Consumer health business Kenvue has attributed its “healthy quarter” to the strength of its “iconic brands”.
Kenvue is the spun-off former consumer health division of Johnson & Johnson. It owns brands including Listerine, Neutrogena and Band-Aid. It first became a fully independent company in August and is now the world’s largest pure-play consumer health company by revenue.
The business reported it saw “a softer than anticipated” start to the cold and flu season, which normally fuels its brands such as Sudafed and Benadryl at this time of year. Despite slow sales in this segment, Kenvue hailed its third quarter as “healthy”.
Its net sales grew by 3.3% in its third quarter versus the same period last year to $3.92bn (£3.24bn). It did see volume decline of 3.5%, which it attributed mainly to the impact of its Chinese business as well as “portfolio rationalisation”. The company’s value realisation grew by 7.1%. It defines value realisation as increased prices and changes to its product mix.
“Our results demonstrate consumers’ affinity to our brands,” said chief executive officer Thibaut Mongon, while acknowledging that Kenvue’s performance “in certain pockets of [its] portfolio is not where [it] would like it to be”.
While the company’s slow sales in its cold and flu products dragged its performance down, it saw stronger performance in its self-care portfolio, which includes the like of Nicorette and Imodium. This section of the business saw volume growth of 1.2% in the quarter. Reported net sales overall grew by 6.4%.
The strong growth in this segment was attributed to it making share gains as a result of “successful brand activation”. Innovation in brands such as stop-smoking brand Nicorette was also flagged.
In the future, the company’s strategy is to “successfully extend the reach of [its] iconic brands to deliver sustainable growth”, Mongon said. It will do this by continuing to introduce innovations to “address unmet consumer health needs” across its portfolio.
He added that introducing innovation, such as the Hydro Boost moisturising gel face cream it introduced on the Neutrogena brand in Germany, creates a “halo effect” for the entire brand, not just boosting the new product itself.
The company has committed to continuing to invest in marketing behind its brands, with it identifying this as a crucial lever of growth.
Despite leadership declaring this a “healthy” quarter, Kenvue has downgraded its expectations for its sales and earnings in the full year. Previously, it had expected its year-over-year sales growth to be in the range of 4.5% to 5.5%, it now expects it to be between 4% to 4.5%.
This contrasts with rival consumer health business Haleon, which upgraded its net revenue growth expectations at its half-year results in August. Haleon now expects organic revenue growth to be between 7% to 8%, versus between 4% to 6% forecast previously.
Like Kenvue, Haleon was formerly a part of a large pharmaceutical company, before being spun-off into a specialist consumer health business. Haleon became an independent company from GSK back in July 2022.