Edgewell Personal Care(EPC)2025-02-10 11:18Financial Performance - Net sales for Q1 2025 were $478.4 million, a decrease of 2.1% year-over-year, with organic net sales down 1.3%[5]. - GAAP diluted EPS was $(0.04), compared to $0.09 in the prior year quarter, while adjusted EPS was $0.07, reflecting a $0.17 unfavorable impact from currency movements[5][15]. - Gross profit decreased to $191.6 million, with a gross margin of 40.1%, down 30 basis points from the prior year, impacted by approximately 140 basis points of negative foreign currency[8]. - Operating income decreased to $20.3 million from $26.1 million, indicating a decline of 22.2% year-over-year[37]. - The company reported a net loss of $2.1 million, compared to net earnings of $4.8 million in the prior year, resulting in a diluted loss per share of $0.04[37]. - Total adjusted non-GAAP income for Q1 2025 was $46.4 million, a decrease of 22.3% compared to Q1 2024[51]. - Adjusted EBITDA for Q1 2025 is projected to be approximately $356 - $368 million, down from $57.2 million in Q1 2024[57]. Market Performance - International markets saw a 2.0% growth, driven by price and volume gains, while North America organic sales declined by 3.9%[7]. - Organic net sales for the Feminine Care segment decreased by 11.7% in Q1 2025[50]. - GAAP reported net sales for Q1 2025 decreased by 2.1% to $478.4 million compared to Q1 2024[50]. Shareholder Returns - The company returned $38 million to shareholders through share repurchases of $30 million and dividends of $8 million in Q1 2025[5]. - The Board declared a cash dividend of $0.15 per common share for Q1 2025, payable on April 9, 2025[18]. Future Outlook - Full-year adjusted EPS is now expected to be in the range of $3.15 to $3.35, reflecting increased anticipated negative foreign currency changes[22]. - Organic net sales for the full fiscal year are projected to grow between 1% to 3%, with currency expected to negatively impact reported net sales by 160 basis points[23]. - Adjusted EBITDA is expected to be towards the lower end of the range of $356 to $368 million, including an estimated $23 million unfavorable impact from foreign currency changes[23]. - Adjusted EPS outlook for fiscal 2025 is projected to be between $3.15 - $3.35, with GAAP EPS estimated at $2.54 - $2.74[55]. - The effective tax rate for adjusted earnings is projected to be approximately 22.8% for fiscal 2025[55]. Cash Flow and Debt - The company ended Q1 2025 with $176 million in cash and a net debt leverage ratio of 3.8x[5]. - Cash and cash equivalents at the end of the period were $175.5 million, down from $209.1 million at the beginning of the period[42]. - Free cash flow conversion was negative, with net cash used for operating activities amounting to $115.6 million[42]. - Long-term debt increased to $1,440.6 million from $1,275.0 million, reflecting a rise in leverage[39]. - Net debt increased to $1,292.3 million as of December 31, 2024, up from $1,090.4 million at the end of September 2024[53]. Operational Challenges - The company experienced a decrease in inventories, which rose to $501.6 million from $477.3 million, indicating potential supply chain challenges[39]. - The company incurred restructuring and repositioning costs of approximately $4.2 million in Q1 2025[54]. - The company plans to continue focusing on organic growth and improving operational efficiency despite current financial challenges[32]. Segment Performance - Total segment profit for the three segments was $46.4 million, down from $59.7 million, with Wet Shave segment profit decreasing to $46.6 million from $53.7 million[46]. - Segment profit for the Wet Shave category decreased by 13.2% to $46.6 million in Q1 2025[51].