which contributed to the softer-than-expected sales growth.
2. Volume Declines and Foreign Currency Headwinds: There was a significant decline in volume performance, primarily due to softer performance in the U.S. skin health and beauty business and continued softness in China. Additionally, the company faced headwinds from foreign currency translation, which impacted revenue and profit margins.
3. Market Disruptions in Asia Pacific: Kenvue experienced disruptions in the Asia Pacific region, which had a significant impact on its Essential Health segment.
4. Gross Profit Margin Improvement: Despite these challenges, Kenvue saw improvements in gross profit margin, which expanded by 80 basis points to 56.5% in Q4, driven by reduced separation-related costs and amortization of intangible assets.

In summary, Kenvue's Q4 2024 earnings fell short of expectations due to a combination of sluggish demand in key markets, volume declines, and foreign currency headwinds, despite improvements in gross profit margin.