AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Established brands and demonstrated pricing actions support a limited intangible advantage. Brand-specific premiums and comparative competitive outcomes are missing; no other structural moat mechanism is demonstrated.
durability · 2/4 · Issuer-reported brand heritage and pricing across several years support persistence, but 2025 volume losses and current price investments limit confidence in durable economic protection.
customer dependency · 1/4 · Brand familiarity may encourage repeat demand, but dependence is weakly evidenced. Volume losses and Oral Care competitive pressure demonstrate demand vulnerability; no switching friction or measured repeat-purchase behavior is disclosed.
erosion resilience · 2/4 · Second-quarter 2026 organic growth and supply-chain offsets show some resilience following 2025 contraction. Continued competitive pressure, price investment and lower aggregate segment operating income prevent a strong grade.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · 2025 price/mix increased just 0.1%; second-quarter 2026 increased 0.9%, with explicit Self Care pricing actions. Essential Health's negative price/mix and strategic price investments demonstrate uneven power. Mix effects prevent treating these figures as pure pricing.
retention · 2/4 · Indirect demand evidence is mixed: 2025 volume fell 2.3%, followed by second-quarter 2026 volume growth of 0.7%. Inventory and illness incidence explain part of the weakness, while Oral Care faced competition. These are operating proxies, not measured consumer retention rates.
margin resilience · 2/4 · Pricing and supply-chain savings partially offset inflation and tariffs, but 2025 aggregate segment adjusted operating income declined 4.6%, and second-quarter 2026 declined 1.4% despite sales growth. Resilience is partial and cannot be attributed solely to pricing.
contractual freedom · 2/4 · Disclosed new pricing actions and strategic price investments demonstrate practical discretion to change prices in both directions. Customer contract terms and the scope of restrictions are absent, so unrestricted contractual freedom is not established.
Predictability—
Five consecutive annual periods are required for predictability; the accepted history is incomplete.
Financial strength35
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 43.57
- netDebtEbitGrade
- 38.18
- interestCoverageGrade
- 41.95
- currentRatioGrade
- 16.66
- Debt / FCF (x)
- 4.95
- Net debt / operating income (x)
- 3.09
- Interest coverage (x)
- 5.61
- Current ratio (x)
- 0.96
Capital allocation—
Missing required inputs: operatingReturn, dilution. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average SBC / revenue (%)
- 1.25
- cashConversionGrade
- 100.00
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · 2025 operating cash flow of $2.2 billion funded $0.5 billion of capital expenditures, and first-half 2026 operating cash flow improved. Asset impairments, substantial restructuring charges, dividends and continued equity issuance make the record mixed. Repurchase restrictions limit dilution offsets; investment returns and full leverage coverage are missing.
incentive alignment · 2/4 · Actual 2025 incentive payouts incorporated corporate and individual performance, with recovery policies and ownership guidelines. These support alignment, but individual discretion, adjusted metrics and missing executive ownership and long-term award outcomes prevent a stronger assessment.
execution · 2/4 · Completed restructuring actions, improved cash generation and second-quarter organic growth demonstrate progress. The 2025 sales and income threshold misses, restructuring cost and subsequent operating-income pressure make execution mixed. This assessment uses operating outcomes rather than management reputation.
governance · 2/4 · Independent leadership and committees, annual elections, a single voting class and an unqualified internal-control opinion support governance. The disclosed restatement requiring a compensation-recovery analysis tempers the assessment; its cause and recovery outcome are not supplied.
Evidence
Built on more than a century of heritage and trusted by generations, our differentiated portfolio of iconic brands—including Aveeno®, BAND-AID® Brand, Johnson’s®, Listerine®, Neutrogena®, Nicorette®, Tylenol®, and Zyrtec®—is backed by science and recommended by healthcare professionals, which further reinforces our consumers’ connections to our brands.
MD&A—Company Overview: brand heritage, trust and professional recommendations · Filed 20/02/2026
December 29, 2024 Reported Net Sales Change Impact of Foreign Currency Acquisitions and Divestitures Organic Sales Change Total Organic Sales Change Price/Mix(1) Volume Self Care (2.3) % 0.7 % — % (3.0) % 0.4 % (3.4) % Skin Health and Beauty (3.0) — (0.3) (2.7) (0.9) (1.8) Essential Health (1.2) (0.5) — (0.7) 0.5 (1.2) Total (2.1) % 0.2 % (0.1) % (2.2) % 0.1 % (2.3) % (1) Also referred to as value realization.
MD&A—2025 organic sales reconciliation by segment · Filed 20/02/2026
Fiscal Twelve Months Ended Change in Fiscal Year December 28, 2025 December 29, 2024 Change 2024 to 2025 (Dollars in Millions) Amount Percent Amount Percent Amount Percent Segment Net Sales Self Care $ 6,378 42.2 % $ 6,527 42.3 % $ (149) (2.3) % Skin Health and Beauty 4,114 27.2 4,240 27.4 (126) (3.0) Essential Health 4,632 30.6 4,688 30.3 (56) (1.2) Segment net sales $ 15,124 100.0 % $ 15,455 100.0 % $ (331) (2.1) % Self Care $ 2,109 $ 2,173 $ (64) (2.9) % Skin Health and Beauty 477 607 (130) (21.4) Essential Health 1,176 1,162 14 1.2 Segment adjusted operating income(1) $ 3,762 $ 3,942 $ (180) (4.6) % (1) Refer to the table above for the reconciliation of Segment adjusted operating income to Operating income and Income before taxes in the Consolidated Financial Statements.
MD&A—2025 segment net sales and adjusted operating income · Filed 20/02/2026
June 29, 2025(1) Reported Net Sales Change Impact of Foreign Currency Organic Sales Change Total Organic Sales Change Price/Mix(2) Volume Self Care 2.2 % 1.6 % 0.6 % 1.2 % (0.6) % Skin Health and Beauty 5.1 1.4 3.7 2.7 1.0 Essential Health 2.3 1.2 1.1 (0.8) 1.9 Total 3.0 % 1.4 % 1.6 % 0.9 % 0.7 % (1) Acquisitions and divestitures did not impact Net sales for the fiscal three months ended June 28, 2026 or June 29, 2025.
MD&A—Second-quarter 2026 organic sales, price/mix and volume · Filed 06/08/2026
Favorable value realization was primarily attributable to new pricing actions in EMEA and prior fiscal year carry-over pricing actions in North America.
MD&A—Self Care realized pricing actions · Filed 06/08/2026
During 2023, 2024 and 2025, we partially offset the impact of prior inflationary increases, as well as tariffs, through price increases, in addition to continued supply chain optimization initiatives.
Risk Factors—Historical partial inflation and tariff offsets through pricing and supply-chain initiatives · Filed 20/02/2026
Volume-related increases were partially offset by decreases in Oral Care largely attributable to competitive pressures.
MD&A—Oral Care volume decreases attributable to competitive pressures · Filed 06/08/2026
Unfavorable value realization was primarily attributable to increased strategic price investments, partially offset by new pricing actions in Latin America and Asia Pacific.
MD&A—Essential Health unfavorable value realization and strategic price investments · Filed 06/08/2026
The decrease was primarily driven by higher expenses related to brand support, net input cost inflation, unfavorable changes in foreign currency exchange rates, and the impact of tariffs imposed on goods imported into the United States, partially offset by favorable value realization and the benefits associated with our supply chain optimization initiatives.
MD&A—Self Care operating-income drivers and cost pressures · Filed 06/08/2026
We compete with companies of all sizes on the basis of numerous factors, including cost-effectiveness; product performance; real or perceived product advantages; intellectual property rights; advertising and promotional activities; implementation of digital and omnichannel strategies; adoption of technological advancements; sponsorship initiatives; brand recognition and loyalty; consumer convenience; pricing; and geographic reach.
Risk Factors—Bases of competition · Filed 20/02/2026
Fiscal Three Months Ended Change in Fiscal Period June 28, 2026 June 29, 2025 Change 2025 to 2026 (Dollars in Millions) Amount Percent Amount Percent Amount Percent Segment Net Sales Self Care $ 1,589 40.2 % $ 1,555 40.5 % $ 34 2.2 % Skin Health and Beauty 1,113 28.1 1,059 27.6 54 5.1 Essential Health 1,253 31.7 1,225 31.9 28 2.3 Segment net sales $ 3,955 100.0 % $ 3,839 100.0 % $ 116 3.0 % Self Care $ 512 $ 527 $ (15) (2.8) % Skin Health and Beauty 186 149 37 24.8 Essential Health 315 351 (36) (10.3) Segment adjusted operating income(1) $ 1,013 $ 1,027 $ (14) (1.4) % (1) Refer to the table above for the reconciliation of Segment adjusted operating income to Operating income and Income before taxes in the Condensed Consolidated Financial Statements.
MD&A—Second-quarter 2026 segment sales and adjusted operating income · Filed 06/08/2026
Liquidity and Capital Resources Cash Flows Summarized cash flow information for the fiscal six months ended June 28, 2026 and June 29, 2025 were as follows: Change in Fiscal Period Fiscal Six Months Ended Change 2025 to 2026 (Dollars in Millions) June 28, 2026 June 29, 2025 Amount Percent Net income $ 930 $ 742 $ 188 25.3 % Net changes in assets and liabilities $ (153) $ (58) $ (95) * Net cash flows from operating activities $ 1,177 $ 1,049 $ 128 12.2 % Net cash flows used in investing activities $ (245) $ (257) $ 12 (4.7) % Net cash flows used in financing activities $ (882) $ (858) $ (24) 2.8 % * Calculation not meaningful.
Liquidity and Capital Resources—First-half 2026 cash flows · Filed 06/08/2026
December 29, 2024 (Unaudited) Reported Net Sales Change Impact of Foreign Currency Acquisition and Divestitures Organic Sales Change Total (2.1)% 0.2% (0.1)% (2.2)% Fiscal Twelve Months Ended December 28, 2025 (Unaudited; Dollars in Millions) As Reported Adjustments Reference As Adjusted Net sales $15,124 — $15,124 Gross profit $8,792 320 (a) $9,112 Gross profit margin 58.1% 60.2% Operating income $2,414 759 (a)-(d) $3,173 Operating income margin 16.0% 21.0% Net income $1,470 606 (a)-(e) $2,076 Detail of Adjustments Cost of sales SG&A/ restructuring expenses Impairment charges Other operating (income) expense, net Provision for taxes Total Amortization of intangible assets $257 $— $— $— $— $257 Restructuring expenses — 290 — — — 290 Operating model optimization initiatives 36 9 — — — 45 Separation-related costs (including conversion of stock-based awards and Founder Shares) 27 75 — — — 102 Pending Transaction Costs — 25 — — — 25 Impairment Charges — — 23 — — 23 Impact of Deferred Markets—minority interest expense — — — 14 — 14 Impact of Deferred Markets—provision for taxes — — — 20 (20) — Gain on Skillman held for sale asset — — — (17) — (17) Tax impact on special item adjustments — — — — (133) (133) Total $320 $399 $23 $17 $(153) $606 (a) (b) (c) (d) (e) 84 2026 Proxy Statement Appendix - Non-GAAP Financial Measures (Unaudited) Fiscal Twelve Months Ended December 28, 2025 Diluted earnings per share $0.76 Adjustments: Separation-related costs 0.05 Conversion of stock-based awards — Restructuring and operating model optimization initiatives 0.17 Impairment charges 0.01 Amortization of intangible assets 0.13 Losses on investments — Pending Transaction costs 0.01 Gain on Skillman held for sale asset (0.01) Tax impact on special item adjustments (0.07) Other 0.03 Adjusted diluted earnings per share (non-GAAP) $1.08 (Unaudited; Dollars in Billions) Fiscal Twelve Months Ended December 28, 2025 Net cash flows from operating activities $2.2 Purchases of property, plant, and equipment (0.5) Free cash flow (non-GAAP) $1.7 2026 Proxy Statement
Appendix—2025 financial reconciliations, capital expenditures and free cash flow · Filed 08/04/2026
Impairment charges for the fiscal twelve months ended December 29, 2024 includes $488 million recognized in relation to Dr.Ci:Labo® long-lived assets, $68 million recognized on the held for sale asset associated with the Company’s former corporate headquarters in Skillman, New Jersey, and $22 million recognized on certain software development assets.
Financial statement notes—2024 asset impairment charges · Filed 20/02/2026
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited; Dollars in Millions, Except Per Share Data; Shares in Thousands) Fiscal Three Months Ended June 28, 2026 Common Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Equity Shares Amount Shares Amount March 29, 2026 1,919,935 $ 19 $ 16,362 20,387 $ (439) $ (128) $ (5,206) $ 10,608 Net income — — — — — 456 — 456 Other comprehensive loss — — — — — — (148) (148) Cash dividends on common stock ($0.2075 per share) — — — — — (398) — (398) Stock-based compensation — — 32 — — — — 32 Issuance of common stock under the Kenvue 2023 Plan, net 306 — 3 — — — — 3 June 28, 2026 1,920,241 $ 19 $ 16,397 20,387 $ (439) $ (70) $ (5,354) $ 10,553 Fiscal Three Months Ended June 29, 2025 Common Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Equity Shares Amount Shares Amount March 30, 2025 1,918,859 $ 19 $ 16,201 14,208 $ (305) $ (163) $ (5,699) $ 10,053 Net income — — — — — 420 — 420 Other comprehensive income — — — — — — 627 627 Cash dividends on common stock ($0.205 per share) — — — — — (393) — (393) Stock-based compensation — — 37 — — — — 37 Issuance of common stock under the Kenvue 2023 Plan, net 2,644 — 50 — — — — 50 Purchase of treasury stock (2,666) — — 2,666 (64) — — (64) June 29, 2025 1,918,837 $ 19 $ 16,288 16,874 $ (369) $ (136) $ (5,072) $ 10,730 Fiscal Six Months Ended June 28, 2026 Common Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Equity Shares Amount Shares Amount December 28, 2025 1,916,115 $ 19 $ 16,348 20,387 $ (439) $ (204) $ (4,959) $ 10,765 Net income — — — — — 930 — 930 Other comprehensive loss — — — — — — (395) (395) Cash dividends on common stock ($0.415 per share) — — — — — (796) — (796) Stock-based compensation — — 61 — — — — 61 Issuance of common stock under the Kenvue 2023 Plan, net 4,126 — (12) — — — — (12) June 28, 2026 1,920,241 $ 19 $ 16,397 20,387 $ (439) $ (70) $ (5,354) $ 10,553 8 Fiscal Six Months Ended June 29, 2025 Common Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Equity Shares Amount Shares Amount December 29, 2024 1,913,768 $ 19 $ 16,130 11,208 $ (242) $ (93) $ (6,146) $ 9,668 Net income — — — — — 742 — 742 Other comprehensive income — — — — — — 1,074 1,074 Cash dividends on common stock ($0.41 per share) — — — — — (785) — (785) Stock-based compensation — — 81 — — — — 81 Issuance of common stock under the Kenvue 2023 Plan, net 10,735 — 77 — — — — 77 Purchase of treasury stock (5,666) — — 5,666 (127) — — (127) June 29, 2025 1,918,837 $ 19 $ 16,288 16,874 $ (369) $ (136) $ (5,072) $ 10,730 See accompanying Notes to Condensed Consolidated Financial Statements.
Statements of Stockholders’ Equity—Dividends, stock compensation and share issuance · Filed 06/08/2026
In accordance with the terms of the Merger Agreement, and subject to the exceptions therein, we are not permitted to repurchase, redeem, or otherwise acquire any of our equity interests without the prior written consent of K-C.
Share repurchases—Merger agreement restrictions · Filed 06/08/2026
Payouts under the 2025 annual incentive plan were based on actual achievement of corporate financial goals, referred to as the “Kenvue Performance Factor” (70% weighting), and individual performance goals, referred to as the “Individual Compensation Factor” (30% weighting), each of which are described below.
Executive Compensation—Actual 2025 incentive payout methodology · Filed 08/04/2026
Incentive Compensation Recovery Policy Compensation Recoupment Policy for Significant Misconduct Covered Employees •Section 16 officers •Section 16 officers •The top approximately 1,300 employees of Kenvue and its subsidiaries, who have been determined to be in a position where significant misconduct would harm Kenvue Covered Compensation •Incentive compensation in excess of what would have been paid based on the restated financials •All incentive compensation, which includes annual- and long-term incentives awarded (both time-based and performance based), granted or paid, over a defined three-year period Triggering Events •Financial restatements •Significant misconduct, regardless of whether a restatement is involved •This includes commission of an act of fraud, embezzlement, gross negligence, self-dealing, or intentional misconduct; violations of law or a commission of an act involving moral turpitude; or violation of a material company policy Kenvue CHCC Authority •Administering the policy •Determining the method of recoupment •Administering the policy •Determining whether to pursue a recoupment •In the event of a recoupment, determining both the amount to recoup and the method of recoupment In addition, our equity award agreements provide for forfeiture and/or recoupment of all or a portion of the equity award if the employee fails to comply with any non-competition and/or non-solicitation agreements with Kenvue.
Executive Compensation—Incentive recovery and misconduct recoupment policies · Filed 08/04/2026
•Independent Board Chair with significant responsibilities •All independent directors, other than the CEO •Five new independent directors joined the Board since the 2024 Annual Meeting of Shareholders •Balanced Board with a large breadth of skills, experiences, and areas of expertise •Independent Committees with only independent directors serving on our Audit, Compensation & Human Capital, and Nominating, Governance & Sustainability Committees •Independent Executive Sessions with only independent directors at every regularly scheduled Board and Committee meeting Robust Board & Committee Oversight •Rigorous oversight of the development and execution of the Company’s strategic plans, including comprehensive review of strategic alternatives •Robust Board and Committee process for overseeing key enterprise risks, including cybersecurity-related risks •Strong Board and management succession planning process •Robust Board and Committee oversight of our sustainability strategy, policies, programs, and commitments Shareholder Rights & Engagement •Annual elections of all directors (no staggered board) •Simple majority voting standard for all uncontested elections •Single voting class •Active, year-round shareholder engagement Strong Governance Practices •Annual Board & Committee evaluations •Robust director and executive officer Code of Business Conduct & Ethics •Restrictions on overboarding •Mandatory retirement policy for directors •Significant stock ownership guidelines for directors (5x annual cash retainer) •Policy of no hedging, pledging, or short-selling Kenvue stock for executives and directors 2026 Proxy Statement 7 Proxy Statement Summary Executive Compensation Highlights (page 40) Kenvue’s executive compensation program is designed to align behaviors with short- and long-term financial and operational results that drive long-term shareholder value.
Proxy Statement Summary—Governance practices, shareholder rights and ownership guidelines · Filed 08/04/2026
These headwinds negatively impacted our 2025 Organic net sales and Adjusted Net Income results, which fell short of our annual incentive plan thresholds.
Executive Compensation—2025 results below incentive thresholds · Filed 08/04/2026
As of the end of fiscal year 2025, the Company completed all actions under the 2024 Multi-Year Restructuring Initiative, and no additional costs will be incurred.
Restructuring—Completion of 2024 initiative actions · Filed 06/08/2026
The 2024 Multi-Year Restructuring Initiative resulted in pre-tax restructuring expenses and other charges totaling $556 million through the fiscal twelve months ended December 28, 2025.
Restructuring—Cumulative expenses and other charges · Filed 06/08/2026
PricewaterhouseCoopers LLP, an independent registered public accounting firm, audited the effectiveness of the Company’s internal control over financial reporting as of December 28, 2025 and issued an unqualified opinion thereon as stated in their report, which appears under Part II, Item 8, “Financial Statements and Supplementary Data—Report of Independent Registered Public Accounting Firm.”
Controls and Procedures—Unqualified independent opinion on internal controls · Filed 20/02/2026
☑ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Form 10-K cover—Restatements requiring incentive-compensation recovery analysis · Filed 20/02/2026
The Pending Transaction is expected to close in the fourth quarter of 2026 and is conditioned on the satisfaction or waiver of other customary closing conditions, including the receipt of a number of foreign regulatory approvals.
Pending Transaction—Expected closing and outstanding conditions · Filed 06/08/2026
48 2026 Proxy Statement Executive Compensation 2025 Financial Results Our 2025 financial results were impacted by trade inventory reduction, driven by retailer inventory management in the United States, reduced shipments in China and lower seasonal incidences impacting Allergy Care, pediatric Pain Care, and Cough and Cold.
Executive Compensation—Inventory, shipment and seasonal drivers of 2025 weakness · Filed 08/04/2026
