By Svea Herbst-Bayliss
(Reuters) -Hedge fund Starboard Value called consumer products company Kenvue (NYSE:) a bargain and said its skin health and beauty segment’s lackluster growth is the reason for the stock’s underperformance.
Starboard Chief Investment Officer Jeffrey Smith said there is an opportunity to improve revenue growth and margins at the segment which has the Neutrogena and Aveeno brands.
“They need to focus on skin health beauty,” Smith said, joking “this sounds simple, right? Now they just have to do it.”
Kenvue has attributed the lackluster performance of its skin-health brands primarily to missteps around the placement of its products in stores.
In the second quarter, Kenvue’s skin health business, which also houses brands such as Clean & Clear, was the worst performer among its three segments, recording a nearly 4% decline in sales to $1.10 billion and missing Wall Street estimates.
In August, the company said it will increase marketing spend and improve its brands’ in-store presence, among other measures to boost sales.
Starboard has built a sizable stake in the consumer products company that makes Band-Aid, Listerine, and Tylenol. Kenvue went public last year and is worth roughly $44 billion.
Kenvue, previously a part of Johnson & Johnson (NYSE:), has seen its stock price fall 18% since the company was listed publicly in May 2023. It closed trading at $22.92 per share on Monday.
Smith was speaking at the 13D Monitor Active-Passive Investor Summit.
The company’s shares were marginally higher on Tuesday.
