Newly Spun-Out Kenvue Betting on Brand and Product Innovation to Drive Growth

Newly Spun-Out Kenvue Betting on Brand and Product Innovation to Drive Growth

Kenvue CEO Thibaut Mongon has revealed that the company will focus on brand and product innovation to drive growth after it made its debut on the New York Stock Exchange. The company, spun out of Johnson & Johnson, boasts a portfolio of brands including Band-Aid, Tylenol, Listerine, Neutrogena, Aveeno, and J&J’s namesake baby powder. Ten of Kenvue’s brands made sales of approximately $400 million or more last year, according to a prospectus filed with the Securities and Exchange Commission. However, Mongon believes that the company’s portfolio of brands still has plenty of room to grow.

Kenvue’s plans for product innovation involve new science and technologies to develop new products that meet the specific needs of consumers in a way that hasn’t been done before. The company has a team of around 1,500 research and development professionals who identify new ways to enhance a given product. Mongon believes that product innovation ultimately makes Kenvue’s brands “more relevant than ever” to consumers as they better target their needs.

Kenvue has launched more than 100 new product innovations each year since 2020, according to the company’s prospectus. Product innovations launched during the last three years have accounted for around $1.5 billion of Kenvue’s net sales, the company said in its filing.

Kenvue will also use a “digital-first approach” to deliver more personalized experiences with the company’s brands, according to Mongon. This includes new e-commerce and direct-to-consumer services. The brand Zyrtec, for example, has its own allergy forecast app called “AllergyCast”. Mongon said Kenvue designed the app to help consumers manage their allergies, allowing them to track pollen levels and their allergy symptoms.

Kenvue also designed the “SmartCheck” digital ear scope under the brand Tylenol. SmartCheck is a personal ear scope device and app that turns a smartphone into an otoscope, which is used to look into ears. The app allows users to take a recording of a child’s potentially infected eardrum and send it to a healthcare provider or telehealth service for diagnosis.

Kenvue recorded total assets of more than $27 billion as of Jan. 1, on a pro forma basis, excluding the impact of the costs associated with the public offering, and total liabilities of roughly $16 billion. The company recorded total debt of around $9 billion as of the start of the year. Kenvue raked in $14.95 billion in sales for 2022 and a net income of $1.46 billion on a pro forma basis, according to the preliminary prospectus.

Mongon stated that Kenvue is primarily focused on organic growth but is not completely ruling out mergers and acquisitions in the future. However, the company’s focus is on identifying the right brands in the market that could complement the company’s portfolio in a positive way. If Kenvue sees an opportunity that makes sense strategically and financially, it will move thanks to the healthy balance sheets that the company has. Kenvue trades under the stock ticker “KVUE”.

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