KVUE Q2 Earnings Miss Estimates as Margins Narrows, Sales Rise

Kenvue Inc. KVUE reported second-quarter 2026 results, with both revenues and adjusted earnings increasing from the prior-year period. However, the reported figures came below the Zacks Consensus Estimate.

KVUE Q2 Performance: Key Insights

Adjusted earnings were 31 cents per share, up from 29 cents a year ago but missing the Zacks Consensus Estimate of 32 cents.

Kenvue Inc. Price, Consensus and EPS Surprise

Kenvue Inc. price-consensus-eps-surprise-chart | Kenvue Inc. Quote

Net sales increased 3% to $3,955 million from $3,839 million, though they fell short of the consensus estimate of $3,989 million. Organic sales grew 1.6%, driven by 0.9% pricing and 0.7% volume growth.

KVUE Margin & Cost Performance

Adjusted gross profit rose to $2,381 million from $2,338 million, while adjusted gross margin declined to 60.2% from 60.9%. Margin pressure from inflation, tariffs and transactional foreign exchange outweighed benefits from pricing actions and supply-chain productivity initiatives.

Selling, general and administrative expenses increased to $1,537 million from $1,504 million. Restructuring expenses edged down to $59 million from $60 million.

Adjusted operating income increased slightly to $873 million from $870 million. Adjusted operating margin narrowed 60 basis points to 22.1% from 22.7%, reflecting lower gross profitability and higher brand investment, partly offset by cost-saving initiatives.

Adjusted EBITDA rose to $941 million from $938 million, while adjusted EBITDA margin declined to 23.8% from 24.4%.

Self Care Returns to Organic Growth

Self Care sales increased 2.2% to $1,589 million from $1,555 million, missing the Zacks Consensus Estimate of $1,617 million. Organic sales rose 0.6%, as 1.2% pricing more than offset a 0.6% decline in volume. Foreign currency added 1.6 percentage points to reported growth.

The segment returned to organic growth in the United States, supported by strong online demand, Zyrtec market share gains and Pepcid's continued outperformance. Tylenol consumption trends improved from recent quarters, while Nicorette contributed to growth across Europe, the Middle East and Africa and Asia Pacific.

Adjusted operating income declined to $512 million from $527 million despite higher sales.

Beauty Delivers Strongest Revenue Growth

Skin Health and Beauty sales increased 5.1% to $1,113 million from $1,059 million, exceeding the Zacks Consensus Estimate of $1,091 million. Organic sales increased 3.7%, driven by 2.7% pricing and 1% volume growth, while foreign exchange contributed 1.4 percentage points.

Growth was broad-based across all regions, led by Hair Care and Face Care. Continued strength in e-commerce, disciplined commercial execution and products such as OGX Pro Growth + Peptide and Neutrogena Ultra Sheer Sun supported results.

Adjusted operating income increased to $186 million from $149 million.

Essential Health Posts Higher Sales but Lower Profit

Essential Health sales increased 2.3% to $1,253 million from $1,225 million, missing the Zacks Consensus Estimate of $1,274 million. Organic sales rose 1.1%, as 1.9% volume growth more than offset 0.8% unfavorable pricing mix. Foreign currency added 1.2 percentage points.

Growth was led by Wound Care and Baby Care, which more than offset weakness in Oral Care. Online demand, additional U.S. distribution and initiatives involving Band-Aid, Listerine and Stayfree also supported performance.
Adjusted operating income declined to $315 million from $351 million.

Other Financial Information

During the first six months of 2026, operating cash flow increased to $1.2 billion from $1.0 billion. Capital expenditures declined to $0.2 billion from $0.3 billion, lifting free cash flow to $1.0 billion from $0.8 billion.

Cash and cash equivalents totaled $1.1 billion as of June 28, 2026, unchanged from year-end 2025. Total debt remained $8.5 billion, while net debt improved to $7.4 billion from $7.5 billion.

Zacks Rank and Price Performance

Shares of this Zacks Rank #3 (Hold) company have gained 11.2% over the past three months compared with the industry’s growth of 3.9%.

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Some better-ranked stocks have been discussed below:

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The Zacks Consensus Estimate for WDFC’s current fiscal-year sales earnings suggests growth of 9.9% and 7.2%, respectively, from the year-ago reported figures. WDFC reported a trailing four-quarter average earnings surprise of 18.3%.

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The Zacks Consensus Estimate for TBBB’s current fiscal-year sales and earnings implies growth of 44.6% and 52.7%, respectively, from the year-ago reported figures. TBBB delivered a trailing four-quarter negative earnings surprise of 98.9%, on average.

Ryohin Keikaku Co., Ltd. RYKKY engages in the retail of household goods and food items in Japan and internationally. RYKKY currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for RYKKY's current fiscal-year sales and earnings implies growth of 6.9% and 8.3%, respectively, from the year-ago actuals.

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