5 Spin-off Companies in 2023

4. Kenvue Inc. (NYSE:KVUE)

Number of Hedge Fund Holders: 31

Kenvue Inc. (NYSE:KVUE) was perhaps one of the biggest spinoffs of 2023. Johnson & Johnson (NYSE:JNJ)’s unit, which is now publicly trading, raised $3.8 billion through the largest US initial public offering since 2021.

During the second quarter earnings call Kenvue Inc. (NYSE:KVUE)’s management talked about the state of business and also discussed guidance:

“Further, our first half 2023 results benefited from a couple of one-time-in-nature dynamics that we would not expect to continue in the second half. First, our Q1 results were supported by higher-than-normal inventory replenishment, primarily in Self Care and Skin Health and Beauty. This was a result of our retail customers exiting Q4 with lower-than-average inventory levels, generating outsized orders during the quarter as they looked to restock. Second. Globally, there has been an exceptionally strong cold, cough and flu season throughout the first half of the year. While we will be operationally ready for any level of seasonal demand, our outlook contemplates more normal incident rate levels this coming winter. With regards to interest, we expect reported net interest expense to be approximately $270 million and approximately $300 million on an adjusted basis.

Moving to taxes. With regards to the full year, we expect a reported effective tax rate of 34.5% to 35.5%. On an adjusted basis, we expect the range to be between 24.5% and 25.5%. The higher rate versus prior year is primarily driven by jurisdictional mix of earnings and less favorable discrete benefits in 2023 as compared to 2022. On the bottom line, we expect full year adjusted diluted EPS to be in the range of $1.26 to $1.31. This range assumes a full year 2023 weighted average share count of 1.855 billion shares. As we look to the back half, we continue to operate in a challenging environment with ongoing pressures from labor costs, raw materials, packaging and foreign exchange volatility. While our guidance reflects a variety of scenarios, we remain focused on the things that we can control and will utilize the levers within our operating model to mitigate these headwinds.”

Read the full earnings call transcript here.