The company is implementing a multi-year restructuring initiative, expecting $550 million in pre-tax restructuring expenses. The initiative includes workforce reductions, management structure changes, and transition to centralized shared-service functions. The company expects to realize $350 million in annualized pre-tax gross cost savings beginning in fiscal year 2026.

Organic sales declined by 1.2%, driven by decreases in Skin Health and Beauty in the United States due to competitive pressures and strategic price investments, and declines in Self Care outside the United States due to a weak season and destocking in China.

The report highlights that changes in both cost of sales and gross profit margin were primarily due to gains attributable to the realization of benefits associated with supply chain optimization initiatives.

During the fiscal three months ended March 30, 2025, the Company made a refinement to the methodology of its stock-based compensation expense allocations, indicating an ongoing effort to improve financial reporting accuracy.

The company notes that changes in global trade policies may adversely affect prevailing economic conditions and its business. They estimate a gross tariff exposure of approximately $150 million in fiscal year 2025.

The company is involved in various lawsuits and claims, including product liability, intellectual property, and tax matters. The ultimate outcome of legal proceedings is not expected to have a material adverse effect on the company's financial position, but the resolution of one or more matters in any reporting period may have a material adverse effect on the company's results of operations and cash flows.

Organic sales decline in Skin Health and Beauty was attributed to current fiscal year competitive pressures and strategic price investments in the United States.

The company began strategic initiatives intended to enhance organizational efficiencies and better position Kenvue for future growth. The 2024 Multi-Year Restructuring Initiative primarily includes global workforce reductions, changes in management structure, and the transition to centralized shared-service functions in lower-cost locations.

The 2024 Multi-Year Restructuring Initiative aims to improve the company's underlying information technology infrastructure, indicating a focus on technological capabilities and digital transformation.

The company repurchased 3,000,000 shares of common stock at an average price of $20.94 per share, with 12,792,000 shares remaining authorized for repurchase under the program. The intent of this repurchase program is to offset dilution from the vesting or exercise of equity-based awards.

Net cash flows used in investing activities were primarily driven by purchases of property, plant, and equipment in both the current and prior fiscal three-month periods, indicating ongoing investment in physical assets.

The company notes that macroeconomic developments, including changes in global trade policies, may adversely affect prevailing economic conditions and its business. They estimate a gross tariff exposure of approximately $150 million in fiscal year 2025.