Group 1 - Morgan Stanley's household products and beverage analyst, Dara Mohsenian, is leading the presentation [1] - Edgewell is participating in Morgan Stanley's Global Consumer and Retail Conference, represented by President and CEO Rod Little and CFO Fran Weissman [2]

Edgewell Personal Care Company (NYSE:EPC) 2025 Conference Summary Company Overview - **Company**: Edgewell Personal Care Company - **Event**: 2025 Conference - **Date**: December 02, 2025 Key Points Organizational Changes and Strategy - Significant organizational changes have been made, including new leadership in North America and a shift to a regional hub model globally [4][5] - The recent divestiture of the FemCare business is seen as a strategic move to focus on core categories such as shave, grooming, sun, and skincare [17][19] - North America has been identified as an area needing a commercial reset, with a new leadership team in place to drive growth [7][8] Financial Performance and Growth - International growth accounts for 40% of the portfolio, with mid-single-digit growth expected to continue into fiscal 2026 [5][37] - The company has achieved consistent cost productivity improvements of 200-300 basis points year-on-year [6][26] - The divestiture of FemCare was completed for $340 million, providing financial flexibility and operational focus [18][20] Market Environment - The overall growth rate in the consumer packaged goods (CPG) categories is around 2%, with similar trends observed in the U.S. market [13][14] - The promotional environment in the U.S. has become more competitive, particularly in women's shave and FemCare categories [14][12] Capital Allocation and Investment - Post-divestiture, the focus will be on strengthening the balance sheet and paying down debt, with 80% of the FemCare proceeds expected to convert into cash [20][21] - Increased advertising and promotion (A&P) spending is planned for fiscal 2026, rising from 10% to 12% of sales, aimed at driving top-line growth [29][32] Product Categories and Innovation - The grooming category, including brands like Jack Black and Bulldog, is expected to grow at mid to high single-digit rates [45] - The wet shave category is less competitive than in previous years, with Edgewell positioned as a key player alongside Gillette [48][49] - New product innovations and campaigns are being launched to enhance market presence, particularly in the U.S. [30][31] Future Outlook - The company is optimistic about stabilizing organic sales growth in the U.S., with expectations of low single-digit growth in the back half of 2026 [41][42] - Internationally, growth is anticipated to be driven by the sun and grooming categories, with significant potential in markets like Europe and Asia [39][40] Key Risks and Considerations - The company acknowledges challenges in the lower middle-income consumer demographics, which may impact overall category performance [13][14] - There is a focus on managing stranded costs post-FemCare divestiture, with expectations of a $35-$45 million headwind in the short term [22][23] Conclusion - Edgewell Personal Care Company is at a pivotal moment with strategic changes aimed at enhancing growth and operational efficiency. The focus on core categories, coupled with increased investment in marketing and innovation, positions the company for potential recovery and growth in the coming years [51][52]

Core Insights - Edgewell Personal Care Company will participate in a fireside chat at the Morgan Stanley Global Consumer and Retail Conference on December 2, 2025, at 10:15 A.M. ET, with presentations by the CEO Rod Little and CFO Francesca Weissman [1][2] Company Overview - Edgewell is a leading pure-play consumer products company with a diversified portfolio that includes established brands such as Schick®, Wilkinson Sword®, Billie®, Edge®, Skintimate®, Playtex®, Stayfree®, Carefree®, o.b.®, Banana Boat®, Hawaiian Tropic®, Bulldog®, Jack Black®, Cremo®, and Wet Ones® [2] - The company operates in over 50 markets globally, including the U.S., Canada, Mexico, Germany, Japan, the U.K., and Australia, employing approximately 6,700 people worldwide [2] Recent Developments - Edgewell announced the sale of its feminine care business to Essity for $340 million [4]

Business Strategy and Growth - The company plans to sell its Feminine Care segment for $340 million, subject to purchase price adjustments upon closing [38]. - The company expects to drive growth in its Sun and Skin Care business through product innovation, increased distribution, and geographic expansion [35]. - The Bulldog skincare products have expanded sales geographically since acquisition, with continued resource commitment for growth [37]. - The company has a diverse portfolio of personal care brands acquired over the years, enhancing its market position [30]. - Customer orders for Sun Care products are highly seasonal, leading to increased sales during late winter through mid-summer months [48]. Market Position and Competition - The company holds the number two global market share position in wet shaving, with significant presence in the U.S., Canada, Japan, Germany, France, and the U.K. [32]. - The company is one of the top three manufacturers of feminine care products in North America, leveraging competitive product technologies [38]. - The company faces competition from major players like Procter & Gamble and Kimberly Clark in the feminine care market [44]. - The global men's skincare market is expected to continue growing, with the company competing through its Bulldog and Jack Black brands [43]. Financial Performance and Risks - Walmart accounted for approximately 17.4% of the company's net sales in fiscal 2025, with Target Corporation representing about 9.2% for the Sun and Skin Care segment and 10.1% for the Feminine Care segment [46]. - The company maintains a cash flow hedging program related to foreign currency risk, with unrealized pre-tax gains of $1.4 million and $2.4 million at September 30, 2025, and 2024, respectively [287]. - The company is exposed to significant currency rate risks, particularly with the euro, Japanese yen, British pound, Canadian dollar, and Australian dollar, which can impact reported earnings [284]. - Outstanding variable-rate debt instruments amounted to $140.0 million, primarily related to the Revolving Credit Facility and international notes payable [293]. - A one percent increase in applicable interest rates would increase annual interest expense by approximately $1.7 million [293]. Innovation and Intellectual Property - As of September 30, 2025, the company owned 271 unexpired U.S. patents and 1,321 foreign patents, with expiration dates ranging from October 2025 to June 2050 [52]. - The company actively pursues foreign patent protection and routinely prepares additional patent applications, indicating a strong focus on innovation and intellectual property [52]. Sustainability and Compliance - The company aims to achieve operational carbon neutrality across its global operations and reduce greenhouse gas emissions as part of its Sustainable Care 2030 strategy [63]. - The company is subject to various environmental regulations, including those from the U.S. FDA and EPA, which govern the manufacture and distribution of its products [54]. - The company is committed to compliance with discrimination laws and fostering an inclusive work environment [70]. Employee Wellbeing and Culture - The company has approximately 6,700 employees, with around 2,000 based in the United States, fostering a culture centered around the guiding purpose of Making Useful Things Joyful [67]. - The company emphasizes employee wellbeing through various programs, including onsite biometric screening and mental health support, aiming to foster a culture of wellbeing by 2025 [69]. - Employee experience survey results show increased confidence in the company's future and a sense of belonging, with improvements noted year over year [72]. - The company’s human resources policies and wellbeing programs are designed to attract and retain key personnel, contributing to positive employee retention rates [69]. Operational Management - The company utilizes a direct sales force supplemented by strategic distributors and wholesalers, with dedicated commercial organizations in key markets [45]. - The principal raw materials include steel, plastic resins, and organic chemicals, which are sourced regionally or globally and are subject to price and availability fluctuations [49]. - The company has established e-commerce operations across several business lines, including partnerships with T-Mall in China to accelerate e-commerce sales [45]. - The company has a strong focus on safety culture, revitalizing its "Alive and Well" program across manufacturing sites [71]. - The company’s executive team includes experienced leaders, with the Chief Executive Officer having served since March 1, 2019, and the Chief Financial Officer since December 1, 2024 [76][84].

Core Insights - Edgewell Personal Care Company (NYSE:EPC) is recognized as one of the 15 Best 52-Week Low Dividend Stocks to Invest in [1] - RBC Capital has reduced its price target for Edgewell from $26 to $23 while maintaining an Outperform rating, citing a slight revenue beat in Q4 but disappointing profitability and FY26 outlook [2] - The planned divestiture of the Fem Care division is expected to enhance Edgewell's growth and margins over time, although significant improvements are not anticipated in the short term [3] Financial Performance - For fiscal Q4 2025, Edgewell reported revenue of $537.2 million, reflecting a 3.8% increase year-over-year and exceeding analysts' estimates by $4.38 million [5] - The company ended the quarter with $225.7 million in cash and returned $119.5 million to shareholders through $90.2 million in buybacks and $29.3 million in dividends [5] Strategic Moves - Edgewell announced a definitive agreement to sell its feminine care division to Essity for $340 million, with the deal expected to close in Q1 2026, pending regulatory approvals [4] - The company plans to utilize most of the after-tax proceeds from the sale to strengthen its balance sheet and continue investing in long-term growth across its core brands [4]

Core Insights - Edgewell Personal Care (EPC) reported revenue of $537.2 million for the quarter ended September 2025, marking a year-over-year increase of 3.8% [1] - The earnings per share (EPS) for the same period was $0.68, down from $0.72 a year ago, indicating a decline [1] - The reported revenue exceeded the Zacks Consensus Estimate of $536.03 million by 0.22%, while the EPS fell short of the consensus estimate of $0.82 by 17.07% [1] Revenue Performance - Net Sales in Feminine Care reached $67.3 million, slightly below the average estimate of $67.62 million, reflecting a year-over-year increase of 0.9% [4] - Net Sales in Wet Shave amounted to $321.9 million, compared to the estimated $328.88 million, showing a year-over-year increase of 1.2% [4] - Net Sales in Sun and Skin Care were reported at $148 million, surpassing the average estimate of $139.53 million, with a significant year-over-year increase of 11.5% [4] Stock Performance - Over the past month, shares of Edgewell Personal have declined by 6.2%, contrasting with the Zacks S&P 500 composite's increase of 4.6% [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - In Q4, the company generated organic net sales growth of 2.5%, aligning with expectations in international markets and showing progress in North America [7][22] - Adjusted gross margin rate decreased by 330 basis points, primarily due to higher-than-anticipated inventory adjustments and increased trade promotions [27][28] - Adjusted operating income was $40.3 million, or 7.5% of net sales, compared to $56 million, or 10.8% of net sales last year [28] Business Line Data and Key Metrics Changes - International organic net sales grew by 6.9%, driven by volume and price gains across all segments [22] - North America experienced a decline in organic net sales of approximately 1%, with Wet Shave declining by about 1% while Sun Care and Grooming showed growth [23][24] - Grooming organic net sales grew by 9%, led by over 28% growth in Cremo [26] Market Data and Key Metrics Changes - International markets represented approximately 40% of global sales and delivered strong growth for the fourth consecutive year [8] - Europe generated its third straight year of growth, and Greater China delivered double-digit growth [9] - In the U.S. razor and blades category, consumption was down 80 basis points in the quarter, although market share improved sequentially [23] Company Strategy and Development Direction - The company plans to divest its Feminine Care business to focus on core categories with competitive advantages, including Shave, Sun, and Skin Care [6][19] - A multi-year innovation roadmap is being implemented, with significant investments in brand building and marketing [11][12] - The company aims to optimize its North American Wet Shave business and manufacturing footprint to enhance productivity and efficiency [10][12] Management Comments on Operating Environment and Future Outlook - Management acknowledged significant external pressures, including tariffs and foreign exchange volatility, impacting financial performance [8][20] - The outlook for fiscal 2026 anticipates a return to organic net sales growth, driven by mid-single-digit growth in international markets and stabilization in North America [16][33] - The company expects to face challenges from inflation and tariffs but is focused on productivity gains and brand investments to support growth [16][35] Other Important Information - The company declared a $0.15 per share dividend for Q4 and returned approximately $7 million to shareholders via dividends [29] - The anticipated divestiture of the Feminine Care business is expected to impact adjusted EPS by approximately $0.40-$0.50 annually [32] Q&A Session Summary Question: Outlook and EPS in Q1 - Management indicated that the 2026 plan is balanced and achievable, with expectations for low single-digit category growth and maintaining market share [42][43] Question: Strategy and M&A Intentions - The focus is on winning in Shave, Grooming, Sun, and Skin categories, with potential for M&A as asset values decline [51][54] Question: Productivity and Gross Margin Concerns - Management expressed confidence in the second-half-oriented plan, expecting higher sales growth and productivity improvements to enhance gross margin [64][66] Question: Sun and Skin Category Outlook - The company plans conservatively for the Sun season, with clean inventory levels and new campaigns for Hawaiian Tropic and Banana Boat [82]

Financial Data and Key Metrics Changes - In Q4, the company achieved organic net sales growth of 2.5%, aligning with expectations despite external pressures [7][22] - Adjusted gross margin rate decreased by 330 basis points, primarily due to unexpected year-end inventory adjustments and increased trade promotions [27][28] - Adjusted operating income was $40.3 million, representing 7.5% of net sales, down from 10.8% in the previous year [28] Business Line Data and Key Metrics Changes - International organic net sales grew by 6.9%, driven by volume and price gains across all segments [22] - North America experienced a decline in organic net sales by 60 basis points, with wet shave sales down approximately 1% [23] - Sun and skin care organic net sales increased by approximately 11%, with robust growth across each business segment [24] Market Data and Key Metrics Changes - International markets, representing about 40% of global sales, delivered strong growth for the fourth consecutive year, with Europe achieving its third straight year of growth [8][9] - The U.S. razor and blades category saw consumption down by 80 basis points, although market share improved sequentially [23] - The Billie brand achieved a 90 basis point share growth, now holding a 15% share at Walmart and 13% at Target [24] Company Strategy and Development Direction - The company plans to divest its feminine care business to focus on core categories with competitive advantages, including shave, sun, and skincare [6][19] - A multi-year innovation roadmap is being implemented, with significant investments in brand building and marketing to restore brand equity [11][14] - The transformation plan aims to simplify the U.S. structure, enabling faster decision-making and increased investment in growth capabilities [12][15] Management's Comments on Operating Environment and Future Outlook - The management acknowledged a challenging fiscal 2025 due to external pressures like tariffs and geopolitical tensions, but expressed confidence in the foundation for future growth [8][19] - For fiscal 2026, the company anticipates a return to organic net sales growth, driven by mid-single-digit growth in international markets and stabilization in North America [16][33] - The macro environment is expected to remain challenging, with muted category growth and cautious consumer spending [15][16] Other Important Information - The company generated productivity savings of 270 basis points in fiscal 2025, with expectations of approximately 310 basis points in fiscal 2026 [10][30] - Adjusted EBITDA for fiscal 2026 is projected to be in the range of $290 million to $310 million, approximately flat to the prior year [37] - The divestiture of the feminine care business is expected to impact adjusted EPS by approximately $0.40 to $0.50 annually [32] Q&A Session Summary Question: Outlook and EPS Expectations - The company expects a balanced and achievable plan for 2026, with low single-digit category growth assumptions and flexibility to maintain profit goals [41][43] Question: Strategy and M&A Intentions - The focus is on winning in shave, grooming, sun, and skin categories, with potential for M&A as asset values decline [51][53] Question: Productivity and Gross Margin Concerns - The company is confident in its second-half-oriented plan, expecting higher sales growth and productivity improvements to offset margin pressures [63][64] Question: Sun and Skin Category Insights - The company plans conservatively for the sun season, expecting low single-digit growth while focusing on brand campaigns and distribution gains [81][84]

Financial Data and Key Metrics Changes - In Q4 2025, the company achieved organic net sales growth of 2.5%, aligning with expectations despite external pressures [7][22] - Adjusted gross margin rate decreased by 330 basis points, primarily due to unexpected year-end inventory adjustments and increased trade promotions [26][28] - Adjusted operating income was $40.3 million, representing 7.5% of net sales, down from 10.8% the previous year [28] Business Line Data and Key Metrics Changes - International organic net sales grew by 6.9%, driven by volume and price gains across all segments [22] - North America experienced a decline in organic net sales by 60 basis points, with wet shave sales declining approximately 1% [23] - Sun and skin care organic net sales increased by approximately 11%, with robust growth across each business segment [24] Market Data and Key Metrics Changes - International markets, representing about 40% of global sales, delivered strong growth for the fourth consecutive year, with Europe achieving its third straight year of growth [8][9] - The U.S. razor and blades category saw consumption down by 80 basis points, although market share improved sequentially [23] - The Billie brand achieved a 90 basis point share growth, indicating strong retail performance [24] Company Strategy and Development Direction - The company plans to divest its feminine care business to focus on core categories with competitive advantages, including shave, sun, and skincare [6][20] - A multi-year innovation roadmap is being implemented, with significant investments in brand building and marketing to restore brand equity [11][14] - The transformation plan aims to simplify the U.S. structure, enhance decision-making speed, and increase investment in growth capabilities [12][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging fiscal 2025 due to external pressures like tariffs and geopolitical tensions, but expressed optimism about durable international growth and innovation [8][20] - The outlook for fiscal 2026 anticipates a return to organic net sales growth, driven by mid-single-digit growth in international markets and stabilization in North America [16][34] - The company expects to face continued inflation and tariff impacts but is focused on productivity gains and margin recovery [16][36] Other Important Information - The company declared a quarterly dividend of $0.15 per share for Q4 and completed approximately $90 million in share repurchases for the fiscal year [29] - The anticipated divestiture of the feminine care business is expected to impact adjusted EPS by approximately $0.40-$0.50 annually [32] Q&A Session Summary Question: Outlook and EPS Expectations - The company expects a balanced and achievable plan for 2026, with EPS potentially at a loss in Q1 due to margin pressures and tax rate changes [40][41] Question: Strategy and Portfolio Focus - The strategy focuses on winning in shave, grooming, sun, and skin categories, with plans for potential M&A as asset values decline [45][46] Question: Productivity and Gross Margin Concerns - Management expressed confidence in the second-half-oriented plan, expecting higher sales growth and productivity improvements to enhance gross margin [50][52] Question: Use of Proceeds from Divestiture - Proceeds from the feminine care sale will primarily be used for debt reduction, with a focus on maintaining a disciplined capital allocation strategy [54][55] Question: Sun and Skin Category Outlook - The company plans conservatively for the sun category, expecting low single-digit growth while investing in brand campaigns for Hawaiian Tropic and Banana Boat [57][58]

Core Insights - Edgewell Personal Care (EPC) reported quarterly earnings of $0.68 per share, missing the Zacks Consensus Estimate of $0.82 per share, and down from $0.72 per share a year ago, representing an earnings surprise of -17.07% [1] - The company posted revenues of $537.2 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.22%, compared to year-ago revenues of $517.6 million [2] - Edgewell Personal shares have declined approximately 43.7% year-to-date, contrasting with the S&P 500's gain of 16.5% [3] Company Performance - Over the last four quarters, Edgewell Personal has not surpassed consensus EPS estimates, topping revenue estimates only once [2] - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $487.08 million, and for the current fiscal year, it is $2.75 on revenues of $2.26 billion [7] Industry Context - The Consumer Products - Staples industry, to which Edgewell Personal belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Edgewell's stock performance [5][6]