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Pensions | 12 Months Ended
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Dec. 28, 2025
Retirement Benefits [Abstract] |
Pensions | Pensions In connection with the completion of the Separation, the Company converted all multiemployer pension plans to a multiple-employer pension plan or a single-employer pension plan. Single-Employer Plans The Company is the plan sponsor for certain defined benefit retirement plans (collectively, “the Plans”), and the Consolidated Financial Statements reflect the periodic benefit costs and funded status of such plans. The Company uses December 31 as the fiscal year-end measurement date for the Plans, which are located outside the United States. During the fiscal three months ended December 28, 2025, the trustees of the Consumer United Kingdom Pension Plan, a pension plan providing benefits to certain current and former employees in the United Kingdom (the “UK Pension Plan”), completed a full scheme buy-in transaction with a third-party insurance company. As part of the buy-in, previously held assets were liquidated and transferred to the insurance company in exchange for an annuity policy to mitigate future investment and longevity risk. The buy-in annuity policy remains an asset of the UK Pension Plan and is considered a Level 3 investment (as described below). The policy provides substantially all future benefit plan payments to the UK Pension Plan participants. However, the Company continues to retain the primary benefit obligation until a plan wind-up and buy-out is completed. Upon the completion of a buy-out, the Company would transfer full responsibility of the UK Pension Plan obligations to the insurance company, at which time the Company would derecognize the assets and liabilities of the UK Pension Plan and realize a settlement loss as a component of net periodic benefit cost. The Company intends to execute the buy-out conversion in fiscal year 2027. Net periodic benefit costs for the Plans sponsored by the Company for the fiscal twelve months ended December 28, 2025, December 29, 2024, and December 31, 2023 included the following components:
|  |  |  | Fiscal Twelve Months Ended
(Dollars in Millions) |  |  |  |  |  | December 28, 2025 |  | December 29, 2024 |  | December 31, 2023
Service cost |  |  |  |  |  | $ | 32 |  |  | $ | 30 |  |  | $ | 21 |
Interest cost |  |  |  |  |  | 28 |  |  | 28 |  |  | 26 |
Amortization of loss (gain) |  |  |  |  |  | 7 |  |  | 3 |  |  | (2) |
Special events(1) |  |  |  |  |  | 8 |  |  | 6 |  |  | 10 |
Expected return on plan assets |  |  |  |  |  | (35) |  |  | (34) |  |  | (25) |
Total net periodic benefit cost |  |  |  |  |  | $ | 40 |  |  | $ | 33 |  |  | $ | 30 |
(1) During the fiscal twelve months ended December 28, 2025 and December 29, 2024, the Company recognized settlement losses of $8 million and $6 million, respectively, associated with global workforce reductions in connection with the 2024 Multi-Year Restructuring Initiative (as defined in Note 19, “Restructuring Expenses and Operating Model Optimization Initiatives”). During the fiscal twelve months ended December 31, 2023, the Company converted a defined benefit plan to a defined contribution plan, which resulted in a settlement loss of $14 million, partially offset by a curtailment gain of $4 million. The service cost component of net periodic benefit cost is presented in the same financial statement line items in the Consolidated Statements of Operations where other employee compensation costs are reported, including Cost of sales and Selling, general, and administrative expenses. The special events component of net periodic benefit cost for the fiscal twelve months ended December 28, 2025 and December 29, 2024 is presented as part of Restructuring expenses in the Consolidated Statement of Operations. All other components of net periodic benefit cost are presented as part of Other expense, net in the Consolidated Statements of Operations. The following table provides the weighted-average actuarial assumptions related to the Plans sponsored by the Company for the fiscal twelve months ended December 28, 2025, December 29, 2024, and December 31, 2023:
|  |  |  |  |  | Fiscal Twelve Months Ended
|  |  |  |  |  | December 28, 2025 |  | December 29, 2024 |  | December 31, 2023
Net Periodic Benefit Cost |  |  |  |  |  |  |  |  |  |
Service cost discount rate |  |  |  |  |  | 2.5 | % |  | 2.6 | % |  | 3.4 | %
Interest cost discount rate |  |  |  |  |  | 3.7 | % |  | 3.6 | % |  | 4.6 | %
Rate of increase in compensation levels |  |  |  |  |  | 3.3 | % |  | 3.3 | % |  | 3.3 | %
Expected long-term rate of return on plan assets |  |  |  |  |  | 6.0 | % |  | 5.5 | % |  | 5.5 | %
Benefit Obligation |  |  |  |  |  |  |  |  |  |
Discount rate |  |  |  |  |  | 4.1 | % |  | 3.8 | % |  | 3.6 | %
Rate of increase in compensation tables |  |  |  |  |  | 3.3 | % |  | 3.3 | % |  | 3.3 | %
The Company’s discount rates are determined by considering current yield curves representing high-quality, long-term fixed income instruments. The resulting discount rates are consistent with the duration of plan liabilities. The Company’s methodology in determining service and interest cost uses duration-specific spot rates along that yield curve to the Plans’ liability cash flows. The expected rates of return on plan asset assumptions represent the Company’s assessment of long-term returns on diversified investment portfolios globally. The assessment is determined using projections from external financial sources, long-term historical averages, actual returns by asset class, and the various asset class allocations by market. The following table sets forth information related to the benefit obligation and the fair value of plan assets for the fiscal twelve months ended December 28, 2025 and December 29, 2024 for the Plans sponsored by the Company:
|  |  |  |  |  | Fiscal Twelve Months Ended
(Dollars in Millions) |  |  |  |  |  | December 28, 2025 |  | December 29, 2024
Change in Benefit Obligation |  |  |  |  |  |  |  |
Projected benefit obligation—beginning of fiscal year |  |  |  |  |  | $ | 786 |  |  | $ | 829 |
Service cost |  |  |  |  |  | 32 |  |  | 30 |
Interest cost |  |  |  |  |  | 28 |  |  | 28 |
Actuarial gain(1) |  |  |  |  |  | (26) |  |  | (39) |
Plan participants’ contributions |  |  |  |  |  | 7 |  |  | 6 |
Curtailments, settlements, and restructuring |  |  |  |  |  | (41) |  |  | (39) |
Benefits paid from plan assets |  |  |  |  |  | (18) |  |  | (15) |
Effect of exchange rates |  |  |  |  |  | 80 |  |  | (42) |
Other |  |  |  |  |  | (16) |  |  | 28 |
Projected benefit obligation—end of fiscal year |  |  |  |  |  | $ | 832 |  |  | $ | 786 |
Change in Plan Assets |  |  |  |  |  |  |  |
Plan assets at fair value—beginning of fiscal year |  |  |  |  |  | $ | 526 |  |  | $ | 535 |
Company contributions |  |  |  |  |  | 28 |  |  | 31 |
Plan participants’ contributions |  |  |  |  |  | 7 |  |  | 6 |
Benefits paid from plan assets |  |  |  |  |  | (18) |  |  | (15) |
Actual return on plan assets |  |  |  |  |  | 22 |  |  | 21 |
Curtailments, settlements, and restructuring |  |  |  |  |  | (41) |  |  | (29) |
Effect of exchange rates |  |  |  |  |  | 48 |  |  | (23) |
Plan assets at fair value—end of fiscal year |  |  |  |  |  | $ | 572 |  |  | $ | 526 |
Funded status—end of fiscal year |  |  |  |  |  | $ | (260) |  |  | $ | (260) |
Amounts recognized on the Consolidated Balance Sheets consist of the following: |  |  |  |  |  |  |  |
Other assets |  |  |  |  |  | $ | 86 |  |  | $ | 84 |
Accrued liabilities |  |  |  |  |  | (11) |  |  | (9) |
Employee-related obligations |  |  |  |  |  | (335) |  |  | (335) |
Total recognized on the Consolidated Balance Sheets—end of fiscal year |  |  |  |  |  | $ | (260) |  |  | $ | (260) |
Amounts recognized in Accumulated other comprehensive loss consist of the following: |  |  |  |  |  |  |  |
Net actuarial loss |  |  |  |  |  | $ | 159 |  |  | $ | 170 |
Prior service cost |  |  |  |  |  | (1) |  |  | (5) |
Total before tax effects |  |  |  |  |  | $ | 158 |  |  | $ | 165 |
Accumulated benefit obligations—end of fiscal year |  |  |  |  |  | $ | 746 |  |  | $ | 686 |
(1) The actuarial gain in the fiscal twelve months ended December 28, 2025 and December 29, 2024 were both primarily related to an increase in the discount rate. The amounts recognized in net periodic benefit cost and Other comprehensive income (loss) related to the Plans sponsored by the Company for the fiscal twelve months ended December 28, 2025, December 29, 2024, and December 31, 2023 were as follows:
|  |  |  |  |  | Fiscal Twelve Months Ended
(Dollars in Millions) |  |  |  |  |  | December 28, 2025 |  | December 29, 2024 |  | December 31, 2023
Net periodic benefit cost |  |  |  |  |  | $ | 40 |  |  | $ | 33 |  |  | $ | 30 |
Net actuarial (gain) loss |  |  |  |  |  | (8) |  |  | (36) |  |  | 118 |
Amortization of net actuarial (gain) loss |  |  |  |  |  | (14) |  |  | (9) |  |  | 4 |
Effect of exchange rates |  |  |  |  |  | 15 |  |  | (7) |  |  | 9 |
Total (income) loss recognized in Other comprehensive income (loss), before tax |  |  |  |  |  | (7) |  |  | (52) |  |  | 131 |
Total recognized in net periodic benefit cost and Other comprehensive income (loss) |  |  |  |  |  | $ | 33 |  |  | $ | (19) |  |  | $ | 161 |
The Plans are funded in accordance with local regulations. Additional discretionary contributions are made when deemed appropriate to meet the long-term obligations of the Plans. For certain plans, funding is not a common practice, as funding provides no economic benefit, and consequently, these plans are not funded. The schedule of projected future benefit payments from the Plans sponsored by the Company for the ten succeeding fiscal years is as follows:
(Dollars in Millions) |  |  |  |  |  |  |  |  |  |
2026 |  | 2027 |  | 2028 |  | 2029 |  | 2030 |  | 2031-2035
$ | 40 |  |  | $ | 39 |  |  | $ | 41 |  |  | $ | 42 |  |  | $ | 45 |  |  | $ | 261 |
The Company currently has $15 million in projected benefit plan contributions. The Company’s investment objective is to generate investment returns that provide adequate assets to meet current and future benefit obligations. The investment objectives are achieved through diversification of the retirement plan assets and management of liquidity to meet benefit payments and an appropriate balance of long-term investment return and risk. Plan assets are diversified by asset class in order to reduce volatility of overall results and to take advantage of various investment opportunities. The Company’s retirement plan assets as of December 28, 2025 were primarily comprised of debt instruments, equity securities, buy-in annuity policies, and other assets. Other assets are mainly comprised of monetary assets such as cash, insurance contracts, and insured benefits to employees allocated from a pension trustee. The Company further invests in commingled funds that are actively investing with a focus to meet the allocation and risk exposure by focusing on debt or equity securities. The increased volatility associated with equity securities that generate higher expected returns are offset by long-duration fixed-income securities that help reduce the volatility of the overall portfolio. Investment risk exposure is carefully controlled with plan assets rebalanced to target allocations on a periodic basis and continued monitoring through investment portfolio reviews. The asset allocation as of December 28, 2025 and December 29, 2024 and target allocations for 2026 related to the Plans sponsored by the Company are as follows:
|  |  |  |  |  | Percent of Plan Assets |  | Target Allocation
|  |  |  |  |  | December 28, 2025 |  | December 29, 2024 |  | 2026
Debt instruments |  |  |  |  |  | 8 | % |  | 49 | % |  | 8 | %
Equity securities |  |  |  |  |  | 14 |  |  | 14 |  |  | 13 |
Buy-in annuity policies |  |  |  |  |  | 45 |  |  | — |  |  | 45 |
Other assets |  |  |  |  |  | 33 |  |  | 37 |  |  | 34 |
Total plan assets |  |  |  |  |  | 100 | % |  | 100 | % |  | 100 | %
Determination of Fair Value of Plan Assets The Plans have established a process for determining fair values. Fair value is based upon quoted market prices, where available. If listed prices or quotes are not available, fair value is based upon models that primarily use, as inputs, market-based or independently sourced market parameters, including yield curves, interest rates, volatilities, equity or debt prices, foreign exchange rates, and credit curves. While the Plans believe the valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Valuation Hierarchy Fair value measurements are estimated based on valuations techniques and inputs categorized as follows: •Level 1—Quoted prices in active markets for identical assets or liabilities •Level 2—Significant other observable inputs •Level 3—Significant unobservable inputs The Net Asset Value (“NAV”) is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. Following is a description of the valuation methodologies used for the investments measured at fair value. •Debt instruments—A limited number of these investments are valued at the closing price reported on the major market on which the individual securities are traded. The debt instruments primarily relate to government bonds, money held by trusts, or bonds taken from funds. Where quoted prices are available in an active market, the investments are classified as Level 1. If quoted market prices are not available for the specific security, then fair values are estimated by using other observable inputs including pricing models, quoted prices of securities with similar characteristics, or discounted cash flows and are classified as Level 2. •Equity securities—Equity securities are valued at the closing price reported on the active market on which the individual securities are traded. Substantially all equity securities are classified within Level 1 of the valuation hierarchy. •Buy-in annuity policies—Buy-in annuity policy values are determined on a replacement policy value basis by discounting the projected cash flows of the plan members using a discount rate based upon the risk-free rate adjusted for the estimated insurer premium and credit risk. Fair value of the UK Pension Plan buy-in annuity is set equal to the estimated contract value. These assets are categorized as Level 3. •Other assets—Other assets include cash and money markets held within an account that guarantee a fixed percentage return. Substantially all cash and monetary assets are classified within Level 1 of the valuation hierarchy. As of December 28, 2025 and December 29, 2024, insurance contracts with a defined return are classified as Level 3 assets within the valuation hierarchy. Other assets also include insured benefits to employees allocated from a pension trustee. The value of these assets is determined based on the vested value of the underlying employee obligations multiplied by the publicly available coverage ratio of the trustee. These assets are categorized as Level 3. •Commingled funds—The fair value of non-publicly traded funds is determined using the NAV provided by the administrator of the fund when the Company has the ability to redeem the asset at the measurement date. When the Company is using the NAV as a practical expedient, those investments are not included in the valuation hierarchy. The investments are valued using the NAV provided by the fund administrator. Assets in the Level 2 category have a quoted market price. The following tables set forth the Plans’ investments measured at fair value as of December 28, 2025 and December 29, 2024:
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Assets Measured at NAV |  | Total Assets
(Dollars in Millions) |  | December 28, 2025
Debt instruments |  | $ | — |  |  | $ | 11 |  |  | $ | — |  |  | $ | — |  |  | $ | 11 |
Equity securities |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 1 |
Buy-in annuity policies |  | — |  |  | — |  |  | 256 |  |  | — |  |  | 256 |
Other assets |  | 80 |  |  | — |  |  | 175 |  |  | — |  |  | 255 |
Commingled funds |  | — |  |  | 41 |  |  | — |  |  | 8 |  |  | 49 |
Total investments at fair value |  | $ | 81 |  |  | $ | 52 |  |  | $ | 431 |  |  | $ | 8 |  |  | $ | 572 |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)(1) |  | Assets Measured at NAV |  | Total Assets
(Dollars in Millions) |  | December 29, 2024
Debt instruments |  | $ | — |  |  | $ | 223 |  |  | $ | — |  |  | $ | — |  |  | $ | 223 |
Equity securities |  | 8 |  |  | — |  |  | — |  |  | — |  |  | 8 |
Other assets |  | 44 |  |  | — |  |  | 151 |  |  | — |  |  | 195 |
Commingled funds |  | — |  |  | 92 |  |  | — |  |  | 8 |  |  | 100 |
Total investments at fair value |  | $ | 52 |  |  | $ | 315 |  |  | $ | 151 |  |  | $ | 8 |  |  | $ | 526 |
(1) The activity of the Level 3 other assets was not significant. The changes in plan assets valued using significant unobservable inputs (Level 3) were as follows for the fiscal twelve months ended December 28, 2025:
|  |  |  |  |  | Buy-in Annuity Policy Contract Plan Assets |  | Other Assets
|  |  |  |  |  | Fiscal Twelve Months Ended
(Dollars in Millions) |  |  |  |  |  | December 28, 2025
Fair value of plan assets, beginning of fiscal year |  |  |  |  |  | $ | — |  |  |  |  | $ | 151 |  |  |
Net realized and unrealized gains |  |  |  |  |  | — |  |  |  |  | 9 |  |  |
Net purchases, issuances, and settlements(1) |  |  |  |  |  | 250 |  |  |  |  | (7) |  |  |
Currency translation |  |  |  |  |  | 6 |  |  |  |  | 22 |  |  |
Fair value of plan assets, end of fiscal year |  |  |  |  |  | $ | 256 |  |  |  |  | $ | 175 |  |  |
(1) Net purchases, issuances, and settlements primarily related to the purchase of the UK Pension Plan buy-in annuity policy. Participation in J&J Plans Prior to the Separation, the Company’s employees participated in J&J’s defined benefit pension plans, which covered eligible employees in the United States and certain foreign jurisdictions. J&J also provided medical benefits, principally to its U.S. retirees and their dependents, through its other postretirement benefit plans. J&J’s defined benefit pension plans were accounted for as multiemployer pension plans, and assets and liabilities associated with these plans were not reflected on the Consolidated Balance Sheets. After the Separation, the Company no longer had any multiemployer plans, as they were all converted to a multiple-employer pension plan or a single-employer pension plan. The Consolidated Statement of Operations for the fiscal twelve months ended December 31, 2023 includes expense allocations for these benefits, which were determined using a proportional allocation method. Total benefit plan expense allocated to the Company amounted to $17 million for the fiscal twelve months ended December 31, 2023. No allocations were made subsequent to the fiscal three months ended July 2, 2023, during which Kenvue became a fully independent company. In connection with the Separation, J&J has provided participation rights for a 15-year period for certain employees to continue receiving the pension benefits within the United States and Canada. As a result of this benefit provided to Kenvue employees, an asset has been recorded on the Consolidated Balance Sheet during the fiscal twelve months ended December 31, 2023 in the amount of $94 million that will be amortized straight-line over the 15-year period ended 2039. Savings Plan The Company has 401(k) savings plans designed to enhance the existing retirement programs covering eligible employees. The Company matches a percentage of each employee’s contributions consistent with the provisions of the plan for which they are eligible. Total contributions attributable to the Company’s employees were $121 million, $108 million, and $46 million for the fiscal twelve months ended December 28, 2025, December 29, 2024, and December 31, 2023, respectively. Post-Employment Benefit Plans Prior to the Separation, J&J maintained a post-employment benefit plan to provide limited benefits to its former employees, including former employees of the Company, if they were involuntarily terminated. The duration of these benefits was generally based on the employee’s term of service with J&J, and included both severance compensation and other benefits, including medical coverage. The post-employment plan was published and was considered a benefit to employees which was earned over the employee’s term of service. As a result, J&J recognized the cost of this benefit as it was earned by the employee as required by ASC 712, Compensation—non-retirement post-employment benefits. The cost of this benefit allocated to the Company in the fiscal twelve months ended December 31, 2023 was approximately $18 million and is reflected as an expense in the Consolidated Statement of Comprehensive Income. No allocations were made subsequent to the fiscal three months ended July 2, 2023, during which Kenvue became a fully independent company.

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