Kenvue Inc. Q4 FY2023 earnings call

• 2023 was transformational, with 5% organic growth across segments, regions, and categories, and initiation of dividend program.
• 2024 priorities:
  • Reach more consumers with focus on 15 priority brands, strengthening brand experiences, driving innovation, and improving in-store execution.
  • Free up resources by accelerating gross margin expansion, exiting transition services agreements, and implementing modern systems for better demand forecasting.
  • Foster a culture with new performance management plan, clear goals, and accountability for Kenvuers.

Self Care: 2023 organic growth of 8.4%, largest segment, with Adult Tylenol gaining share and innovation contributing. Essential Health: 3.6% organic growth, led by oral care and women's health, Listerine gum therapy successful. Skin Health and Beauty: 1.8% organic growth in 2023, disappointing Q4 due to US in-store execution issues; EMEA and Latin America strong, China weak; focus on improving in-store presence, consumer engagement, and innovation in US.

• 2024 organic growth expected in range of 2% to 4%, Q1 organic growth flat.
• Gross margin expected closer to 2021 levels.
• Adjusted EPS range $1.10 to $1.20.
• Marketing spend to increase ~15% to fuel brand growth.

• Uncertain macroeconomic conditions impacting consumer confidence.
• Geopolitical issues affecting business operations.
• Continued softness in China for Skin Health and Beauty.
• In-store execution challenges in US Skin Health and Beauty.

Q: On top line and organic forecast, A: Guidance reflects sequential improvement, but faces headwinds like China softness and Skin execution issues, yet confident in plans.

Q: On Q4 Skin Health and Beauty volume weakness, A: US underperformance due to execution issues, focus on enhancing in-store presence, consumer engagement, and innovation.

Q: On gross margin cadence, A: TSA savings phased, investment in marketing, gross margin to improve with value realization and efficiencies.

Q: On acetaminophen lawsuit, A: No update, going through dismissal process.