(Reuters) -Kenvue reported third-quarter sales slightly below Wall Street expectations on Thursday, hurt by weak sales of its skin health and beauty brands including Neutrogena, a trend that has attracted criticism from activist hedge fund, Starboard Value.
Kenvue said it now expects annual net sales to grow closer to the lower end of its forecast of 1% to 3% growth.
The consumer products company has struggled with an underperforming skin health and beauty segment, while its self-care brands such as Tylenol and Benadryl have grown.
Shares have risen 4.5% so far this year and were trading flat at $22.61 during premarket hours.
After Starboard built a sizable stake in Kenvue, the activist hedge fund said there was an opportunity to improve revenue growth for the company’s beauty and skin health products, which were weighing on its stock.
Kenvue is focusing on improving sales through increased marketing spend and in-store presence of its skincare products.
But sales in the segment fell 4.2% to $1.07 billion in the third quarter ended Sept. 29, missing analysts’ estimate of $1.10 billion, according to data compiled by LSEG.
Total revenue fell slightly, to $3.90 billion, below analysts’ estimate of $3.93 billion, helped by strong sales of its self-care products.
On an adjusted basis, the company reported a profit of 28 cents per share, compared with analysts’ estimate of 27 cents per share.
It reaffirmed its annual per share profit forecast of between $1.10 and $1.20. Analysts were expecting a profit of $1.14 per share.
(Reporting by Mariam Sunny and Bhanvi Satija in Bengaluru; Editing by Pooja Desai)
