Johnson & Johnson’s sales declined thanks to reduced COVID vaccine sales, but the company ended in a growth position for the full-year thanks to its commercial executions.

The world’s largest maker of health-related products posted a 2022 fourth-quarter sales decrease of 4.4%, primarily driven by unfavorable foreign exchange and reduced COVID-19 vaccine sales compared to the prior year. However, it’s full-year sales grew by 1.3%, with adjusted net earnings up 3.2%.

Selling, marketing and administrative expenses were down 9% year-over-year in Q4, but up marginally for the full year. The company says it had higher spend earlier in the year before transitioning to “pro-active cost management” in anticipation of an economic downturn.

Sales in the company’s consumer health division increased 3.9%, largely driven by over-the-counter products. Margins also grew from 18.6% to 22% year-over-year, driven by “brand marketing phasing,” with higher spend earlier in the year, as well sa supply chain improvements.

According to J&J, major contributors to growth in OTC were Tylenol and Motrin, as well as upper respiratory products and digestive health products. Growth was also driven by price actions, primarily in the U.S., as well as increased cough/cold/flu sales, though this was partially offset by supply restraints. In consumer health, J&J says it expects to continue utilizing strategic price increases.

Additionally, skin health and beauty growth was primarily driven by Neutrogena, offset by continued supply constraints, “portfolio simplification” and suspension of Russian sales.

In today’s earnings call, J&J’s Joaquin Duato, chairman of the board and CEO, says the company is making progress in forming a new publicly traded company – Kenvue – to spin off its consumer health business, to be completed in 2023.

Duato says Kenvue will be operated as “a company within a company,” and operating as a “two-sector company” will make it simpler, faster and more focused.