Feb 17 - Kenvue, the maker of Tylenol and other consumer health brands, reported fourth-quarter results that topped analyst expectations and revealed plans to trim its global workforce as it moves forward with a proposed takeover by Kimberly-Clark.
The company said its board approved an operating-model optimization that will produce a net reduction of roughly 3.5% of its global employee base. Kenvue had about 22,000 employees as of last year; the company did not provide further details on the timing or geographic distribution of the reductions.
The workforce move accompanies financial results that the company described as a turnaround, with strength noted particularly in its self-care and essential health segments. "We ended 2025 with stronger top- and bottom-line performance in the fourth quarter, which reflected both disciplined execution against our strategic priorities, as well as a more favorable year-ago comparison on sales," said CEO Kirk Perry.
Segment-level performance drove the better-than-expected quarter. Kenvue's largest segment, self-care - which includes Tylenol and Benadryl - posted net sales of $1.59 billion, a 1.5% increase year-over-year. That figure exceeded the $1.52 billion estimate compiled by LSEG. The company also noted that consumption and market-share trends for Tylenol improved in December.
Its essential health unit, home to brands such as Listerine and Band-Aid, generated net sales of $1.15 billion in the quarter, up 6.1% from the prior year and ahead of analysts' average expectations of $1.12 billion. Consolidated fourth-quarter net sales rose 3.2% to $3.78 billion, outpacing the consensus estimate of $3.68 billion.
On the bottom line, Kenvue reported an adjusted quarterly profit of $0.27 per share, compared with analyst estimates of $0.22 per share. The company linked the forthcoming workforce reductions to an operating-model optimization tied to its strategic plan.
Kenvue said the planned job cuts will lead to pre-tax restructuring expenses and other charges totaling about $250 million in 2026. The company did not provide a detailed schedule for recognizing those charges beyond the 2026 estimate.
The moves come as Kimberly-Clark, the maker of Kleenex, proposed in early November to acquire Kenvue for more than $40 billion, aiming to build a global consumer health company combining well-known brands such as Band-Aid and Huggies diapers. The proposed merger is expected to close in the second half of 2026, according to the companies' timeline.
Investors and market participants will likely watch execution of the operating-model changes, the timing of restructuring charges, and consumer trends in key categories such as self-care and essential health as the companies progress toward the planned transaction.
Key points
- Kenvue beat fourth-quarter sales and earnings estimates, driven by self-care and essential health segments.
- The company approved a global workforce reduction of about 3.5% and expects roughly $250 million of pre-tax restructuring and other charges in 2026.
- The announced changes occur as Kimberly-Clark seeks to acquire Kenvue in a transaction valued at more than $40 billion, targeted to close in the second half of 2026.
Risks and uncertainties
- Execution risk around the operating-model optimization and associated workforce reductions, including the timing and realization of cost savings - impacting consumer health and labor markets.
- Recognition and magnitude of the approximately $250 million of pre-tax restructuring expenses and other charges in 2026 could affect reported profitability in that year - impacting corporate earnings and investor expectations.
- Progress and timing of the proposed Kimberly-Clark acquisition - the completion is expected in the second half of 2026 but remains contingent on closing conditions.