Skin and beauty drive growth in Kenvue’s Q1 results ahead of Kimberly-Clark deal
Key takeaways
- Kenvue reported strong Q1 2026 growth, with net sales up 4.5% and Skin Health and Beauty emerging as the strongest-performing segment.
- Innovation and e-commerce expansion drove growth across brands, including Neutrogena and OGX, while operational efficiencies improved margins and earnings.
- The company remains focused on transformation and cost optimization as its planned acquisition by Kimberly-Clark moves toward completion in the second half of 2026.
Kenvue has reported robust growth across sales, margins, and earnings in Q1 of 2026, with its Skin Health and Beauty division delivering the strongest performance as the company advances toward its planned acquisition by Kimberly-Clark.
Net sales increased 4.5% year-over-year to the fiscal quarter ending March 29, 2026, while organic sales rose 0.7%. Diluted earnings per share climbed 47% to US$0.25, and adjusted diluted EPS increased 33% to US$0.32.
“Our year is off to an encouraging start, as our continued efforts to strengthen the business and sharpen execution resulted in delivering net and organic sales growth for the second consecutive quarter, along with meaningful year-over-year improvement in gross margin, operating margin, and EPS,” says Kirk Perry, CEO of Kenvue.
The company attributes margin improvements to productivity gains from global supply chain optimization, favorable value realization, and cost reduction actions under its “Our Vue Forward” program and 2026 Restructuring Initiative. This drove a year-over-year reduction in selling, general, and administrative expenses.
Skin Health and Beauty leads performance
Kenvue’s Skin Health and Beauty business recorded net sales growth of 8.4%, with organic sales increasing by 5%. The company says the segment benefited from “strong demand across EMEA, Latin America, and Asia Pacific, alongside sequential improvement in North America.”
Skin Health and Beauty delivered the strongest performance, with net sales increasing 8.4% and organic sales up 5%.Growth was supported by innovation launches and e-commerce acceleration, including the expansion of Neutrogena into sun care categories across select EMEA markets and the launch of OGX Pro Growth in North America and EMEA.
Kenvue’s sun care performance in Latin America also contributed to results, supported by strong commercial execution on Neutrogena Sun products.
Gross profit margin increased to 58.9% from 58% in the prior-year quarter, while adjusted operating income margin expanded to 24% from 19.8%. According to the company, favorable pricing, productivity gains, and lower selling and administrative costs offset inflationary pressures, tariffs, and lower volumes.
Self Care hit by flu season
The Self Care segment reported net sales growth of 1.9%, although organic sales declined 2.3% due to weaker cold and flu seasons in major markets.
Kenvue’s smoking cessation brand Nicorette gained market share across EMEA and Asia Pacific. In the US, the company reported improving consumption trends and market share gains for Zyrtec and Tylenol.
The company highlighted Zyrtec’s partnership as the first Official Allergy Relief Sponsor of the PGA Tour as part of its integrated marketing strategy.
Meanwhile, Essential Health sales rose 4.9%, driven by Baby Care, Oral Care, and Wound Care. Kenvue also pointed to innovation activity for Listerine, including a global product restage and the rollout of alcohol-free mouthwash sachets.
Kimberly-Clark acquisition progresses
Kenvue confirmed that its pending acquisition by Kimberly-Clark remains on track for completion in the second half of 2026, pending foreign regulatory approvals and customary closing conditions.
The merger agreement was initially announced in November 2025, and shareholders from both companies approved the transaction earlier this year. The transaction is expected to close in the second half of 2026, subject to receipt of foreign regulatory approvals and satisfaction of other customary closing conditions as described in the merger agreement.
Kimberly-Clark announced it will buy Kenvue in a deal valued at US$48.7 billion. The two companies would combine brands such as Huggies and Kleenex with Band-Aid and Tylenol, generating an estimated net revenue of roughly US$32 billion in 2025.
The transaction brings together two major US companies, creating a combined portfolio of complementary products, including 10 billion-dollar brands.
The Kimberly-Clark transaction is expected to close in the second half of 2026, subject to approvals.
Perry adds: “We remain confident in our ability to navigate ongoing macro uncertainty, as we accelerate our organization and business transformation through our new strategic plans and work toward completing our value-creating combination with Kimberly-Clark in the second half of this year.”
Due to the pending acquisition, Kenvue says it will not provide forward-looking guidance.
The company also confirmed a 2026 restructuring initiative designed to optimize operations, transform its supply chain, and improve efficiency. The initiative is expected to result in approximately US$250 million in pre-tax restructuring expenses during fiscal year 2026.
In March, Kenvue and Olay presented research and derma-cosmetics innovations at the 2026 American Academy of Dermatology Annual Meeting (AAD) in Denver, Colorado (March 27–31). Kenvue showcased its findings and innovations from subsidiaries Neutrogena, Aveeno, and Rogaine in the healthy aging, skin hydration, UV protection, and acne segments.
