Kenvue sales reach $3.886 billion as profitability improves in third quarter
Key Facts
Kenvue reported net sales of $3.886 billion in the third quarter ended September 27, 2026, compared with $3.764 billion in the year-earlier period. Net income rose to $430 million from $398 million, while diluted earnings per share were $0.22 versus $0.21. On an adjusted basis, earnings per share were $0.29, compared with $0.28 in the year-earlier period. The adjusted result topped Zacks’ consensus estimate of $0.28 a share for the quarter ended in September. Chief Executive Kirk Perry said the company had delivered its “fourth consecutive quarter of net and organic sales growth,” citing strong performance in self care and essential health, improved margins and cash generation.
Organic sales growth was 2.9%, with a positive 0.3% contribution from foreign exchange. Within organic growth, sales volume rose 1.6% and price realization improved 1.3%. In the second quarter, sales rose 3.0% to $3.955 billion from $3.839 billion, while organic growth was 1.6% and foreign exchange contributed 1.4%. Second-quarter organic growth was driven by 0.9% price realization and a 0.7% increase in volume. Organic growth therefore accelerated in the third quarter, while the contribution from foreign exchange was lower than in the previous quarter.
The company’s margins improved from the year-earlier period, with gross margin at 59.5% versus 59.1% and operating income margin rising to 18.2% from 16.7%. Adjusted gross margin also rose to 61.5% from 61.2%, and adjusted operating income margin to 21.9% from 21.5%. Kenvue attributed the margin improvement to productivity gains, supply chain improvements, U.S. tariff refunds and price realization. It said inflation and currency volatility offset some of those gains. Net cash from operating activities totaled $1.9 billion in the nine months ended September 27, compared with $1.3 billion in the year-earlier period, while free cash flow rose to $1.6 billion from $1.0 billion.
Self care led segment performance, with sales up 5.9%, organic growth of 5.4% and a positive foreign exchange impact of 0.5%. Organic growth reflected a 3.4% increase in volume and 2.0% improvement in price realization. Kenvue said Motrin outperformed the market amid an increase in flu cases in the region. In essential health, sales and organic growth rose 2.5%, driven by a 2.0% increase in volume and 0.5% price realization, with growth across all regions. Skin health and beauty sales increased 0.1% despite a 0.5% decline in organic sales.
The company attributed the decline in organic sales in its skin health and beauty segment to distribution losses and the timing of promotions in the United States, as well as the impact of retail negotiations in Europe. By contrast, organic hair care sales grew at a low double-digit rate. The pending deal with Kimberly-Clark continued to constrain the company’s communication about its future performance: Kenvue said it would not provide forward guidance because of the deal. It had also previously announced that it would not hold a quarterly earnings review call. That leaves investors with the quarterly results and comparisons with prior periods, as the company has not issued its outlook for the next period.
Under the acquisition terms, Kenvue shareholders will receive $3.50 in cash and 0.14625 Kimberly-Clark share for each share, for total consideration of $21.01 a share based on the reference closing price on October 31, 2025. Kimberly-Clark valued the deal at about $48.7 billion in enterprise value when it was announced. Shareholders of both companies approved the deal on January 29, 2026, and the U.S. antitrust waiting period expired on February 4 of the same year. On October 1, Kimberly-Clark said the acquisition was still targeted to close in the fourth quarter of 2026. Completion remains subject to regulatory approvals and satisfaction of the customary remaining closing conditions.