Kenvue Dismisses CEO Thibaut Mongon as Strategic Review Advances

Kenvue, the consumer health company known for brands like Tylenol and Band-Aid, has announced the dismissal of its CEO, Thibaut Mongon, as part of a broader strategic review process. The decision, confirmed on July 14, 2023, is seen by many investors as a potential precursor to a sale of the company or its individual segments. The firm is actively exploring various strategic alternatives to enhance its market performance, which has faced increasing scrutiny from shareholders.

In the wake of Mongon’s removal, Kirk Perry, a current board member and former executive at Procter & Gamble, has been appointed as interim CEO. Perry brings extensive experience, having previously led the technology and data analytics company Circana. Analysts, including Susan Anderson from Canaccord Genuity, believe Perry’s leadership may increase the likelihood of a sale of part or all of Kenvue’s portfolio.

Following the announcement, Kenvue’s share price rose approximately 2.25 percent, recovering from initial declines as some investors liquidated their positions. The strategic review had been a long-awaited development for many stakeholders, particularly after activist investors, such as Third Point and Toms Capital, increased their stakes in the company earlier this year. Toms Capital has been vocal about pursuing a sale, indicating a significant shift in investor sentiment.

Kenvue, which was spun off from Johnson & Johnson in 2023, has faced challenges in boosting profitability, particularly in its skin health and beauty division, which includes recognized brands like Neutrogena and Aveeno. Following the departure of CFO Paul Ruh in May, the company is now under the guidance of newly appointed CFO Amit Banati from Kellanova.

Analyst Nik Modi from RBC Capital Markets noted that Mongon’s departure aligns with anticipated changes due to the company’s recent performance issues. Many investors anticipated that this shift in leadership could lead to significant brand divestitures, a possibility that Kenvue is actively considering.

The firm has established a strategic review committee, advised by investment bank Centerview Partners and consulting firm McKinsey, tasked with evaluating portfolio simplification and potential divestitures. Reports earlier this year indicated that Kenvue was already exploring the sale of certain non-core skin health and beauty brands.

Kenvue has projected an adjusted profit of between $0.28 and $0.29 per share for the second quarter, aligning with analyst estimates. The firm is set to release further financial details on August 7, 2023, along with forecasts for 2025.

As Kenvue navigates these significant changes, stakeholders will be closely monitoring the outcomes of the ongoing strategic review and the potential implications for the company’s future direction.