Edgewell Personal Care(US:EPC)2025-05-07 20:29Financial Performance - Net sales in Q2 fiscal 2025 decreased by $18.7 million, or 3.1%, to $580.7 million compared to the prior year quarter[104] - Organic net sales decreased by $8.9 million, or 1.5%, with international markets growing by 2.9% driven by price and volume gains[104] - Net earnings for Q2 fiscal 2025 were $29.0 million, down from $36.0 million in the prior year quarter[104] - Adjusted net earnings for Q2 fiscal 2025 were $41.8 million, compared to $44.0 million in the prior year quarter[104] - Diluted net earnings per share in Q2 fiscal 2025 were $0.60, down from $0.72 in the prior year quarter[104] - Adjusted diluted net earnings per share in Q2 fiscal 2025 were $0.87, compared to $0.88 in the prior year quarter[104] - Net sales for the first six months of fiscal 2025 decreased by $29.2 million, or 2.7%, to $1,059.1 million compared to the prior year period[107] - Organic net sales decreased by $15.4 million, or 1.4%, with international markets showing organic growth of 2.4% driven by price and volume gains[110] - Net earnings for the first six months of fiscal 2025 were $26.9 million, down from $40.8 million in the prior year period, with adjusted net earnings at $45.1 million compared to $56.0 million[107] - Diluted net earnings per share for the first six months of fiscal 2025 were $0.55, down from $0.81 in the prior year period, with adjusted diluted EPS at $0.93 compared to $1.11[107] Expenses and Profitability - The company reported a gross profit margin of 44.1% for GAAP and 44.7% for adjusted measures in Q2 fiscal 2025[103] - Gross profit for the first six months of fiscal 2025 was $447.8 million, a decrease of $8.0 million, or 1.8%, from the prior year period[112] - SG&A expense for the first six months of fiscal 2025 was $208.6 million, or 19.7% of net sales, compared to $210.8 million, or 19.4% of net sales in the prior year[114] - Research and development expense for the first six months of fiscal 2025 was $27.8 million, an increase of $0.3 million, or 1.1%, compared to the prior year[119] - Interest expense associated with debt for the first six months of fiscal 2025 was $39.0 million, a decrease of $1.2 million, or 3.0%, compared to the prior year[122] - General corporate expenses for Q2 fiscal 2025 were $59.2 million, or 10.2% of net sales, compared to $56.5 million or 9.4% in the prior year quarter[141] Taxation - The GAAP effective tax rate for Q2 fiscal 2025 was 29.9%[103] - The effective tax rate for Q2 fiscal 2025 was 29.9%, up from 23.4% in the prior year quarter, with an adjusted rate of 28.5% compared to 23.6%[125] Segment Performance - Wet Shave net sales for Q2 fiscal 2025 were $285.5 million, a decrease of $7.6 million or 2.6%, with an unfavorable currency impact of $5.1 million or 1.7%[129] - Organic net sales in Wet Shave declined 0.9% in Q2 fiscal 2025, with a 3.2% growth in international markets offset by a 5.4% decline in North America[129] - Sun and Skin Care net sales for Q2 fiscal 2025 decreased by $4.7 million or 2.0%, including a $4.5 million unfavorable currency impact[133] - Feminine Care net sales for Q2 fiscal 2025 were $64.1 million, a decrease of $6.4 million or 9.1%, with a 9.9% decline in North America[137] - Wet Shave segment profit for Q2 fiscal 2025 was $46.6 million, an increase of $6.2 million or 15.3%[131] - Sun and Skin Care segment profit for Q2 fiscal 2025 was $50.8 million, a decrease of $3.6 million or 6.6%[135] - Feminine Care segment profit for Q2 fiscal 2025 was $3.1 million, a decrease of $5.6 million or 64.4%[139] Cash Flow and Financing - Cash flow used for operating activities was $70.5 million for the first six months of fiscal 2025, compared to cash flow provided of $56.1 million in the prior year[151] - Net cash used for investing activities was $33.0 million in the first six months of fiscal 2025, up from $19.7 million in the prior year, primarily due to increased capital expenditures of $33.9 million[152] - Net cash provided by financing activities was $72.5 million in the first six months of fiscal 2025, compared to a net cash used of $59.4 million in the prior year[153] - The company repurchased 1.9 million shares of common stock for $65.7 million during the first six months of fiscal 2025[154] - Dividend payments totaled $15.2 million in the first six months of fiscal 2025, slightly down from $15.8 million in the prior year[156] - As of March 31, 2025, total borrowings amounted to $1,468.2 million, an increase from $1,308.5 million as of September 30, 2024[146] - As of March 31, 2025, the company had $228.7 million available under the U.S. Revolving Credit Facility after accounting for borrowings and outstanding letters of credit[147] - The company expects cash flows from operations and borrowing capacity to be sufficient for future working capital requirements for at least the next 12 months[150] - As of March 31, 2025, the company was in compliance with all debt agreement provisions and covenants[149] - A one-percent increase in applicable interest rates would increase annual interest expense on variable-rate debt instruments by approximately $2.2 million[162] Restructuring and Future Outlook - The company expects to incur pre-tax restructuring charges of approximately $33 million in fiscal 2025, with $16.4 million incurred in the first six months[120] - The company utilized non-GAAP measures to provide insights into underlying operational results and future performance[94]