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EDGEWELL PERSONAL CARE Co (EPC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 FY25 delivered mixed results: net sales $478.4M (-2.1% YoY), organic -1.3%, GAAP EPS $(0.04), adjusted EPS $0.07; constant-currency gross margin expanded, but reported margins and earnings were pressured by FX headwinds .
  • International remained the growth engine (+2% organic) with share gains in Australia/Mexico Sun Care and solid Wet Shave; North America declined ~4% on Fem Care and Women’s Systems softness .
  • Guidance largely maintained on an organic basis but revised lower for reported metrics on stronger USD: FX now a 160 bps headwind to sales (vs +70 bps prior), adjusted gross margin +55 bps (vs +75 bps), adjusted EPS/EBITDA to the lower end of the ranges; ~70% of adjusted net earnings now expected in H2 .
  • Near-term catalysts: Sun Care season ramp (order phasing shift from Q2 into Q3), national rollout of Billie Body, mineral restage and Banana Boat baby innovation, with management intent to maintain brand investments despite FX pressure .

What Went Well and What Went Wrong

What Went Well

  • International momentum: fifth consecutive quarter of organic growth; international now ~40% of revenue with strong share in Australia/Mexico Sun Care and growth in Japan Wet Shave (Schick FIRST TOKYO scaling quickly) .
  • Productivity and cost excellence: delivered ~340 bps productivity savings; constant-currency gross margin +80 bps, enabling incremental brand investments despite FX .
  • Grooming/Direct brands: Billie gained 230 bps share in women’s shave, now ~15% at Walmart and >10% nationally; Cremo organic sales +20%; Wet Ones rebounding (+15% organic) as in-stock improves .
    • “We will stay leaned in… we’ve invested in supporting our brands… we think operationally that’s the right thing to do” — Rod Little on maintaining brand spend despite FX .

What Went Wrong

  • FX impact intensified: ~$0.17 per share unfavorable in Q1; adjusted EBITDA hit ~$11M; reported gross margin down 60 bps despite constant-currency accretion .
  • North America softness: Women’s Systems and Fem Care declines; U.S. razor/blades consumption down 80 bps; company market share down ~100 bps, consistent with 26- and 52-week trends .
  • Fem Care transition drag: net sales ~-12% as pads conversion from Stayfree to Carefree took longer; category remains highly promotional; adjusted operating income down YoY .
    • “It’s taking us longer than we anticipated to transition consumers from Stayfree pads into Carefree pads” — Rod Little .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Net Sales ($USD Millions)$647.8 $517.6 $478.4
Organic Net Sales Growth (%)+0.6% -2.8% -1.3%
GAAP Diluted EPS ($)$0.98 $0.17 $(0.04)
Adjusted EPS ($)$1.22 $0.72 $0.07
Gross Margin % (GAAP)44.3% 41.1% 40.1%
Adjusted Gross Margin % (Constant Currency)44.8% 42.8% 41.5%
Adjusted EBITDA ($USD Millions)$117.2 $78.9 $45.9
A&P as % of Net Sales11.8% 8.5% 10.5%
Adjusted SG&A as % of Net Sales16.2% ~21.1–21.5% GAAP; adjusted +20 bps YoY to 21.2% 21.2% adjusted

Segment Net Sales and Profit

SegmentQ3 2024 Net Sales ($M)Q3 2024 Segment Profit ($M)Q4 2024 Net Sales ($M)Q4 2024 Segment Profit ($M)Q1 2025 Net Sales ($M)Q1 2025 Segment Profit ($M)
Wet Shave$316.3 $47.6 $318.2 $62.2 $294.5 $46.6
Sun & Skin Care$256.9 $64.2 $132.7 $14.0 $120.6 $(3.4)
Feminine Care$74.6 $6.6 $66.7 $6.2 $63.3 $3.2

Additional KPIs

KPIQ3 2024Q4 2024Q1 2025
Cash & Equivalents ($M)$196.1 $209.1 $175.5
Net Cash from/used Ops ($M)$157.3 (9M) $231.0 (FY) $(115.6)
Net Debt ($M)$1,115.7 $1,090.4 $1,292.3
Net Debt Leverage (x)~3.1x (company commentary) 3.1x 3.8x
Share Repurchases ($M)$9.9 $18.3 $30.3
Dividend/Share ($)$0.15 $0.15 $0.15

Guidance Changes

MetricPeriodPrevious Guidance (Nov 2024)Current Guidance (Feb 2025)Change
Organic Net Sales GrowthFY251%–3% 1%–3% (unchanged) Maintained
Reported FX Impact on SalesFY25+70 bps -160 bps Lowered (FX headwind)
Adjusted Gross MarginFY25+75 bps; +90 bps at CC +55 bps; +90 bps at CC Lowered (reported), CC unchanged
Adjusted Operating MarginFY25+40 bps; +50 bps at CC +10 bps; +50 bps at CC Lowered (reported), CC unchanged
Adjusted EPSFY25$3.15–$3.35 (incl. ~$0.18 FX headwind) Toward lower end of $3.15–$3.35 (incl. ~$0.36 FX headwind) Lowered (FX headwind increased)
GAAP EPSFY25$2.59–$2.79 $2.54–$2.74 Lowered
Adjusted EBITDAFY25$356–$368M (incl. ~$11M FX headwind) Toward lower end of $356–$368M (incl. ~$23M FX headwind) Lowered (FX headwind increased)
Other Expense (Income), netFY25Expense ~$7M Income ~$1M (incl. ~$3M interest income) Improved
Interest ExpenseFY25~$73M ~$74M Slightly higher
Earnings PhasingFY25~two-thirds in H2 ~70% in H2 More H2-weighted
CapexFY25~2.5%–3.0% of net sales ~2.5%–3.0% of net sales Maintained
Free Cash FlowFY25~$185M ~$185M Maintained
Dividends/BuybacksFY25~$90M buybacks reflected ~$90M buybacks reflected Maintained
TariffsFY25Not contemplated Not contemplated (rapidly evolving) Maintained exclusion

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
International growthQ3: Strong price/volume; Sun & Grooming up; leadership changes to accelerate local innovation . Q4: International +7% FY, consistent execution .Fifth consecutive quarter of organic growth; share gains in AU/MX Sun; Japan Wet Shave innovation (Schick FIRST TOKYO) scaling .Positive and durable
Supply chain/serviceQ4: Supply constraints (Edge preps, Wet Ones fire) but improving; targeting world-class supply chain .Service levels and in-stock improved; unit fill rates above targets; prepared for sun season .Improving
Pricing/promoQ3: Strategic revenue management and pricing drove margin gains . Q4: U.S. women’s shave and Fem Care highly promotional .U.S. remains promotional (women’s shave, Fem Care); pricing mostly outside U.S., executed; revenue management over list price near term .Promotional intensity persists
Sun Care categoryQ3: Early season weather choppy; innovation (Banana Boat 360) helps . Q4: U.S. consumption down, weather dampened late season .Order timing shift from Q2 to Q3; bullish on season; mineral restage; Banana Boat baby line; AU/MX share wins .Near-term phasing; constructive outlook
Fem Care transitionQ3/Q4: Category healthy but pads weakness; conversion to Carefree ongoing; promo heavy .Pads conversion slower than expected; liners/tampons mixed; sequential improvement expected through easier comps and continued conversion .Gradual recovery expected
FX/macroQ4: Volatile FX expected headwind in FY25 .FX headwinds worsened: EPS headwind ~$0.36 for FY; reported margins reduced vs CC; outlook revised primarily for FX .Adverse FX intensifies
Innovation/R&DQ3/Q4: Banana Boat 360, Wilkinson Sword relaunch, local market model .Faster consumer-centric innovation; Schick FIRST TOKYO; Bulldog range expansion; Sun Care formats; Billie Body national rollout .Accelerating pipeline
Tariffs/RegulatoryQ4: Not contemplated in outlook .Outlook excludes U.S. or retaliatory tariffs; monitoring .Watch item

Management Commentary

  • Strategy and execution: “Despite the worse than planned foreign exchange headwinds… we still expect to deliver organic net sales, adjusted EBITDA and adjusted earnings per share within our previously provided outlook ranges” — Rod Little .
  • International excellence: “Now representing 40% of our global business, we've never been in a better position internationally” — Rod Little .
  • Brand investment posture: “One thing we’re not going to do is cut our brand investment as a way to offset [FX]… we’re going to keep that in” — Rod Little .
  • Operational focus: “Productivity savings were 340 basis points… tailwinds for approximately 80 bps constant currency gross margin accretion” — Dan Sullivan .
  • Outlook revisions driver: “We have updated our outlook… primarily to reflect the impact of unfavorable currency movements… on a constant currency basis, our outlook is essentially unchanged” — CFO Fran Weissman .

Q&A Highlights

  • Fem Care conversion: Transition from Stayfree pads to Carefree pads taking longer; sequential improvement expected through 2025 on easier comps and continued consumer conversion .
  • Sun Care order phasing: Easter timing pushes shipments from Q2 to Q3; ~$6–$7M impact sliding into Q3; underlying consumption outlook constructive .
  • FX mitigation: Team focusing on revenue management, mix, and productivity; not committing to price hikes now; brand investments to be maintained .
  • Grooming and Billie Body: National rollout with strong retailer support (Target/Walmart); core shave business remains a credentialer; Billie refills #1 units across top 5 retailers .
  • Capital allocation/M&A: Continued deleveraging; optionality for M&A but buybacks attractive given valuation; leverage targeted ~3x by year-end .

Estimates Context

  • S&P Global consensus for Q1 FY25 EPS and Revenue could not be retrieved at this time due to data access limits; therefore, beat/miss vs consensus is unavailable. Values will be updated when S&P Global access is restored.

Key Takeaways for Investors

  • FX is the primary swing factor in FY25: despite constant-currency stability, stronger USD has reduced reported margins and pushes adjusted EPS/EBITDA to the low end of guidance; expect ~70% earnings in H2 .
  • International and Right-to-Win categories anchor the growth thesis: continued share gains and innovation in Sun Care (AU/MX) and Wet Shave (Japan), plus Billie/Cremo momentum, support mid-single-digit growth in ~70% of the portfolio .
  • North America recovery hinges on Fem Care and Women’s Systems: watch sequential improvements from pads conversion and reduced supply chain constraints; promotional intensity remains a headwind .
  • Sun Care setup is constructive: order phasing shifts into Q3, innovation pipeline (mineral restage, Banana Boat baby) and robust leisure travel underpin potential share and revenue gains in peak season .
  • Productivity and cost discipline provide downside protection: ~340 bps savings and constant-currency gross margin accretion offset promotional and inflation pressures; management unwilling to cut brand investments .
  • Capital allocation remains supportive: buybacks ($90M planned) and dividend sustained; deleveraging to ~3x by year-end improves flexibility for selective M&A .
  • Near-term trading: H1 softer on FX and phasing; positioning for Q3 peak Sun season and H2 earnings weighting could be a catalyst window, contingent on FX stabilization and execution on innovation rollouts .

Notes:

  • All quantitative data and statements are sourced from the company’s Q1 FY25 press release, Form 8-K, and earnings call transcripts, as cited throughout.
  • Consensus estimates from S&P Global are currently unavailable; beat/miss assessment will be provided when access is restored.