(Reuters) – Kenvue beat Wall Street estimates for first-quarter profit on Tuesday, and said it would cut 4% of its global workforce amid the Tylenol and Band-Aid maker’s efforts to expand its key brands.
Since its spinoff from Johnson & Johnson in May last year, Kenvue has focused on its 15 priority brands to boost growth and said in February it would increase its advertising spending by 15%, or about $300 million, during the year.
The company said on Tuesday it targets pre-tax gross savings of about $350 million annually by 2026 through the cost-cutting program, but will incur $275 million each in restructuring expenses in 2024 and 2025.
Kenvue posted an adjusted profit of 28 cents per share for the first quarter, beating analysts’ estimates of 26 cents.
The self-care segment – which includes cough and cold medicine such as Tylenol and Benadryl – recorded $1.70 billion in net sales, up 3.5% year-on-year and above the average analyst estimate of $1.56 billion, according to LSEG data.
Kenvue’s skin health and beauty segment, consisting of brands including Neutrogena and Clean & Clear, recorded a 5% drop in first-quarter sales to $1.05 billion, but largely in line with estimates.
The company has pushed to improve the presence of its skin health products on store shelves in the U.S. as it looks to reverse sluggish sales over the last few quarters.
The essential health segment, housing brands such as Listerine, Band-Aid and Stayfree, recorded $1.14 billion in sales, up 3.7%, but below analysts’ estimate of $1.17 billion.
The New Jersey-based company posted first-quarter revenue of $3.89 billion, beating estimates of $3.79 billion.
The company maintained its annual profit forecast range of between $1.10 to $1.20 per share.
(Reporting by Sneha S K and Leroy Leo in Bengaluru)
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