Kenvue Inc. stock research
FY2023 Q3
Kenvue (KVUE) Gross Margin — Quarter Ended Oct 1, 2023
Revenue decreased while gross profit increased, as cost of revenue declined more than proportionally, resulting in an improved gross margin. Compared with the same quarter one year earlier, revenue and gross profit were both higher, but gross margin was lower because cost of revenue grew at a faster rate than revenue.
Gross margin takeaway
Quarter ended Oct 1, 2023 · FY2023 Q3
Revenue decreased while gross profit increased, as cost of revenue declined more than proportionally, resulting in an improved gross margin. Compared with the same quarter one year earlier, revenue and gross profit were both higher, but gross margin was lower because cost of revenue grew at a faster rate than revenue.
- The strongest observable margin driver is the decline in cost of revenue relative to revenue, which lifted gross margin sequentially. This improvement occurred even as revenue fell, indicating that cost control was the primary factor.
- Compared with the immediately preceding quarter, gross margin improved as cost of revenue fell more sharply than revenue. Versus the same quarter one year earlier, gross margin weakened because cost of revenue increased at a faster pace than revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
57.5%
Gross profit
$2.3B
Revenue
$3.9B
Cost of revenue
$1.7B
Quarter-over-quarter change
+2.0 pts
Year-over-year change
+1.4 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Apr 2, 2023 | $3.9B | $2.1B | $1.7B | 55.2% |
| Jul 2, 2023 | $4.0B | $2.2B | $1.8B | 55.5% |
| Oct 1, 2023 | $3.9B | $2.3B | $1.7B | 57.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 2, 2023
+2.0 pts
Year-over-year change
Oct 2, 2022
+1.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the decline in cost of revenue relative to revenue, which lifted gross margin sequentially. This improvement occurred even as revenue fell, indicating that cost control was the primary factor.
Compared with the immediately preceding quarter, gross margin improved as cost of revenue fell more sharply than revenue. Versus the same quarter one year earlier, gross margin weakened because cost of revenue increased at a faster pace than revenue.
Monitor the trajectory of cost of revenue relative to revenue in upcoming quarters to assess whether the sequential margin improvement can be sustained.