Kenvue Inc. (KVUE), the consumer health giant spun off from Johnson & Johnson, has made a significant entry onto the prestigious Fortune 500 list, debuting at number 281. This inclusion, driven by the company's $15.5 billion in full-year sales for 2024, underscores the substantial scale and market presence KVUE commands within the global consumer healthcare industry just two years after its separation. The recognition highlights the inherent value and operational strength embedded within its portfolio of iconic brands, ranging from Tylenol® and Neutrogena® to Listerine®. While this milestone affirms KVUE's position as a major player, a closer look at its recent financial performance and strategic actions reveals a company actively managing macroeconomic challenges while laying the groundwork for future efficiency.
This debut on the Fortune 500 is more than symbolic; it validates KVUE's successful transition to an independent, publicly traded entity and solidifies its standing among the largest corporations by revenue in the United States. For investors, it signals a level of operational maturity and market penetration that accompanies such scale. The company's ability to generate $15.5 billion in sales in 2024, a slight increase of +0.07% compared to 2023 revenue of $15.44 billion, demonstrates a stable top line despite a complex global environment. This stability is a key characteristic of the consumer staples sector, where demand for essential health and hygiene products tends to be resilient.
Navigating Financial Performance Amidst Transition#
Examining KVUE's financial statements reveals a mixed picture in its most recent full fiscal year (ended December 29, 2024) compared to the prior year (ended December 31, 2023). While revenue remained relatively flat, profitability metrics saw a notable decline. Net income decreased significantly by -38.1%, falling from $1.66 billion in 2023 to $1.03 billion in 2024. Consequently, earnings per share (EPS) also saw a substantial drop of -37.93%, impacting the trailing twelve-month EPS which stands at $0.56 as of the latest data. This decline in net income and EPS reflects pressures on the bottom line, even as the top line held steady.
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The company's operating income also declined, from $2.51 billion in 2023 to $1.84 billion in 2024, a decrease of -26.69%. This resulted in a compression of the operating income margin, from 16.27% in 2023 to 11.91% in 2024. Similarly, the net income margin contracted from 10.77% to 6.66%. Gross profit, however, saw an increase from $8.64 billion in 2023 to $8.96 billion in 2024, leading to an improvement in the gross profit margin from 55.96% to 57.97%. This suggests that the pressure on profitability stemmed more from operating expenses, particularly selling, general, and administrative (SG&A) costs, which rose from $5.68 billion in 2023 to $6.33 billion in 2024.
Cash flow performance also showed shifts. Net cash provided by operating activities decreased from $3.17 billion in 2023 to $1.77 billion in 2024, a drop of -44.16%. Free cash flow saw a similar decline of -50.54%, falling from $2.7 billion to $1.33 billion. This contraction in cash generation warrants attention, although it's important to note the positive three-year compound annual growth rate (CAGR) for operating cash flow (+74.31%) and free cash flow (+224.69%) when looking at a slightly longer historical window, indicating volatility potentially related to the spin-off dynamics. Capital expenditures remained relatively stable, at -$469 million in 2023 and -$434 million in 2024. KVUE's balance sheet shows total assets of $25.6 billion as of December 29, 2024, with total liabilities of $15.93 billion and total stockholders' equity of $9.67 billion. Total debt stands at $8.72 billion, resulting in a net debt of $7.65 billion. The total debt to EBITDA ratio is 2.51x, suggesting a manageable debt load relative to its earnings power.
Here is a summary of key financial performance metrics based on the latest available full fiscal year data:
| Metric | FY 2024 | FY 2023 | Change (%) |
|---|---|---|---|
| Revenue | $15.46B | $15.44B | +0.07% |
| Gross Profit | $8.96B | $8.64B | +3.70% |
| Operating Income | $1.84B | $2.51B | -26.69% |
| Net Income | $1.03B | $1.66B | -38.10% |
| EPS | $0.56 (TTM) | $0.82 (FY) | -31.69% (Approx FY change) |
| Operating Cash Flow | $1.77B | $3.17B | -44.16% |
| Free Cash Flow | $1.33B | $2.70B | -50.54% |
| Total Debt to EBITDA | 2.51x | 2.66x | -5.64% |
| Current Ratio | 0.86x | 1.12x | -23.17% |
Note: FY 2023 EPS figure is calculated from Net Income / Shares Outstanding, which is not directly provided but estimated from prior year data for approximate comparison. TTM EPS is the most current figure provided. All financial data is sourced from Monexa AI.
Profitability margins have shown some variability over the past four years. While the gross margin improved in 2024, operating, net, and EBITDA margins have generally trended downwards since 2021, reflecting the increased operating expense base post-spin-off and potentially inflationary pressures and investments.
| Margin Type | FY 2024 | FY 2023 | FY 2022 | FY 2021 |
|---|---|---|---|---|
| Gross Margin | 57.97% | 55.96% | 55.42% | 55.93% |
| Operating Margin | 11.91% | 16.27% | 17.89% | 19.40% |
| Net Margin | 6.66% | 10.77% | 13.81% | 13.80% |
| EBITDA Margin | 15.97% | 20.56% | 24.33% | 25.73% |
Source: Monexa AI
Strategic Response to Macroeconomic Headwinds#
KVUE's recent performance is significantly influenced by broader macroeconomic factors. The company has specifically highlighted the impact of tariffs, currency fluctuations, and geopolitical tensions. Management anticipates a $150 million tariff-related cost in 2025, primarily due to a 145% tariff on certain imports from China. This underscores the vulnerability of global supply chains to trade policy. Furthermore, foreign currency translation is expected to have a low-single-digit adverse effect on both sales and earnings, a common challenge for multinational corporations with significant international operations.
Destocking activities, particularly in markets like China, have also presented challenges. The Skin Health & Beauty segment, for instance, experienced a 4.8% sales decline in Q1 2025, partly attributed to these inventory adjustments by retailers and distributors. This points to fluctuating demand patterns and inventory management challenges in certain regions. Geopolitical tensions are being monitored, though the company has not reported specific supply chain disruptions directly linked to these factors.
In response to these pressures, KVUE is implementing strategic initiatives aimed at enhancing resilience and improving profitability. A key program is