Kenvue Forecasts Low Single-Digit Organic Sales Decline for 2025 Amid Leadership Transitions and Strategic Review

Kenvue expects low single-digit organic sales decline for 2025 as it undergoes leadership transitions and a strategic review. Interim CEO Kirk L. Perry emphasized the need for change, citing an accelerated growth trajectory. The company is reviewing strategic alternatives, with the Board making changes in leadership to address the challenges.

Kenvue Inc. (NYSE: KVUE), a leading consumer health company, reported a 4.2% year-over-year decline in organic sales for the second quarter of 2025. The company, which houses well-known brands like Tylenol, Neutrogena, and Listerine, announced a comprehensive strategic review to enhance shareholder value following the challenging quarter. This review comes amidst significant leadership changes, including the appointment of Kirk Perry as Interim Chief Executive Officer.

The company's net sales for Q2 2025 totaled $3.8 billion, down from $4.0 billion in the same period last year. The decline was primarily driven by a 3.3% volume decrease and a 0.9% negative value realization. Despite these challenges, Kenvue maintained an adjusted gross profit margin of 60.9%, a 70 basis point year-over-year decrease, and an adjusted operating income margin of 22.7%, only 10 basis points below Q2 2024. Adjusted diluted earnings per share stood at $0.29, down from $0.32 in the prior-year period [1].

All three of Kenvue’s business segments experienced sales declines in the second quarter. Self Care, which includes brands like Tylenol and Zyrtec, saw the steepest decline with organic sales falling 5.9%. Skin Health & Beauty, featuring brands such as Neutrogena and Aveeno, reported a 3.7% organic sales decline, while Essential Health, home to brands like Listerine and Johnson’s, experienced a 2.4% organic sales decline. Management attributed these declines to various factors including strategic price investments in the U.S., underperformance in seasonal categories, and unplanned inventory reductions at certain retail customers [1].

In response to the quarter's performance, Kenvue's board initiated a "comprehensive review of a broad range of strategic alternatives" to unlock shareholder value. Interim CEO Kirk Perry outlined four key areas of focus: reducing organizational complexity, reinforcing a consumer-centric mindset, refocusing on household penetration, and executing flawless go-to-market strategies. The company’s immediate operational priorities include driving reliability and consistency in results through operating discipline and unlocking efficiencies across the P&L [1].

Kenvue has significantly revised its outlook for 2025, expecting organic sales to decline in the low-single-digits for the full year. Adjusted operating income margin is expected to decline year-over-year, and adjusted diluted earnings per share is now projected to be between $1.00 and $1.05. Despite the disappointing results and lowered guidance, Kenvue’s stock showed resilience, trading up 2.15% in premarket to $21.90, suggesting investors are responding positively to the strategic review announcement and new leadership’s focus on operational improvements [1].

References:
[1] https://ca.investing.com/news/company-news/kenvue-q2-2025-slides-organic-sales-fall-42-board-exploring-strategic-alternatives-93CH-4144154