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Kenvue (KVUE +1%) is ticking higher following a flurry of announcements this morning. The company, which provides consumer health products across self-care and essential health categories (Tylenol, Band-Aid, Neutrogena, Listerine etc.), announced a CEO transition, a review of strategic actions, and issued Q2 guidance. With activist shareholders taking interest, six consecutive quarters of yr/yr revenue decline, a new CFO appointed in May, and now a new CEO, KVUE appears to be taking steps to turn things around.

• CEO Thibaut Mongon stepped down while the company searches for a permanent replacement. Combined with the appointment of a new CFO in May, these leadership changes suggest growing urgency around reshaping the company's direction after six consecutive quarters of yr/yr revenue declines.
• KVUE also announced that its strategic review committee is evaluating a range of potential actions, including optimizing its brand portfolio and improving execution. We think a key focus could be its skin health and beauty segment, which was its weakest segment in Q1. Organic sales of the segment declined 4.8%.
• There have been recent reports from CNBC and Reuters that the board is listening to activists calling for change. In particular, Reuters reported in early June that KVUE is exploring the sale of some of its skin health and beauty brands. With its Q2 earnings call scheduled for August 7, investors will likely focus on any updates regarding that segment.
• Notably, KVUE issued Q2 guidance this morning, which it doesn't typically provide. The company expects a 4% decline in revenue, which would mark its seventh consecutive quarter of yr/yr contraction. Additionally, it announced it would revise its FY25 outlook, potentially adding some uncertainty for investors.

Overall, KVUE has delivered underwhelming financial performance after being spun off from Johnson & Johnson (JNJ) in August 2023. We think there are some cross currents here. Investors are pleased to see a new CEO and the review of its portfolio. However, Q2 top line guidance was a bit light and the comments about FY25 are perhaps making investors a little nervous. It's possible KVUE may wait until it has a new CEO in place before making decisions on its portfolio. As such, there is a bit of a cloud over the stock until investors know who the new CEO will be and what decisions will be made on its portfolio.