Kenvue Q4 2024 Earnings Report

Kenvue EPS Results

• Actual EPS: $0.26
• Consensus EPS: $0.26
• Beat/Miss: Met Expectations
• One Year Ago EPS: N/A

Kenvue Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $3.79 billion
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Kenvue Announcement Details

• Quarter: Q4 2024
• Date: 2/6/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, February 6, 2025
• Conference Call Time: 8:00AM ET

Kenvue (NYSE:KVUE) operates as a consumer health company worldwide. The company operates through three segments: Self Care, Skin Health and Beauty, and Essential Health. The Self Care segment offers cough, cold and allergy, pain care, digestive health, smoking cessation, eye care, and other products under the Tylenol, Motrin, Benadryl, Nicorette, Zarbee's, ORSLTM, Rhinocort, Calpol, and Zyrtec brands. The Skin Health and Beauty segment provides face and body care, hair, sun, and other care products under the Neutrogena, Aveeno, Dr.Ci:Labo, Le Petit Marseillais, Lubriderm, Rogaine, and OGX brand names. The Essential Health segment offers oral and baby, women's health, wound, and other care products under the Listerine, Johnson's, Band-Aid, and Stayfree, o.b., tampons, Carefree, and Desitin Diaper Rash brands. The company was incorporated in 2022 and is headquartered in Skillman, New Jersey.

Kenvue Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Hello, and welcome to the KenView Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sofia Tacinas, Head of Investor Relations for Canvue.

[Sofya Tsinis, Investor Relations at Kenvue]

Good morning, everyone, and welcome to KenView's fourth quarter and full year twenty twenty four earnings conference call. I'm pleased to be joined today by Deepa Mangon, Chief Executive Officer and Paul Ryu, Chief Financial Officer. Before we get started, I'd like to remind you that today's call includes forward looking statements regarding, among other things, our operating and financial performance, market opportunities and growth. These statements represent our current beliefs, expectations or assumptions about future events and are subject to various risks, uncertainties and changes that are difficult to predict and could cause our actual results to differ materially. For information regarding these risks and uncertainties, please refer to our earnings materials related to this call posted on our website and our filings with the SEC.

[Sofya Tsinis, Investor Relations at Kenvue]

During this call, we will reference certain non GAAP financial information. The presentation of this non GAAP financial information is not intended to be considered in isolation or as a substitute for financial information presented in accordance with U. S. GAAP. These non GAAP financial measures should be viewed in conjunction with the most directly comparable U.

[Sofya Tsinis, Investor Relations at Kenvue]

S. GAAP financial measures and are not presented as substitute for or superior to those most directly comparable U. S. GAAP financial measures. Those most directly comparable U.

[Sofya Tsinis, Investor Relations at Kenvue]

S. GAAP financial measures and a reconciliation of our non GAAP items to their respective nearest U. S. GAAP measures can be found in this morning's earnings press release and our presentation available in our IR page of KenView's website, investors.kenview.com. With that, I'll turn it over to Thibault.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Thank you, Sofia. Good morning, everyone, and thank you for joining us today. I'll begin by sharing our performance and progress in 2024, then provide a review of our results for the fourth quarter. I will disclose by discussing our outlook for 2025, with Paul building on some of these topics later in the call. Our organic sales growth for the year was 1.5%.

[Thibaut Mongon, CEO & DIrector at Kenvue]

This was below our expectations and we are not satisfied with it. As we will discuss later, this was due in parts to lower than expected incidences of cough, cold and flu, which negatively impacted our pediatric pain franchise and a reduction in distributor orders in Asia Pacific, particularly China. While top line missed our expectations, we met or exceeded our expectations on other fronts. We meaningfully expanded our adjusted gross margin and took significant cost out of our infrastructure, which enabled us to increase investments in our brands. And we delivered adjusted diluted EPS for the year of $1.14 squarely within our guidance range.

[Thibaut Mongon, CEO & DIrector at Kenvue]

At the start of 2024, we outlined three priorities for Reaching more consumers, freeing up resources to invest behind our brands and fostering a new culture that rewards performance and impact. While we still have work ahead of us to accelerate growth, we made progress on each one of these priorities. So let me take each one in turn. First, to reach more consumers across our three segments, we strengthened our presence and prominence in store and online, launched impactful innovation and expanded and deepened our engagement with consumers and health care professionals. In self care, we strengthened our leadership positions with nearly 80% of the segment gaining share, including our largest brands Tylenol, Zyrtec and Nicorette amongst others.

[Thibaut Mongon, CEO & DIrector at Kenvue]

In Essential Health, we grew mid single digits and we delivered volume growth in North America, EMEA and Latin America. And in Skin Health and Beauty, we grew both volume and value in EMEA and Latin America, while exiting the year with volume growth in The U. S. We expect to build on this momentum to accelerate volume and organic sales growth in 2025. Second, we are taking significant cost out of the business to enable us to increase investment in our brands.

[Thibaut Mongon, CEO & DIrector at Kenvue]

And here, we are ahead of our plans. We continue to expand adjusted gross margin with an increase of 200 basis points year over year to a competitive 60.4%, driven in large part by strong productivity enhancements in our operations, the muscle that we continue to build at Camview. To Canvue. To put this into a longer term perspective, this is more than 400 basis points ahead of pre COVID levels. In addition, we successfully executed the first year of our become a more agile organization with a more efficient cost structure and are well on track to deliver $350,000,000 of annualized savings by 2026.

[Thibaut Mongon, CEO & DIrector at Kenvue]

As a result of these actions, we were able to increase our total brand investment for the year by about 20%, a significant step toward our plan to reinvest more competitively in the growth of our brands. We invested in three areas. We increased our advertising budget to 10.6% of sales in 2024 compared to 8.7% in the prior year and pivoted to social media influencer led campaigns, which helped us expand our reach and fuel stronger brand health. We also ramped up our investment in healthcare professional engagement. In The U.

[Thibaut Mongon, CEO & DIrector at Kenvue]

S, for example, Neutrogena is now at its highest level of average recommendations by nephrologists in the face category in the last four years. And we invested in stronger in store presence and prominence, which, for example, contributed to the rapid expansion of Neutrogena, Avino and OGX in Europe. Third, we have fundamentally shifted the way we work to embrace a culture of performance and impact across CanView. We introduced a new performance and incentive model directly tied to business outcomes, focusing all CanViewers on our key priorities. And to complement our existing talent, we brought in new team members to elevate our capabilities and expertise across key areas of our business.

[Thibaut Mongon, CEO & DIrector at Kenvue]

We also enhanced our operating model, establishing global brand development teams who are responsible for growing their brands globally with integrated strategies, relevant innovation and impactful communications. This model, now operational in 2025, is not only more effective, but more efficient, avoiding duplications of effort and driving greater accountability. Now I'd like to turn to our fourth quarter results. In Q4, we delivered organic sales growth of 1.7 and adjusted diluted EPS of $0.26 While we were tracking in line with our organic sales growth outlook through November, growth fell short of expectations in December, primarily due to two factors: one, much lower than expected incidences of cold, cough and flu had an outsized impact on our pediatric pain franchise in The U. S.

[Thibaut Mongon, CEO & DIrector at Kenvue]

And in China. And two, we had a reduction in customer orders in Asia Pacific, particularly in China, where we experienced temporary disruption in our distribution network for Essential Health and Skin Health brands. This was driven by secondary distributors who faced liquidity issues and did not fully execute activation programs. We're in the process of replacing these underperforming distributors and reclaiming direct responsibility for activation with key local retailers to avoid this issue in the future. These two factors were unfortunately large enough to mask real progress in the other part of our business.

[Thibaut Mongon, CEO & DIrector at Kenvue]

To help further dimensionalize the impact of the significant decline of pediatric pain incidence on our revenue, total company organic sales growth without this franchise would have been about two points higher in the fourth quarter and about one point higher for the full year 2024. Now looking at each segment, I'll begin with Self Care, which grew organic sales by 2.9% in the fourth quarter. As noted, the low flu season led to a double digit decline over last year in our pediatric pain franchise as a category contracted over forty percent in China and nearly eleven percent in The U. S, our two largest markets. December was much weaker than our and industry projections as a typical peak in pediatric incidences did not occur.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Retailers responded by limiting their orders and in China by starting to reduce the inventory they built ahead of the season. Without pediatric pain, this was a terrific quarter for our self care segment with organic sales growing high single digits as Nikkoraid grew nearly 20%, our Digestive Health franchise grew mid teens and allergy grew high single digits. We continue to drive consumer awareness and amplify innovations such as Tylenol Easy to Swallow through innovative consumer centric campaigns. Importantly, we continue to gain share in self care in the fourth quarter, including in pediatric pain, where we grew share globally by 70 basis points versus last year. In Essential Health, where organic sales decreased 0.7% in the fourth quarter, we faced a material headwind from the decline in customer orders in Asia Pacific, particularly China that I discussed earlier.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Importantly, we do not see this decline in orders reflecting the rate of consumption in the region. Outside of Asia Pacific, the segment grew at a healthy mid single digit rate in Q4 with a third consecutive quarter of volume growth. Innovation continues to play an important role as we drive household penetration in these categories where we command leadership positions. For example, we continue to expand Listerine clinical solutions in The U. S, where the line was the number one innovation in 2024.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Our Abeno Kids range is the fastest growing line in its U. S. Category, and our BAND AID PRO HERO innovation continues to do very well, driving more than a third of our wound care growth in The U. S. For the year.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Finally, in Skin Health and Beauty, we delivered volume led 2.6% organic sales growth for the quarter, albeit on a soft base. EMEA and Latin America continue to be growth engines for the segment, and we drove volume led double digit organic sales growth in the quarter across both regions. In EMEA specifically, Q4 was our eleventh consecutive quarter of organic sales growth with all our major brands, Neutrogena, Aveeno and OGX growing nicely. And we continue to expand in the region with the launch of Aveeno in 12 Central European markets. In North America, we delivered mid single digit organic sales growth during the quarter as we continue to see improvements in the areas we have prioritized thus far.

[Thibaut Mongon, CEO & DIrector at Kenvue]

For example, during the fourth quarter, Neutrogena, our largest brand in skin health, regained its position as the number one face care brand in all U. S. Channel, offline and online. And our Neutrogena cleansing platform, an important entry point for the brand, grew share in the brick and mortar channels in the fourth quarter with a combined effect of increased points of distribution, attractive entry price points on specific codes, influencer led consumer communication and innovation with our new Ultra Gentle cleanser line. While 2024 showed the recovery is not linear and is taking longer than anticipated, we remain encouraged by this progress.

[Thibaut Mongon, CEO & DIrector at Kenvue]

In 2025, we will amplify our innovations and further strengthen our competitiveness. As an example, as part of our strategic collaboration with Doctor. Shah that we announced in Q4, we launched a new major campaign earlier this week featuring artist, Ted MacRae, our newest Intrusion now ambassador. This is a great example of our ambition for the brand with a popular global Gen Z music sensation and the most followed dermatologist on social media getting together to recommend the number one face care brand in America. So let's now turn to our outlook for 2025.

[Thibaut Mongon, CEO & DIrector at Kenvue]

We are entering 2025 with a challenging external environment, economic uncertainty, geopolitical tensions and a stronger dollar. In parallel, consumers continue to look for convenience and value, but are not compromising on their health. So given this backdrop, we expect our weighted categories to grow below historical average in 2025 in the range of 2% to 3% in the geographies where we compete. At Kenview, we are now approximately ninety days from completing what has been a long and resource intensive operational separation from J and J. To put it in perspective, we exited over 2,000 TSAs in more than 50 countries through the end of twenty twenty four without business disruption.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Having now completed approximately 85% of the planned exits, our team continue to find better, simpler and more cost effective ways to operate as an independent company. And as one of the last steps in this separation, we'll officially open our new Chemview headquarters in Summit, New Jersey next month. With TSAExists behind us in 2025, we are ready to enter the next chapter of our journey as an independent company with our number one priority being centered on accelerating profitable growth and generating sustainable value creation. We expect to deliver 2% to 4% organic sales growth in 2025 and grow revenue faster than our categories in the second half of the year. We are confident in our outlook for 2025 for several reasons.

[Thibaut Mongon, CEO & DIrector at Kenvue]

First, we will realize the compounding benefits from the structural changes we implemented in 2024. This year, we will fully activate our new operating model with strong talent, a leaner organization, greater efficiencies and clear roles and responsibilities. Our brands will benefit from a second year of higher investment levels, supported by a healthier P and L with stronger gross margins and lower infrastructure costs. And we will be more agile and move faster, enabled by technology and capabilities that are right for Canvue as a stand alone consumer health company. And second, we have strong plans to drive momentum across our three segments in 2025.

[Thibaut Mongon, CEO & DIrector at Kenvue]

We will launch 40% more innovation compared to 2024, which will further strengthen our portfolio through premiumization, extension into adjacencies and attractive entry price points. We expect net distribution gains this year, driven by the healthy innovation lineup and strengthened retailer partnerships leading to higher prominence of our brands. And our brands will be supported by more competitive trade and marketing investments with stronger partnerships with celebrities, influencers and health care professionals. We have streamlined our roster of advertising agencies and have recently launched our new global content factory, which will drive more impactful content with greater efficiencies. We'll have the opportunity to talk more about our 2025 plans and our next chapter at CAGNY later this month.

[Thibaut Mongon, CEO & DIrector at Kenvue]

While our innovation and marketing support are expected to be equally strong throughout the year, our first half results will not reflect the underlying health of our business as they will be negatively impacted by two main factors: distocking, largely due to the lingering impacts of the weak pediatric pain season and the disruption we are correcting in China and the strategic investment we are making in selective price reductions and trade spend in The U. S. To improve our competitiveness. Importantly, while reinvesting in our brands, we will continue to be extremely disciplined in the management of our P and L and we expect to expand adjusted operating margin in 2025. And with that, I'll turn it over to Paul.

[Paul Ruh, Chief Financial Officer at Kenvue]

Thank you, Thibault, and good morning, everyone. I'll start with an overview of results for the fourth quarter and the year and then close with the details around our outlook for 2025. Fourth quarter organic sales grew 1.7% versus last year, which was disappointing due to the reasons that Thibault highlighted. Organic sales growth in the quarter was relatively balanced between value realization and volume. We drove favorable value realization across all segments and volume growth in both self care and skin health and beauty.

[Paul Ruh, Chief Financial Officer at Kenvue]

Overall, volume increased 0.7% year over year. Value realization contributed 1% to organic sales growth, primarily driven by incremental pricing outside The U. S. For the year, organic sales increased 1.5% with value realization of 2.7% and consolidated volume declines of 1.2%. Going forward, we expect a more normal balance between value realization and volume with a skew to volume increases to drive our organic sales growth.

[Paul Ruh, Chief Financial Officer at Kenvue]

Taking a look at our segments. In the fourth quarter, sales care organic sales grew 2.9% year over year as volumes and value realization contributed one point seven percent and one point two percent of growth respectively. As Thibaut mentioned, the segment delivered very strong organic sales growth, except for pediatric pain, which was a significant drag on the segment and the company growth. Importantly, in self care, we continue to gain share across categories globally for the quarter and full year. In Skin Health and Beauty, organic sales grew 2.6% year over year in the quarter as volume increased 2.1% on easier comparisons and value realization contributed 0.5%.

[Paul Ruh, Chief Financial Officer at Kenvue]

Pricing actions abroad more than offset the impact of our strategic investment behind select price reductions and in store activation in The U. S. We remain focused on building further traction with our commercial efforts to strengthen this segment's performance. And for Essential Health, organic sales declined 0.7% in the quarter with value realization increasing 1.2 year over year, which was more than offset by volume declines of 1.9%. While organic sales for Essential Health grew 4.1% for full year, which was the fastest growth in recent years, the fourth quarter was an outlier, primarily due to a reduction in customer orders in Asia Pacific, particularly in China.

[Paul Ruh, Chief Financial Officer at Kenvue]

Without Asia Pacific, organic sales for Essential Health grew mid single digits in the fourth quarter with Latin America and North America leading the charge. Moving now to adjusted gross margin. Our operations team drove meaningful productivity improvements in 2024, expanding adjusted gross margin by 200 basis points versus last year to 60.4%. As anticipated in the fourth quarter, adjusted gross margin came in at 58.7% versus 59.5% last year, which as you may recall included a non recurring benefit of approximately 50 basis points. In Q4, we continued to generate supply chain efficiencies and value realization, which helped offset inflationary headwinds.

[Paul Ruh, Chief Financial Officer at Kenvue]

Adjusted operating margin was 19.2% in the quarter and landed at 21.5% for the full year, right at the midpoint of our 21% to 22% guidance range. Recall, we raised our total brand investment in 2024 by about 20% with cost savings and gross margin improvement funding this spend. As of 2024 year end, we're more than halfway through realizing our view forward savings and are well on track to get the full annualized run rate of $350,000,000 by 2026. Closing out the P and L, net interest expense was $95,000,000 for the quarter and $378,000,000 for the full year of 2024, in line with our expectations. For taxes, fourth quarter adjusted effective tax rate was 17.7% and full year adjusted effective tax rate was 25.5%, slightly below our expectations due to the realization of discrete tax benefits.

[Paul Ruh, Chief Financial Officer at Kenvue]

And finally, adjusted net income was $499,000,000 for the quarter or $0.26 of adjusted diluted EPS. Full year adjusted net income was $2,200,000,000 or $1.14 adjusted diluted EPS within our 2024 guidance range. Before discussing the outlook for this year, I'd like to take you through two internal initiatives that we are deploying to upgrade data and analytics across multiple facets of KenView as part of the evolution of our company. First, as we continue our revenue growth management effort, we are deploying a global center of excellence that will support our markets with strategic pricing and promotion capabilities. We're also implementing new trade spend management technology in select markets, which will facilitate more robust management of trade investment and better inform promotional spending decisions, all to further improve effectiveness.

[Paul Ruh, Chief Financial Officer at Kenvue]

Second, we will complete the global rollout of integrated business planning with enhanced digital capabilities in 2025. The new IBP process and AI driven tools will improve the level of information that supports our financial forecasting, enhancing planning accuracy. Also, while these upgraded systems and processes do not protect against some demand changes, they collectively enable greater agility and more timely decision making, significantly enhancing our ability to respond to shifting market trends. Now to summarize our expectations for the full year 2025, we expect organic sales growth to be in the 2% to 4% range, representing an acceleration from 2024 levels with growth expected to be volume led. Our assumptions are grounded on approximately 2% to 3% growth across the categories and markets where we compete.

[Paul Ruh, Chief Financial Officer at Kenvue]

Based on current spot rates, we are assuming currency will be an approximately three percent headwind to our top line, resulting in expected net sales in the range of down 1% to up 1%. As you heard from Kibo, we have strong commercial plans for the year for each one of our segments as we bring and amplify more innovation to market, leverage our growing marketing muscle, continue to build distribution and realize benefits from revenue growth management. At the same time, we're coming into 2025 with more competitive brand support levels with the goal to accelerate consumption. We also expect our teams to execute at a higher level in 2025 behind the full adoption of our new operating model. Looking at our segments for the full year, we expect self care organic sales growth will accelerate from 2024 levels, building on a strong leadership positions and continuing to introduce differentiated innovation.

[Paul Ruh, Chief Financial Officer at Kenvue]

In Skin Health and Beauty, we expect to return this segment on a global basis back to organic sales growth in 2025 as we continue to strengthen our U. S. Business, while driving ongoing solid performance in EMEA and Latin America. And finally, in Essential Health, as pricing grows off, we expect to deliver more moderate organic sales growth in 2025 with broad based growth across the categories. From a quarterly progression, as Thibault mentioned, destocking and strategic price investments will impact the cadence of KEMVI's top line and margin performance in the first half of the year.

[Paul Ruh, Chief Financial Officer at Kenvue]

Combined, we estimate these factors will account for a three to four point headwind in the first quarter. As a result, we expect organic sales to decline low single digits in Q1. We expect these headwinds on top line to moderate in the second quarter. These dynamics will mask the underlying health of the business in the first half of the year. As we cycle through them, organic sales growth is expected to be much stronger in the back half of the year relative to the front half.

[Paul Ruh, Chief Financial Officer at Kenvue]

In parallel, we expect 2025 to be another year of strong productivity and efficiencies for our company. We are continuing to accelerate automation, streamline end to end processes, optimize spend, leverage digital and AI to enhance logistics and demand management and are on track to realize the balance of our go forward savings. These combined savings will more than offset the investments we're making behind the business to increase our brand's competitiveness, as well as inflationary and foreign exchange related headwinds that we're facing this year. As a result, we're planning for adjusted operating margin to expand year over year. Given the fluidity of the recent tariff announcements, we have not factored in any impact in this outlook.

[Paul Ruh, Chief Financial Officer at Kenvue]

We are assuming a fairly similar net interest expense to 2024 and adjusted effective tax rate of 25.5% to 26.5% with about 1,930,000,000.00 diluted weighted average shares outstanding. We're planning to grow adjusted diluted EPS on a constant currency basis, slightly ahead of organic sales growth, even as we continue to reinvest at higher rates behind our brands. Adjusted diluted earnings per share are expected to be flat to up 2%, including a mid single digit headwind from currency. In closing, 2025 will be an important year for KenView. As we put our separation from J and J behind us, we enter the next chapter of our journey as an independent company and aim to unleash acceleration in our profitable growth.

[Paul Ruh, Chief Financial Officer at Kenvue]

Our teams around the world are ready and I want to thank them for the passion and focus on helping more consumers realize the extraordinary power of everyday care. Before we open the call for questions, you may have seen the filing that was recently made by Starboard Value. We engage regularly with our shareholders and are open to constructive dialogue and suggestions from all Canvion shareholders. With that said, the purpose of today's call is to discuss our 2024 results and 2025 outlook. We appreciate you keeping your questions focused on these topics and we will not be making any further comments on our shareholder conversations or the nominations at this time.

[Paul Ruh, Chief Financial Officer at Kenvue]

With that, we will open the call for questions.

[Operator]

Thank you. At this time, we will be conducting a question and answer session. In the interest of time, we ask that you please limit yourself to one question Our first question comes from the line of Filippo Feloni with Citi. Please proceed with your question.

[Filippo Falorni, Director - Equity Research at Citi]

Hey, good morning, everyone. So I wanted to ask two clarifications on the organic sales growth guidance for 2025. First, in terms of like the negative impacts that you saw in Q4, both on cold and flu and essential health, Can you give us a sense of like what is the contribution of the drug in Q1? Particularly in cold and flu, it seems like the case count has really picked up in the December, beginning of January. So are you assuming you're not going to get a restocking in on your cold infusion, especially the pediatric cold infusion that you called out?

[Filippo Falorni, Director - Equity Research at Citi]

And then on the kind of Asia Pacific inventory issues, can you walk us through like what impact are you expecting going forward and how long it will take you to fix the disruptions that you called out? Thank you.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Yes. Good morning, Filippo. And so your question about our guidance for 2025, let me start by talking about how we feel confident about our guidance overall. If you think about our starting point, we grew 1.5% in 2024. You heard me say in the prepared remarks that if you without pediatric pain, we would have grown one point higher as a company.

[Thibaut Mongon, CEO & DIrector at Kenvue]

So I would say our run rate exiting 2024 is about 2.5%. If you add to that the stronger plans we have for 2025 and the fact that we are going to benefit from the compounding impact of the structural changes we did in 2024, that's what gets us to the midpoint of our guidance. Now what will bring us up or down? This midpoint will be driven by the quality of the execution and how consumers respond, but also the seasonal businesses and how the seasons are going to behave in 2020, '20 '20 '5. So if the seasons are positive, it will tilt towards the higher end of the guidance.

[Thibaut Mongon, CEO & DIrector at Kenvue]

If it's not the case, it will tilt towards the lower end of the guidance. Now as you said, we expect while we have strong operational plans through the full year, we expect in 2020 in the first quarter to have two factors that will depress our results and mask the underlying health of the business. So first one is a lingering impact of the low pediatric pain incidence that we saw in Q4. And you are right, we are not expecting uptake in Q1 for two reasons. In a market like The U.

[Thibaut Mongon, CEO & DIrector at Kenvue]

S, While we see while we saw an uptick at the January, then a decline in the January and we see a slight uptick again recently, it has been pretty erratic. And I think it's too soon to call for an upside in The U. S. In China, the go to market is different. Distributors and stores tend to stock up ahead of the season.

[Thibaut Mongon, CEO & DIrector at Kenvue]

They had a low season in Q4, as we talked about. And so even if the incidence goes up in Q1, we would expect them to destock and to bleed the inventory in Q1 with no impact on our shipments. And the second reason that will impact the first quarter on that front is the lingering impact of the distribution disruption we saw in China will take a levy of time to fix. Paul, do you want to add something?

[Paul Ruh, Chief Financial Officer at Kenvue]

Thank you, Thibaut. Yes. And I said in my prepared remarks, Filippo, the factors that Thibaut referred to are a drag of about three to four points. So the combination of the low start to the season, particularly in pediatrics and also the lingering impacts of the distribution issues we have in China and Asia Pacific in general. There's one more factor that I would like to mention that gets us to the top line of low single digits in Q1, which is trade investments that we're stepping up in the first half of twenty twenty five.

[Paul Ruh, Chief Financial Officer at Kenvue]

As we think holistically about our brand investment, we're not only have brand marketing investments through advertising, but we are also making sure that our promotional spend in store is competitive and we're doing that primarily in The U. S. Through trade investment and promotional programs. So that's how I get to the number that I explained before. This is temporary.

[Paul Ruh, Chief Financial Officer at Kenvue]

It does not say much about the underlying health of the business because as those impacts are cycled through, we will see the acceleration in the second half of the year as we see the full impact of our plans, including the benefits of RGM, the full impact of our brand plans and some of the absence of the headwinds we saw in 2024. So strong operational plans underlying these impacts that I described.

[Operator]

Thank you. Our next question comes from the line of Peter Graum with UBS. Please proceed with your question.

[Peter Grom, Equity Research Analyst at UBS Group]

Thanks, operator. Good morning, everyone. Maybe just to follow-up on that. I would love to get some perspective on just the category growth assumptions.

[Peter Grom, Equity Research Analyst at UBS Group]

I think you mentioned 2%

[Peter Grom, Equity Research Analyst at UBS Group]

to 3% globally. Can you maybe share how you see that playing out in The U. S. Versus what you might expect internationally? And then just on the guidance, right, I think you just mentioned an acceleration in the back half of the year.

[Peter Grom, Equity Research Analyst at UBS Group]

So should we interpret that as 2Q organic sales growth is going to be muted as well? And then maybe just taking the flip of Filippo's question, I mean, what are you assuming in the fourth quarter? Are you assuming that you get these headwinds that you dealt with from weaker cough and cold from the inventory disruptions? Are you assuming they come back and that's part of the improvement that you're embedding in the back half of the year? Thanks.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Yes, Peter, good morning. So let me take the question your question on the category assumptions for 2025 and Paul will follow-up on the phasing in 2025. So we indeed expect our categories to slow down from a 3% to 4% to a 2% to 3% in 2025. I would say the main reason, Peter, is the fact that you will have a much lower impact of price in 2025 compared to 2024. From a consumer point of view, what we see is, on one hand, consumers are clearly focused on convenience and value, but they are also extremely focused on the health and the health of their loved ones and they are not ready to compromise on this.

[Thibaut Mongon, CEO & DIrector at Kenvue]

And we see it with the example of private label penetration that continues to be, I would say, about flat on a global basis. And actually, if I look at the most recent periods, private label penetration in our category is going down in aggregate. So I would expect a consumer to be continue to be focused on high quality differentiated superior health solutions, but we will have a lower role of pricing in 2025 definitely. Paul, do you want to take to speak about the phasing?

[Paul Ruh, Chief Financial Officer at Kenvue]

Sure. Thank you, Kibo. And Peter, good morning. I described the dynamics in Q1, particularly for the second quarter. We will see we do see an acceleration.

[Paul Ruh, Chief Financial Officer at Kenvue]

We expect an acceleration. And is it it's put into positive territory. It's not all the way to the full strength of our plans because the dynamics in China will take more than one quarter to be fixed. So again, it does not demonstrate the full impact of our plans. When it comes to the fourth quarter assumptions, you're right.

[Paul Ruh, Chief Financial Officer at Kenvue]

What we are talking about in Q4 is the absence of the headwinds that we saw in Q4 of twenty twenty four. We expect a normal season overall in cold, cold and flu. And we also see selective price actions outside The U. S. And the full impact of our plans with the most strengths being seen in Q4 of twenty twenty five.

[Operator]

Thank you. Our next question comes from the line of Anna Lazzull with Bank of America. Please proceed with your question.

[Anna Lizzul, Vice President, Equity Research at Bank of America]

Hi, good morning. Thank you so much for the question. I wanted to ask on Skin Health and Beauty in particular, the volumes starting to recover here in the fourth quarter. And I was wondering just if you can give more insight on the innovation pipeline and any potential for shelf space gains in 2025. I was wondering if you're expecting maybe a better sun care season and then potentially shelf based gains in the fall?

[Anna Lizzul, Vice President, Equity Research at Bank of America]

Thank you.

[Thibaut Mongon, CEO & DIrector at Kenvue]

All right.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Good morning, Anna. Let me take this one. So as far as Skin Health and Beauty is concerned, our our recovery as we saw in 2024 is taking longer than initially anticipated. Having said that, we see that our plans are working when you see our progress in the areas where we focus our efforts.

[Thibaut Mongon, CEO & DIrector at Kenvue]

We continue to see very strong traction in Europe

[Thibaut Mongon, CEO & DIrector at Kenvue]

and Latin America, and we traction in Europe and Latin America, and we would expect continued traction in 2025 in this region. We have strong plans in terms of distribution, innovation and communication. And in North America, we are very encouraged by the positive signs we keep seeing in the region. And you saw that we got our leadership back across all channels in the fourth quarter of online and offline. And so in 2025, we will amplify these efforts to more part of the portfolio.

[Thibaut Mongon, CEO & DIrector at Kenvue]

We have, I would say, largely to a large extent, we revamped our Kin Hudson beauty team with strong talent in 2024 and you start seeing the impact of what this team is doing. We are going to roll out a much stronger innovation pipeline in 2025 in The U. S. And around the world. And this will be supported by strong and I would even say stronger campaigns as we pivot to social media influencer led campaigns and really execute them at a stronger level.

[Thibaut Mongon, CEO & DIrector at Kenvue]

If you look at the campaign we just released this week with Sted MacRe, we got 1,000,000,000 media impressions in the first twenty four hours. That's five times the engagement rate on organic social media. This is what we would expect from industry benchmarks. So up to a very good start. Our investment in Healthcare Professionals is working as well.

[Thibaut Mongon, CEO & DIrector at Kenvue]

And we will continue to invest in this area. So more innovation in Skin Health and Beauty. I will not get into the details of what it will look like for obvious reasons, but we are starting with revitalized Hydroboost session campaign in the first quarter. We are building on the innovation we launched in the fourth quarter our new cleanser lines and our Collagen Bank line, which is up to a good start. We will also increase distribution.

[Thibaut Mongon, CEO & DIrector at Kenvue]

To your question about Sun Care, we feel good about the upcoming season in terms of retailer partnerships. We'll see how the season plays out, but we feel we are well prepared getting into the season and we will continue to invest behind our health care professional recommendation. So all in, that's what makes us confident that we will return the segment to growth in 2025 on a global basis.

[Operator]

Thank you. Our next question comes from the line of Andrea Teixeira with JPMorgan. Please proceed with your question.

[Andrea Teixeira, Analyst at JPMorgan Chase]

Thank you, operator, and good morning, everyone. Can you just elaborate more on the temporary trade investments you're embedding in guidance? And should we expect, I understand like the 3% midpoint of organic sales growth to be mostly driven by volumes in the second half and then the price realization to be negative in The U. S, but positive abroad with FX led pricing. So hopefully, like if you can kind of break it down, if it's fair to assume, number one, that you obviously will have potentially less price realization, but some as you mentioned before, Thibault, I think you to another question had said you expect to have pricing towards the back end of the year.

[Andrea Teixeira, Analyst at JPMorgan Chase]

And then on the operating margin guidance that Paul had mentioned to be above 2024, I understand the puts and takes here is like the synergies are coming in line with what you expected. And then but that's going to be a gross margin accretion. And then your SG and A will have that A and P investment. And I think that's one of the things that we haven't discussed on the call yet. Is the 11% is still holds in 2025 or you're actually investing even more?

[Andrea Teixeira, Analyst at JPMorgan Chase]

Because when you say investment in trade and spending, it's obviously above the line, but you also had said that you are putting more programs in place at the retailer. So I was wondering if that number is appropriate and if you feel this is going to be where you're going to land in 2025. I'll stop here.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Okay. Omera, thank you for your question. I will start with your question on what we really mean by your strategic pricing investments. And then Paul will take your question on SG and A and gross margin. So what are we talking about when we talk about pricing investments?

[Thibaut Mongon, CEO & DIrector at Kenvue]

As we reposition Canvue for activity growth, you see that we are taking deliberate actions across the business to make us more competitive. One aspect of this competitiveness is making sure that our brands are at the right price points for consumers versus our competition. In 2025, we are making adjustments to our business, especially in The U. S, to ensure that this happen. We are not doing it across the board.

[Thibaut Mongon, CEO & DIrector at Kenvue]

We are doing it in select brands, in select codes that where we see an opportunity to be more competitive and be rewarded with higher volume if we become more competitive. I will not give you more details for obvious competitive reasons, but I can give you examples of what it looks like. An example is one thing we are correcting is that in the past, we have made some price increases. And for certain codes, we crossed certain price thresholds that impacted our volumes. So after doing a few successful pilots in 2024, where we have checked that going back down below these price ratios were driving volume.

[Thibaut Mongon, CEO & DIrector at Kenvue]

We are doing we are implementing those again on select codes in 2025. Another example of an investment we are making is simplifying the number of price points within specific brands. In certain brands, over time, the number of price points had grown, prohibiting us from co promoting different products within the same brand at the same price point. We are simplifying this in 2025, reducing the number of price points, which will allow us to co promote our products more effectively and make our displays more effective. So all of that ends up being an investment in the short term, but we are confident that it will turn into a volume growth in the mid to long term.

[Paul Ruh, Chief Financial Officer at Kenvue]

Great. Thank you, Thibaut. And let me put some numbers behind your questions. First of all, you asked whether these will have an impact on volumes or are we going to have negative value realization in The U. S?

[Paul Ruh, Chief Financial Officer at Kenvue]

The answer is yes. We do expect negative value realization in The U. S, primarily in Q1 and in Q2 behind these promotional spend investments. We see brand investment holistically push and pull. That's how every other consumer company does it.

[Paul Ruh, Chief Financial Officer at Kenvue]

And our marketing mix will allow us to be much more competitive at the point of sale and also supported by our brand investments. So what do we expect in the balance of the year? In the second half, those will be rolling out, we will be with the right price points. We will also take in price in the balance of the world and that will allow us to have positive value realization overall towards the second half of the year. How are we funding all of these?

[Paul Ruh, Chief Financial Officer at Kenvue]

That's your second part of your question. We do have very concrete and strong plans both on the gross margin line and on the operating margin line. So when it comes to gross margin, you know that we have delivered a trajectory of gross margin enhancements. We do have line of sight to more building blocks, particularly driven by efficiencies end to end in our value chain, not at the same pace as in the past, of course, but we do see gross margin accretion, modest gross margin accretion in 2025. And when it comes to SG and A, we do believe we have still some room to go in terms of our A and P investment.

[Paul Ruh, Chief Financial Officer at Kenvue]

Again, at a much more moderate level, we're thinking about these push and pull marketing mix model. And we will be very thoughtful about the ROI of both our top and brand marketing investments. But we still want to invest more while we are able to deliver on our algorithm that we talked about, our guidance that we talked about, which is growing our operating margins year over year. So those are the puts and takes, and we believe we have strong efficiency plans because we want to continue to fuel our brands both from a push and pull perspective.

[Operator]

Thank you. Our next question comes from the line of Bonnie Herzog with Goldman Sachs. Please proceed with your question.

[Bonnie Herzog, Managing Director at Goldman Sachs]

All right. Thank you. Good morning, everyone. I actually had a question on your self care segment margins, which contracted a lot in Q4 and then for the full year. So So as you guys called out, the flu season has been tracking much weaker, I guess, than expected.

[Bonnie Herzog, Managing Director at Goldman Sachs]

But just hoping for a little more color on how we should think about segment margin trajectory from here, especially in the context of maybe subdued pricemix growth moving forward and then certainly some of your reinvestment plans? Thank you.

[Paul Ruh, Chief Financial Officer at Kenvue]

Bonnie, thank you for the question. I would not place too much emphasis on a quarterly cross on the quarterly margin by segment. Remember, there is fluidity between the different segments and also it is impacted by mix. We talked about the fact that our pediatrics business was seesaw declines and that certainly impacted our mix. Temporarily, I would say it had the lowest gross margin in self care of the year, but that is temporary.

[Paul Ruh, Chief Financial Officer at Kenvue]

If you think about our overall operating margin performance, we were squarely within the guidance that we talked about. So overall consolidated operating margin was 21.5%. So we contemplated all of these investments and there are puts and takes when it comes to mix, how we drive our brand investments. And we do see as we think about 2025, a little bit of an acceleration in self care gross margin. We will continue to invest in skin health as we talked about, both in the push and the pull And Essential Health will continue to be driving operating margin enhancement for that incremental operating margin that I described.

[Paul Ruh, Chief Financial Officer at Kenvue]

So those are the puts and takes between the different segments and also how mix plays and all of this is supported by strong efficiency programs overall.

[Operator]

Thank you. Our next question comes from the line of Corinne Wolfmeyer with Piper Sandler. Please proceed with your question.

[Korinne Wolfmeyer, Vice President & Senior Equity Research Analyst - Beauty and Wellness at Piper Sandler Companies]

Hey, thanks so much for the question. I'd like to touch a little bit more on kind of like the cadence of the margin trajectory. I know you're talking about a little bit of modest expansion for the full year, but any more deeper color you can provide us on what to expect for Q1 for the gross margin operating margin line and how that should progress over the year? And then maybe you could touch a little bit on some of your risk mitigation plans as it relates to potential tariffs? I know it's still pretty dynamic situation right now and a lot of uncertainty, but how much flexibility do you think you have to offset with pricing and some supply chain enhancements to drive better productivity if tariffs were to take hold?

[Korinne Wolfmeyer, Vice President & Senior Equity Research Analyst - Beauty and Wellness at Piper Sandler Companies]

Thank you.

[Paul Ruh, Chief Financial Officer at Kenvue]

Thank you for the question, Corinne. When it comes to a margin evolution throughout the year, both on the gross margin and at the operating margin level, it will be follow a little bit of the top line trajectory given the leverage that we're seeing, the investment levels that we're seeing, the pricing that I talked about. So it will be more muted towards the first half of the year, particularly in Q1, and we will see an acceleration towards the second quarter and particularly the third quarter. Remember, we talked about the normal cadence that our gross margin follows. Usually the second quarter is the highest one.

[Paul Ruh, Chief Financial Officer at Kenvue]

We will see some investments. So we'll probably see a little bit of a shift more towards the third quarter. And normally the fourth quarter has the associated costs related to plant maintenance, etcetera. So it will follow that trajectory. Net net, we see a more muted Q1 accelerating towards the second quarter, third quarter as well and then going to the normal levels in Q4.

[Paul Ruh, Chief Financial Officer at Kenvue]

So that's the cadence of our gross margin and operating margin. And when it comes to tariffs, of course, that we're following closely. We established a team that is dedicated end to end to tracking the impact of these tariffs. And we have very, very plans that we're ready to trigger. And our exposure is mostly between at this point between The U.

[Paul Ruh, Chief Financial Officer at Kenvue]

S. And Canada. That's where the majority of the cross border trade happens. We do see we do have imports from Canada into The U. S.

[Paul Ruh, Chief Financial Officer at Kenvue]

Very little from Mexico and a small part from China. And we have a variety of levers that we are pulling. And those include, of course, alternate sourcing. We are considering potential pricing actions, but we are not triggering at this point given the fluidity. We are ready, we have the playbook ready and we will be ready to take actions in the short term and also in the long term.

[Paul Ruh, Chief Financial Officer at Kenvue]

The guidance that we have does not include any impact of any tariffs and that's something that we will be, of course, working closely with our customers to ensure that we continue to provide consumers with the right value equation. But we are ready whenever it comes. Our playbook is ready to be activated.

[Operator]

Thank you. Our next question comes from the line of Nick Modi with RBC Capital Markets. Please proceed with your question.

[Nik Modi, Managing Director at RBC Capital Markets]

Yes. Thank you. Good morning, everyone. Thibault, Paul, I was wondering if you could remind us on how the incentive compensation works, particularly for the regional managers. And I'm asking this in the context of are they compensated or the targets post FX, just given the movement of

[Nik Modi, Managing Director at RBC Capital Markets]

the dollar versus the rest of

[Nik Modi, Managing Director at RBC Capital Markets]

the world. And sometimes there's a tendency for folks to pull back on spending to hit post FX numbers. And so I just wanted to get some clarity around that and if you had any thoughts around mitigating that risk if that is in fact how you compensate?

[Paul Ruh, Chief Financial Officer at Kenvue]

So Nick, the metrics that we have for everyone in the company, and by the way, we have an approach to one ChemView, includes it's all in. So we have the levers to be able to offset as much as possible ForEx impacts. And we do not give any dispensation to any teams regarding ForEx. Our plans are on a as they are reflected externally in line with our guidance. We talked about organic sales and we also talked about our EPS on a constant currency basis, but we have we track both.

[Paul Ruh, Chief Financial Officer at Kenvue]

An important thing that I wanted to mention is that we do have hedging programs and we have those for the purpose of predictability and we employ them very rigorously. And the last thing that I wanted to mention is that in 2025, we have already factored in the headwinds that I referred to. So mid single digits headwinds in EPS and that's how we compensate our teams. So it's a holistic approach. It's one team approach and we are not going to take the foot off the pedal when it comes to investment in our brands.

[Paul Ruh, Chief Financial Officer at Kenvue]

Remember, we talked about in 2024 that we would be investing $400,000,000 more in advertising and that's exactly what we did. And we will make all the trade offs, but the majority of the efforts will be towards more taking complexity and unrewarded complexity and other non value added costs out of our P and L to be able to protect the investments despite potential swings in currency. Remember, it's organic, it's one team and that's how we evaluate our teams.

[Operator]

Thank you. Our next question comes from the line of Lauren Lieberman with Barclays. Please proceed with your question.

[Lauren Lieberman, Managing Director at Barclays]

Great. Thanks so much. So sneaking in a clarification and then a real question. Clarification was just in the prepared remarks, I thought you said that Skin Health and Beauty was up mid singles in The U. S, which if that's the case, EMEA and Latin America were up double digits in volume.

[Lauren Lieberman, Managing Director at Barclays]

I just wanted to understand the total results of 2.5%. The more interesting question, the go to market in Asia, you called out in particular essential health, but I was curious what the route to market is for the other categories there. And also just there's a range of what it means to use distributors in China, right? There's the we put stuff on a ship and it's like very hands off, which I don't think is what you do, because I know you have significant local operations. And the other side is, it's just getting the product from point A to point B.

[Lauren Lieberman, Managing Director at Barclays]

So I was just curious to understand where you fall currently on that continuum and with the changes you're looking to make, what it will look like after the fact? And if there is sort of investment you need to make in local capabilities, staffing and so on to complete that journey? Thanks.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Yes. Thank you, Lauren. So very quickly on your first question, you are absolutely right. The U. S.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Grew mid single digit in Skin Health and Beauty in the fourth quarter and EMEA in LATAM grew very strongly double digit. We are very pleased with the performance in of the segment in EMEA and LATAM and we are encouraged to see these improvements in The U. S. Regarding your question about our route to market in China. So remember, the majority of our business in China is in self care.

[Thibaut Mongon, CEO & DIrector at Kenvue]

And for this part of the business, we have one dedicated route to market with distributors who are specialized in serving hospitals and pharmacies across the country. For the non regulated, if you will, part of

[Thibaut Mongon, CEO & DIrector at Kenvue]

the

[Thibaut Mongon, CEO & DIrector at Kenvue]

portfolio, Essential Health and Skin Health, we use different types of distributors. We serve directly what we call our Tier one distributors, who are more at the provincial level. And these distributors sell themselves to lower tier distributors, wholesalers who serve supermarkets, grocery stores in the different tiers of cities and villages in China. So that's how it works. What we are doing about it as we speak is two things.

[Thibaut Mongon, CEO & DIrector at Kenvue]

One, replacing the distributors who are clearly facing difficulties in the current environment in China, which as we all know continues to see a consumer that is cautious about consuming products and are facing liquidity issues. The second thing we are fixing is where we relied too much on these lower tier distributors to activate our brands, we are deploying our teams to reclaim responsibility for the negotiation with these key local retailers of our brand activation teams. That will give us two benefits: one, the better handle of the activation of our brands in these lower tiers within the country and two, more visibility on the quality of the execution in these lower tier customers.

[Operator]

Thank you. Our last question will come from the line of Steve Powers with Deutsche Bank. Please proceed with your question.

[Steve Powers, Equity Research Analyst at Deutsche Bank]

Thank you very much and good morning. Thibault, maybe just to close the loop on Lauren's prior clarification question. If The U. S. And EMEA and Latin America were all sort of comfortably above the segment average, it implies a pretty weak Asia Pacific results.

[Steve Powers, Equity Research Analyst at Deutsche Bank]

So maybe you could just amplify or clarify a little bit on that. My real question was on it's actually on cash flow and just your expectations of cash relative to the $1.14, 1 point 1 7 dollars in EPS that you called. If my math is right, fiscal twenty twenty four conversion of cash kind of came in around 60%. You've obviously previously framed the evergreen target at 100% plus. So just with the TSA exits winding down, how much progress do you think you'll be able to make against that 100% plus target in 2025?

[Steve Powers, Equity Research Analyst at Deutsche Bank]

And then more broadly, when do we think we can get back to achieving that long term run rate on a more consistent basis? Thank you.

[Thibaut Mongon, CEO & DIrector at Kenvue]

Yes. So very quickly on your first question, you're absolutely right, Steve. The quarter was not positive for Asia Pacific for the reason I mentioned in China. Paul, do you want to take the one on free cash flow?

[Paul Ruh, Chief Financial Officer at Kenvue]

Yes, happy to. So just to set the stage, free cash flow in 2023 was EUR 2,700,000,000.0. Free cash flow in 2024 was $1,300,000,000 If we think about what happened between 2023 and 2024, it's about half and half. The first half is separation related items. For example, in 2023, we had a partial year of interest, a partial year of company costs.

[Paul Ruh, Chief Financial Officer at Kenvue]

And the other one were operational elements. In 2024, we had a particular year end, where we didn't have the number of working days at the end of the year. So from an AR perspective, we had a headwind. And remember, we're also investing in our view forward. We're investing to exit the TSAs.

[Paul Ruh, Chief Financial Officer at Kenvue]

So we're very thoughtful and prudent about how we invest in our business for long term success. So that explains the 2023 to 2024. So half and half, If you think about going forward, we are expecting to get closer to the cash conversion that I talked about, but we will not get there in 2025. We will continue to invest in our re forward. We still are investing in TSAs, particularly TSA exit, particularly in IT, which requires investment in SAP and other platforms.

[Paul Ruh, Chief Financial Officer at Kenvue]

And it will give us an opportunity to become much more agile. So those are the right investments that we're doing. And we also talked about the fact that we're moving to our Summit headquarters. It will drive the right energy, the right collaboration within our team. So with those investments behind us, we see very clear line of sight to get into that 90% to 100% cash conversion.

[Paul Ruh, Chief Financial Officer at Kenvue]

But just you know, the separation and the investments that we're going through to set ourselves up for clear success require investment temporarily and then we will have a very strong cash conversion as we traditionally do. And we have very also clear building blocks to be able to get there from a cash conversion cycle perspective as we become a fully, fully independent company and operate in a consumer environment with the right payables, with the right inventories, with the right receivables and because we have two building blocks to get there. So overall, line of sight to that cash conversion after a period of investments, which is the right thing to do.

[Operator]

Thank you. We have reached the end of our question and answer session. I would now like to turn the floor back over to Thibaut Manger for concluding comments.

[Thibaut Mongon, CEO & DIrector at Kenvue]

So thank you all for joining us today. We hope that this call gave you some color on our outlook for 2025. And as I said earlier, we enter 2025 very confident in our ability to deliver on our outlook with the compounding impact of the transformation we led in 2024 and the strength of the plans we have for 2025. So with that, we thank you for joining us today and we'll talk soon.

[Operator]

Thank you. This concludes today's conference. Thank you for your participation. Have a wonderful day. You may now disconnect your lines at this time.

Participants

Executives

• Sofya Tsinis, Investor Relations
• Thibaut Mongon, CEO & DIrector
• Paul Ruh, Chief Financial Officer

Analysts

• Filippo Falorni, Director - Equity Research at Citi
• Peter Grom, Equity Research Analyst at UBS Group
• Anna Lizzul, Vice President, Equity Research at Bank of America
• Andrea Teixeira, Analyst at JPMorgan Chase
• Bonnie Herzog, Managing Director at Goldman Sachs
• Korinne Wolfmeyer, Vice President & Senior Equity Research Analyst - Beauty and Wellness at Piper Sandler Companies
• Nik Modi, Managing Director at RBC Capital Markets
• Lauren Lieberman, Managing Director at Barclays
• Steve Powers, Equity Research Analyst at Deutsche Bank