(Reuters) – Kenvue beat Wall Street estimates for second-quarter profit and revenue on Tuesday, helped primarily by better-than-expected sales in its essential health products unit that sells brands including Band-Aid, Listerine and Carefree.
Investor expectations from the consumer health company, which Johnson & Johnson spun off last year, have been low due to weak uptake for its self-care and skin health products. Its essential health business, however, has been a bright spot.
The essential health unit recorded $1.26 billion in revenue for the second quarter, up nearly 5% from a year earlier and above analysts’ average estimate of $1.24 billion, according to LSEG data.
Essential health’s adjusted operating income jumped nearly 44% to $359 million, while other segments declined.
Kenvue’s skin health business, which sells brands such as Neutrogena and Clean & Clear, was the worst performer, recording a nearly 4% decline in sales to $1.10 billion, compared with LSEG estimate of $1.16 billion.
Sales from self-care – its largest segment that houses Benadryl and Tylenol – slipped 1.6% to $1.64 billion. Analysts, on average, had expected $1.60 billion.
Kenvue has been focusing on improving sales of its skin health products through increased marketing spend and in-store presence, among other measures.
It raised the marketing spend for this year to up to $400 million from $300 million previously. It’s the second time it lifted the forecast, after a 15% jump in February.
The New Jersey-based company posted total second-quarter revenue of $4 billion, above LSEG estimates of $3.94 billion.
On an adjusted basis, Kenvue posted a profit of 32 cents per share, beating analysts’ estimates by 4 cents.
The company maintained its adjusted profit forecast for the year at between $1.10 and $1.20 per share.
(Reporting by Sneha S K and Leroy Leo in Bengaluru; Editing by Shinjini Ganguli)
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