A Texas state judge on November 14, 2025 ruled that Kenvue, the former Johnson & Johnson spin‑off, may proceed with its scheduled $398 million dividend payment due on November 26. The decision came after Texas Attorney General Ken Paxton filed a lawsuit seeking to block the distribution, arguing that the company had concealed risks associated with Tylenol use during pregnancy that could lead to autism and ADHD in children.
The judge’s ruling hinged on jurisdictional arguments. Kenvue is incorporated in Delaware and headquartered in New Jersey, and the court found that Texas lacked the authority to interfere with a company that does not conduct business in the state. Kenvue’s counsel emphasized that the dividend was a routine, lawful distribution of earnings and that the AG’s request exceeded the court’s jurisdiction. The decision therefore removed a legal hurdle that could have delayed or prevented the payout.
Kenvue’s financial performance in the third quarter of 2025 supports the dividend. Net sales fell 3.5% year‑over‑year to $3.76 billion, while adjusted diluted earnings per share were $0.28, a slight decline from the $0.31 reported in the same quarter a year earlier. Gross profit margin expanded to 61.2% from 60.7% a year ago, driven by productivity gains and a favorable product mix. The dividend payout ratio of 109.98% reflects the company’s decision to return a substantial portion of earnings to investors, consistent with its historical dividend policy of $0.83 per share for the year.
The AG’s lawsuit is part of a broader legal challenge against Kenvue and Johnson & Johnson over alleged links between acetaminophen and neurodevelopmental disorders. While some medical experts dispute a direct causal relationship, the lawsuit seeks to preserve funds for potential claims. Kenvue maintains that Tylenol is safe and that the allegations lack scientific consensus. The court’s ruling allows the company to continue its dividend policy while it navigates the litigation, but the legal dispute remains a potential headwind for future financial planning.
The decision has implications beyond the dividend. It preserves Kenvue’s cash flow for shareholder returns and signals that the company’s legal strategy—centered on jurisdiction and corporate structure—has been successful in this instance. The outcome also keeps the company’s financial position intact as it faces ongoing litigation and potential acquisition talks, such as the proposed $40 billion takeover by Kimberly‑Clark. By clearing the dividend, Kenvue demonstrates resilience in its capital allocation strategy amid regulatory scrutiny.
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