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Core Viewpoint - Edgewell Personal Care Company reported mixed financial results for the first quarter, with adjusted EPS exceeding market expectations but quarterly sales falling short of estimates [1] Financial Performance - The company posted an adjusted EPS of 3 cents, compared to market estimates of a loss of 16 cents [1] - Quarterly sales were reported at $422.800 million, missing market estimates of $477.676 million [1] - Edgewell Personal Care revised its FY2026 adjusted EPS guidance down from a range of $2.15-$2.55 to $1.70-$2.10, while reaffirming its FY2026 sales guidance of $2.235 billion-$2.302 billion [1] Stock Performance - Following the earnings announcement, Edgewell Personal Care shares increased by 6.3%, trading at $21.03 [2] Analyst Ratings and Price Targets - Wells Fargo analyst Chris Carey maintained an Overweight rating on Edgewell Personal Care and raised the price target from $20 to $22 [3] - Barclays analyst Lauren Lieberman maintained an Equal-Weight rating and increased the price target from $19 to $21 [3]

Core Viewpoint - Edgewell Personal Care Company reported mixed financial results for the first quarter, with adjusted EPS exceeding market expectations but quarterly sales falling short of estimates [1] Financial Performance - The company posted an adjusted EPS of 3 cents, compared to market estimates of a loss of 16 cents [1] - Quarterly sales were reported at $422.800 million, missing market estimates of $477.676 million [1] - The FY2026 adjusted EPS guidance was cut from a range of $2.15-$2.55 to $1.70-$2.10, while the sales guidance for FY2026 was reaffirmed at $2.235 billion-$2.302 billion [1] Stock Performance - Following the earnings announcement, Edgewell Personal Care shares increased by 6.3%, trading at $21.03 [2] Analyst Ratings and Price Targets - Wells Fargo analyst Chris Carey maintained an Overweight rating on Edgewell Personal Care and raised the price target from $20 to $22 [3] - Barclays analyst Lauren Lieberman maintained an Equal-Weight rating and raised the price target from $19 to $21 [3]

Core Insights - Edgewell Personal Care Company reported a Q1 fiscal 2026 GAAP EPS of -$1.41, impacted by the divestiture of its Feminine Care business, while adjusted EPS from continuing operations was -$0.16, outperforming the Zacks Consensus Estimate of -$0.18, resulting in an earnings surprise of 11.11% [1] - Revenue for the period was $422.8 million on a continuing operations basis, a 1.9% year-over-year increase, but below the Zacks Consensus Estimate of approximately $481.3 million, representing a 12.15% miss [2] - The company completed the divestiture of its Feminine Care business to Essity for $340 million, which is seen as a strategic move to focus on core areas and strengthen its balance sheet [3] Financial Performance - On a consolidated basis, net sales were $486.8 million, reflecting a 1.8% increase from the prior year, while organic net sales decreased by 0.5% on a continuing operations basis [2] - The company has exceeded consensus revenue estimates only once in the past four quarters, indicating ongoing challenges in meeting market expectations [2] - Financial ratios post-divestiture show a negative trailing P/E ratio of approximately -23.96, a P/S ratio of 0.42, a debt-to-equity ratio of 1.05, and a current ratio of 2.12, suggesting solid short-term financial health [5] Strategic Developments - The divestiture of the Feminine Care business is viewed as a pivotal milestone in the company's transformation, positioning Edgewell as a more focused and agile organization [3] - The company operates in a competitive consumer products industry, facing rivals such as Procter & Gamble and Unilever, and its Q1 performance modestly exceeded internal expectations for organic net sales, adjusted EPS, and adjusted EBITDA [4]

Financial Performance - Net sales for the three months ended December 31, 2025, were $422.8 million, an increase of 1.6% compared to $415.1 million in the same period of 2024[14]. - Gross profit decreased to $161.0 million, down 6.5% from $172.5 million year-over-year[14]. - The company reported a net loss of $65.7 million, compared to a net loss of $2.1 million in the prior year[14]. - Basic loss per share for continuing operations was $0.63, compared to a loss of $0.21 in the same quarter of the previous year[14]. - Operating loss for the quarter was $18.9 million, compared to operating income of $9.3 million in the prior year[14]. - Edgewell Personal Care Company reported a net loss of $65.7 million for the quarter ending December 31, 2025, compared to a net loss of $2.1 million for the same period in 2024[23]. - The company reported a loss from continuing operations before income taxes of $36.9 million in Q4 2025, compared to a loss of $12.7 million in Q4 2024[100]. Assets and Liabilities - Total current assets increased to $1,057.1 million from $995.5 million as of September 30, 2025[16]. - Long-term debt rose to $1,520.8 million, up from $1,383.3 million[16]. - Cash and cash equivalents at the end of the period were $223.3 million, slightly down from $225.7 million[16]. - As of December 31, 2025, total shareholders' equity was $1,486.2 million, down from $1,501.0 million as of December 31, 2024[23]. - Edgewell's total assets as of December 31, 2025, were approximately $1,560.6 million, reflecting a decrease from $1,561.8 million as of December 31, 2024[23]. - Total current liabilities decreased to $247.9 million as of December 31, 2025, from $311.1 million as of September 30, 2025[60]. Restructuring and Impairment - The company incurred restructuring charges of $18.1 million, significantly higher than $4.1 million in the same quarter last year[14]. - The company experienced a significant impairment charge of $37.4 million during the quarter[19]. - The company recorded a goodwill impairment loss of $37.4 million related to the Feminine Care segment prior to its sale[35]. - Total restructuring and related charges for the three months ended December 31, 2025, amounted to $12.7 million, compared to $1.8 million for the same period in 2024[44]. - The company expects to incur restructuring and related charges of approximately $7 million in fiscal 2026[41]. - The company anticipates incurring restructuring charges of $33 million related to the consolidation of its Mexico facilities, expected to be completed by the third quarter of fiscal 2026[43]. - The company plans to consolidate its Wet Shave operations, expecting to incur restructuring charges of $25 million, with completion anticipated by the first quarter of fiscal 2028[47]. Sales and Segment Performance - For the three months ended December 31, 2025, the Feminine Care segment generated net sales of $64.0 million, with a gross profit of $16.0 million[36]. - Wet Shave segment net sales were $291.3 million, down from $294.5 million, while Sun and Skin Care segment net sales increased to $131.5 million from $120.6 million[100]. - Total cost of products sold increased to $254.4 million in Q4 2025 from $240.4 million in Q4 2024, reflecting a rise in production costs[100]. - Total segment profit decreased to $38.6 million in Q4 2025 from $43.2 million in Q4 2024, primarily due to higher costs in the Wet Shave segment[100]. Dividends and Share Repurchase - The company declared dividends of $7.0 million during the quarter ending December 31, 2025[23]. - Dividends declared during the three months ended December 31, 2025, totaled $7.0 million, with payments made amounting to $7.4 million[71]. - The Company has authorized a share repurchase program of up to $100.0 million, with no shares repurchased during the three months ended December 31, 2025[69]. Accounting and Compliance - The company is currently assessing the impact of new accounting standards on its financial statements, including ASU No. 2023-09, effective for fiscal years beginning after December 15, 2024[32]. - The effective tax rate for the three months ended December 31, 2025, was 20.9%, compared to 20.6% for the same period in 2024[51]. Inventory and Capital Expenditures - Inventories increased from $433.8 million as of September 30, 2025, to $461.2 million as of December 31, 2025[55]. - Capital expenditures totaled $11.2 million in Q4 2025, down from $15.4 million in Q4 2024, indicating a reduction in investment spending[100]. - Capital expenditures from discontinued operations for the three months ended December 31, 2025, were $0.4 million, down from $1.4 million in 2024[37]. Currency and Hedging - The Company had unrealized pre-tax gains of $0.8 million and unrealized pre-tax losses of $1.4 million on forward currency contracts as of December 31, 2025, compared to September 30, 2025[80]. - The Company’s cash flow hedging program related to foreign currency risk has been deemed highly effective for accounting purposes[79]. - The Company’s foreign subsidiaries are primarily exposed to the U.S. dollar, impacting their balance sheet positions due to currency fluctuations[77].

Financial Data and Key Metrics Changes - The company reported a solid start to fiscal year 2026, with results modestly ahead of expectations, reflecting progress on its strategic focus areas [8][10] - Organic net sales decreased by 50 basis points, with North America showing strength that offset expected softness in international markets [10][22] - Adjusted EPS was reported at a loss of $0.16, compared to a loss of $0.10 in the prior quarter, while adjusted EBITDA was $25 million, down from $30.9 million in the prior year [27][28] Business Line Data and Key Metrics Changes - Organic net sales in North America grew just under 1%, driven by strong sun care performance, while Wet Shave organic net sales declined approximately 4% [22][24] - Sun and skincare organic net sales increased approximately 8%, with sun care growing nearly 20% in North America [24][25] - Grooming organic net sales growth was approximately 7%, led by significant growth in Cremo and Bulldog [24] Market Data and Key Metrics Changes - Over 70% of international markets either grew or held market share, with notable gains in Australia, Europe, Canada, and China [11][12] - In the U.S., market share pressure was modest, particularly in core Wet Shave, while men's grooming showed relative strength [10][11] - International Wet Shave organic net sales declined less than 1%, with volume declines partly offset by price gains [22] Company Strategy and Development Direction - The divestiture of the feminine care business is seen as a pivotal step in the company's transformation, allowing a sharper focus on core categories: shave, sun, skincare, and grooming [9][10] - The company aims to drive sustainable growth and stronger margins by reallocating capital and resources towards its core businesses [9][10] - The strategy includes a focus on international growth, innovation, productivity, and U.S. commercial transformation [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to organic net sales growth, driven by mid-single-digit growth in international markets and a more stable performance in North America [19][20] - The company anticipates gross margin expansion supported by productivity gains, despite inflationary pressures [20][21] - Management highlighted the importance of disciplined capital allocation and the use of proceeds from the FemCare sale for debt reduction [35][36] Other Important Information - The company declared a quarterly dividend of $0.15 per share, returning approximately $7 million to shareholders [28] - Adjusted free cash flow is expected to be in the range of $80 million to $110 million for the year, driven by working capital discipline [35] Q&A Session Summary Question: Thoughts on portfolio construction post-FemCare divestiture - Management emphasized the strategic move to divest the FemCare business, which was growth dilutive and capital intensive, allowing for a sharper focus on core categories [39][40] Question: Expectations for fiscal Q2 organic sales - Management expects organic net sales to be down about 3% in Q2, primarily due to shipment timing and phasing impacts [50][51] Question: Implications for FemCare dilution into fiscal 2027 - Management indicated that while there will be stranded costs to address, the company is committed to right-sizing its overhead structure and expects a stronger portfolio moving forward [53][56] Question: Promotional levels in North America for Shave - Management acknowledged that promotional intensity remains high, particularly in women's shaving, but expressed confidence in improved trends as new distribution and innovation are implemented [82]

Financial Data and Key Metrics Changes - The company reported a solid start to fiscal Q1 2026, with results modestly ahead of expectations, driven by strength in North America offsetting softness in international markets [8][10] - Organic net sales decreased by 50 basis points, with North America showing growth while international markets faced declines due to product development phasing [10][22] - Adjusted EPS was reported at a loss of $0.03, and adjusted EBITDA was $38 million, both better than the outlook [22] Business Line Data and Key Metrics Changes - Organic net sales in Wet Shave declined approximately 4%, while sun and skincare organic net sales increased by approximately 8%, with sun care growing nearly 20% [22][24] - Grooming organic net sales growth was approximately 7%, led by significant growth in Cremo and Bulldog, while Wet Ones saw a decline of about 15% [24][25] - North America organic net sales grew just under 1%, driven by sun care and grooming, while international markets showed double-digit growth in Oceania and Greater China [22][23] Market Data and Key Metrics Changes - In the U.S., market share declined by 100 basis points overall, but branded volume share increased by 50 basis points, indicating some resilience in brand performance [23][24] - Outside the U.S., share gains were noted in key markets including Australia, Europe, Canada, and China, with over 70% of markets either growing or holding market share [11][12] Company Strategy and Development Direction - The divestiture of the feminine care business is seen as a pivotal step in the company's transformation, allowing for a sharper focus on core categories like shave, sun, skincare, and grooming [9][10] - The company aims to drive sustainable growth and stronger margins by reallocating capital and resources towards these core businesses [9][10] - The strategy includes a focus on international growth, innovation, productivity, and U.S. transformation, with plans for increased brand investment and improved distribution [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to organic net sales growth, driven by mid-single-digit growth in international markets and a more stable performance in North America [19][20] - The company anticipates gross margin expansion supported by productivity gains, despite facing inflationary pressures and tariff impacts [20][21] - Management remains focused on disciplined capital allocation, prioritizing free cash flow generation and debt reduction following the divestiture [35][36] Other Important Information - The company declared a quarterly dividend of $0.15 per share, returning approximately $7 million to shareholders [28] - Adjusted free cash flow is expected to be in the range of $80 million to $110 million for the year, driven by working capital improvements [35] Q&A Session Summary Question: Thoughts on portfolio construction post-Fem Care divestiture - Management highlighted the strategic move to divest the Fem Care business, which was growth dilutive and capital intensive, allowing for a more focused approach on core categories [39][40] Question: Expectations for fiscal Q2 organic sales - Management expects organic net sales to be down about 3% in Q2, with timing shifts affecting performance, but remains confident in achieving the full-year outlook [50][51] Question: Implications of Fem Care dilution into fiscal 2027 - Management discussed the transitional services agreement with Essity and the need to address stranded costs, indicating a stronger portfolio and improved cash flow recovery in fiscal 2027 [53][58] Question: Organic sales phasing and category growth expectations - Management confirmed that category growth rates remain relevant, with expectations for improved performance in the second half of the year driven by better distribution and innovation [64][66]

Financial Data and Key Metrics Changes - The company reported organic net sales decreased by 50 basis points in Q1 2026, with North America showing growth while international markets experienced expected softness [10][21] - Adjusted EPS was reported at a loss of $0.16, compared to a loss of $0.10 in the prior quarter, indicating a decline in profitability [26] - Adjusted EBITDA was $25 million, down from $30.9 million in the prior year, reflecting challenges in the operating environment [26] Business Line Data and Key Metrics Changes - Wet Shave organic net sales declined approximately 4%, with growth in preps offset by declines in disposables and systems [22] - Sun and skincare organic net sales increased approximately 8%, driven by nearly 20% growth in sun care, particularly in North America [23] - Grooming organic net sales growth was approximately 7%, led by significant growth in Cremo and Bulldog [23] Market Data and Key Metrics Changes - In North America, organic net sales grew just under 1%, primarily due to strong sun care performance [21] - International markets, particularly Oceania and Greater China, experienced double-digit growth, while Europe delivered low single-digit growth [21] - Over 70% of markets either grew or held market share, with share gains noted in Australia, Europe, Canada, and China [11] Company Strategy and Development Direction - The divestiture of the Fem Care business is seen as a pivotal step in the company's transformation, allowing a sharper focus on core categories: shave, sun, skincare, and grooming [9] - The company aims to drive sustainable growth and stronger margins by reallocating resources towards these core businesses [9] - The strategy includes enhancing international growth, innovation, productivity, and a U.S. commercial transformation [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to organic net sales growth, driven by mid-single-digit growth in international markets and a more stable performance in North America [18] - The company anticipates gross margin expansion supported by productivity gains, despite facing inflationary pressures and tariffs [18] - Management remains focused on disciplined capital allocation and improving free cash flow generation [19] Other Important Information - The company declared a quarterly dividend of $0.15 per share, returning approximately $7 million to shareholders [27] - The impact of the Fem Care divestiture is expected to be approximately $0.44 in adjusted EPS and $44 million in adjusted EBITDA for fiscal 2026 [29] Q&A Session Summary Question: Thoughts on portfolio construction post-FemCare divestiture - Management highlighted the strategic move to divest a lagging business, improving gross margins and focusing on core categories with strong growth potential [38][39] Question: Expectations for fiscal Q2 organic sales - Management expects organic net sales to be down about 3% in Q2, with timing shifts affecting performance [49] Question: Implications of Fem Care dilution for fiscal 2027 - Management indicated that while there will be transitional costs, the company expects a stronger portfolio and improved cash flow recovery in fiscal 2027 [56] Question: Promotional levels in North America for Shave - Management acknowledged high promotional intensity in the shave category, particularly in women's products, but expressed confidence in improved trends in the second half of the year [80]

Core Insights - Edgewell Personal Care (EPC) reported a quarterly loss of $0.16 per share, which was better than the Zacks Consensus Estimate of a loss of $0.18, representing an earnings surprise of +11.11% [1] - The company posted revenues of $422.8 million for the quarter ended December 2025, missing the Zacks Consensus Estimate by 12.15% and down from $478.4 million year-over-year [2] - The stock has increased by approximately 21.7% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.71 on revenues of $588.06 million, while for the current fiscal year, the estimate is $2.33 on revenues of $2.26 billion [7] - The estimate revisions trend for Edgewell Personal was unfavorable prior to the earnings release, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Consumer Products - Staples industry, to which Edgewell belongs, is currently in the bottom 30% of the Zacks Industry Rank, suggesting that stocks in this category may underperform compared to those in the top 50% [8]

Financial Performance - Net sales for Q1 2026 were $422.8 million, an increase of 1.9% compared to the prior year quarter[4] - Organic net sales decreased by 0.5%, with North America showing a growth of 0.7% while international markets declined by 1.6%[4] - GAAP diluted net loss per share was $(0.63), compared to $(0.21) in the prior year quarter[15] - Adjusted EBITDA from continuing operations was $25.0 million, down from $30.9 million in the prior year quarter[13] - The company reported a net loss of $65.7 million for the quarter, compared to a net loss of $2.1 million in the prior year, indicating a significant deterioration in financial performance[34] - Operating loss for the quarter was $18.9 million, a decline from an operating income of $9.3 million in the same quarter last year[34] - Basic loss per share for continuing operations was $0.63, compared to a loss of $0.21 in the previous year, indicating worsening earnings performance[34] - The company reported a net loss of $36.5 million from discontinued operations for Q1 2026, compared to a profit of $8.0 million in Q1 2025[48] - The company reported a net loss of $65.7 million for Q1 2026, with an EBITDA of $(37.3) million[57] Sales and Revenue - The company expects full-year net sales to increase by approximately 0.5% to 3.5%, with an estimated 150-basis point positive impact from foreign currency changes[19] - For the three months ended December 31, 2025, total net sales increased to $422.8 million, up 1.9% from $415.1 million in the same period of 2024[41] - Wet Shave segment sales decreased to $291.3 million, a decline of 1.1% from $294.5 million, while Sun and Skin Care segment sales increased by 9.0% to $131.5 million[44] - Net sales from discontinued operations for Q1 2026 were $64.0 million, reflecting a 1.1% increase from $63.3 million in Q1 2025[49] - The impact of currency fluctuations contributed $9.6 million to net sales in Q1 2026, accounting for a 2.1% increase[55] Costs and Expenses - The company incurred pre-tax restructuring charges of $24.4 million in Q1 2026, with total expected charges for the fiscal year now at approximately $65 million[8][21] - Interest expense associated with debt is expected to be approximately $70 million, as proceeds from the Feminine Care transaction will be used to pay down debt[25] - Research and development expenses increased slightly to $13.8 million from $13.4 million, reflecting ongoing investment in product innovation[34] - Restructuring and related charges amounted to $24.4 million, significantly higher than $4.1 million in the prior year[41] - Restructuring and related costs for Q1 2026 amounted to $22.7 million, significantly impacting the adjusted EBITDA[57] - The company expects to incur approximately $63 million in restructuring and related costs in fiscal 2026[60] Debt and Liabilities - The company ended the quarter with $223.3 million in cash and an adjusted net debt leverage ratio of 3.8x[14] - Long-term debt increased to $1,520.8 million from $1,383.3 million, highlighting a rise in leverage[36] - The company’s total liabilities reached $2,281.7 million, up from $2,203.2 million, reflecting increased financial obligations[36] - Net debt as of December 31, 2025, was $1,330.0 million, up from $1,187.1 million as of September 30, 2025[47] - The company’s gross debt increased to $1,553.3 million as of December 31, 2025, from $1,412.8 million in September 2025[47] Future Outlook - Adjusted EPS is projected to be in the range of $1.70 to $2.10, reflecting a $0.44 per share reduction due to the divestiture of the Feminine Care business[19] - Adjusted EBITDA for Q1 2026 is projected to be between $245 million and $265 million, reflecting a decrease from the previous outlook of $290 million to $310 million[60] - Fiscal 2026 adjusted EPS outlook is estimated to be between $1.70 and $2.10, down from the prior estimate of $2.15 to $2.55[59] - The fiscal 2026 GAAP EPS is projected to be approximately $0.55 to $0.95, indicating a cautious outlook[59] - The company is focusing on divesting its Feminine Care segment, which is expected to impact future financial results and operational strategy[30] Segment Performance - Total segment profit decreased to $38.6 million from $43.2 million, with Wet Shave segment profit at $42.2 million and Sun and Skin Care segment loss at $3.6 million[41] - Segment profit for Q1 2026 decreased to $38.6 million, a decline of 10.6% compared to Q1 2025[45] - The company is focusing on segment performance evaluation excluding unusual or non-recurring items, which may impact financial results disproportionately[40] - Organic sales growth for the Feminine Care segment was 1.1% in Q1 2026[49]