Edgewell Personal Care(EPC)2025-02-10 14:24Financial Performance - Net sales for the first quarter of fiscal 2025 decreased by $10.5 million, or 2.1%, to $478.4 million compared to the prior year quarter [104]. - Organic net sales decreased by $6.5 million, or 1.3%, with international markets growing by 2.0% driven by price and volume gains [104]. - Net (loss) earnings for the first quarter of fiscal 2025 were $(2.1) million, compared to $4.8 million in the prior year quarter [104]. - Adjusted net earnings for the first quarter of fiscal 2025 were $3.3 million, down from $12.0 million in the prior year quarter [104]. - Diluted net (loss) earnings per share were $(0.04) compared to $0.09 in the prior year quarter [104]. - Gross profit for the first quarter of fiscal 2025 was $191.6 million, a decrease of $6.1 million, or 3.1%, from the prior year quarter [107]. - Gross margin as a percentage of net sales decreased by 30 basis points to 40.1%, impacted by approximately 140 basis points of negative foreign currency [107]. - Adjusted gross margin as a percentage of net sales also decreased by 60 basis points to 40.1% due to increased promotional levels and core inflation [107]. Sales Performance by Segment - Organic sales in North America declined by 3.9%, primarily due to decreases in Wet Shave and Feminine Care [104]. - Wet Shave net sales decreased by $7.2 million, or 2.4%, to $294.5 million, with a 1.1% unfavorable currency impact [119]. - Sun and Skin Care net sales increased by $5.2 million, or 4.5%, to $120.6 million, with organic growth of 5.1% [121]. - Feminine Care net sales fell by $8.5 million, or 11.8%, to $63.3 million, with organic sales down 11.7% [124]. Expenses and Costs - SG&A expenses were $102.9 million, or 21.5% of net sales, in Q1 fiscal 2025, compared to $103.3 million, or 21.1% in the prior year [108]. - Advertising and sales promotion expenses increased by $2.1 million, or 4.4%, to $50.3 million, representing 10.5% of net sales, up from 9.9% in the prior year [109]. - R&D expenses rose to $13.9 million, an increase of $0.6 million, or 4.5%, accounting for 2.9% of net sales, compared to 2.7% in the prior year [110]. Debt and Financing - Interest expense associated with debt decreased by $1.0 million, or 5.1%, to $18.8 million due to a lower overall debt balance [113]. - Total borrowings increased to $1,476.2 million as of December 31, 2024, from $1,308.5 million at the end of September 2024 [131]. - Net cash provided by financing activities was $109.9 million in Q1 fiscal 2025, up from $69.8 million in the prior year period [138]. - Net borrowings under the Revolving Credit Facility were $165.0 million in Q1 fiscal 2025, compared to $91.0 million in the prior year period [138]. - As of December 31, 2024, outstanding borrowings under the Revolving Credit Facility were $199.0 million [143]. - Future minimum repayments of debt include $750.0 million in fiscal 2028 and $500.0 million in fiscal 2029 [143]. - Assuming a one-percent increase in interest rates, annual interest expense on variable-rate debt instruments would increase by approximately $2.3 million [148]. Cash Flow and Dividends - Cash flow used for operating activities was $115.6 million in Q1 fiscal 2025, up from $72.9 million in the prior year, driven by changes in net working capital [136]. - Dividend payments totaled $7.9 million in Q1 fiscal 2025, an increase from $7.6 million in the prior year period [138]. - Dividends declared during the three months ended December 31, 2024, totaled $7.1 million [142]. - A quarterly cash dividend of $0.15 per common share was declared for Q1 fiscal 2025, payable on April 9, 2025 [141]. - Share repurchases amounted to $30.3 million for 0.8 million shares in Q1 fiscal 2025, compared to $15.0 million in the prior year period [139]. Taxation - The effective tax rate for Q1 fiscal 2025 was (21.7)%, compared to 20.1% in the prior year, with an adjusted rate of 43.6% [115]. Currency Impact - The unfavorable impact from currency movements on net sales was $4.0 million, or 0.8% [106]. - As of December 31, 2024, the company had no open derivative or hedging instruments for future purchases of raw materials or commodities [148].