Kenvue reports strong Q1 FY26 results as net sales rise 4.5%

USA – Kenvue Inc. has reported net sales of USD 3.9 billion in the fiscal first quarter ended March 29, 2026, an increase of 4.5% versus the same period last year. 

This growth comprised a 0.7% rise in organic sales and a 3.8% contribution from favourable foreign‑exchange movements. 

CEO Kirk Perry described the quarter as an “encouraging start” to the year, noting that the company delivered net and organic sales growth for the second consecutive quarter, alongside meaningful improvements in gross margin, operating margin, and earnings per share.

Gross profit margin rose by 90 basis points to 58.9% versus 58.0% a year earlier, driven by savings from global supply‑chain optimization and positive value realization that more than offset inflation, tariffs, and lower volumes. 

On an adjusted basis, gross profit margin climbed to 60.8%, up from 60.0% in the prior‑year quarter.

Operating income margin improved to 19.6% from 14.9% a year ago, reflecting not only the higher gross margin but also continued cost‑optimization programs such as “Our Vue Forward” and the 2026 Restructuring Initiative.

Adjusted operating income margin rose to 24.0% from 19.8%, underscoring the company’s progress in streamlining its cost base and improving efficiency.

Net income for the quarter was USD 474 million, up from 322 million dollars in the prior‑year period, with diluted earnings per share rising 47% to 0.25 dollars from 0.17 dollars. 

Adjusted diluted earnings per share climbed 33% to 0.32 dollars versus 0.24 dollars a year earlier, exceeding external expectations and highlighting the positive impact of both sales growth and margin expansion. 

Interest expense, net, was 95 million dollars versus 94 million dollars previously, while the effective tax rate edged down slightly to 29.5% from 29.7%, with the adjusted tax rate also contracting modestly to 27.2% from 27.5%.

Self Care net sales grew 1.9% year‑on‑year, driven by a 4.2% foreign‑currency benefit but offset by an organic sales decline of 2.3%, mainly due to weaker cold and flu seasons in major markets. 

Skin Health and Beauty delivered the strongest segment growth, with net sales up 8.4% versus the prior‑year quarter, comprising 5.0% in organic sales and a 3.4% currency benefit. 

Organic growth was underpinned by 4.2% volume growth and 0.8% favorable value realization, as the segment benefited from strong performance in EMEA, Latin America, and Asia Pacific.

Meanwhile, the Essential Health posted net sales growth of 4.9%, with 1.5% from organic sales and 3.4% from currency, driven by 1.4% volume gains and a slight improvement in pricing. 

Net cash flows from operating activities rose to USD 0.5 billion versus USD 0.4 billion in the prior‑year period, primarily reflecting higher net income. 

Capital expenditures dropped to USD 0.1 billion from USD 0.2 billion, lifting free cash flow to USD 0.4 billion versus USD 0.2 billion a year earlier. 

At period end, Kenvue held USD 1.1 billion in cash and cash equivalents, with total debt increasing modestly to USD 8.7 billion from USD 8.5 billion three months prior.

The company also provided an update on its 2026 Restructuring Initiative, approved by the board on February 17, 2026, which targets supply‑chain transformation, simplification of the operating model, and enhanced operational efficiency. 

The initiative is expected to generate about USD 250 million in pre‑tax restructuring and other charges over the full 2026 fiscal year.

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