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EDGEWELL PERSONAL CARE Co (EPC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was below expectations: organic net sales down 4.2% to $627.2M, GAAP EPS $0.62 and adjusted EPS $0.92; weakness stemmed from very weak Sun Care seasons in North America and certain LatAm markets, plus FX and tariffs headwinds .
  • Results missed Wall Street consensus: Revenue $627.2M vs $653.6M*, Adjusted EPS $0.92 vs $0.99*, and Adjusted EBITDA $96.4M vs $102.4M*; management cut FY25 guidance across EPS, EBITDA, margins, and free cash flow, while lowering organic sales to approximately -1.3% .
  • International remained resilient with +2.2% organic growth and strengthened market shares; U.S. saw share improvements in Hawaiian Tropic, Hydro Silk, and Cremo supported by stepped-up investments, but elevated A&P and trade spend weighed on profit .
  • FY25 outlook: Adjusted EPS now ~$2.65 (from $2.85–$3.05), Adjusted EBITDA ~$312M (from $329–$341M), adjusted operating margin down ~150bps, and FCF ~$80M (from $130–$140M); currency headwind increased, tariffs added costs, and investment levels stay elevated into Q4 .
  • Stock reaction catalysts: broad guidance cut, sun-season shortfall, tariff/FX commentary, and visible U.S. brand-share gains that may support medium-term re-rating as 2026 plans firm up .

What Went Well and What Went Wrong

What Went Well

  • International performance: another quarter of growth and strengthened share; management highlighted 2.2% organic growth internationally, mid- to high-single-digit multi-year trajectory, and strong execution in Greater China, Oceania, and Europe .
  • Brand activation success: “Tana Sutra” campaign for Hawaiian Tropic drove 18% dollar consumption growth and +150bps share in a declining U.S. sun category; Cremo posted ~35% consumption growth, and Hydro Silk share improved sequentially with modernized activation .
  • Productivity and supply chain: realized ~270bps gross savings; strong unit fill and OTIF rates supported mitigation of tariff/FX pressures and elevated brand investments .

What Went Wrong

  • Sun Care seasonality and weather: materially weak U.S. and Mexico/Puerto Rico sun consumption during Memorial Day–July 4 window created ~$25M underperformance in Q3, lowering mix and increasing trade spend .
  • Tariffs and currency: FY25 currency headwind increased to ~$29M on EBITDA and ~$0.46/share on EPS; tariffs expected to be ~$5M P&L hit in FY25 (cash ~$10M), with gross tariffs potentially $40–$50M annualized absent mitigation .
  • Feminine Care and North America softness: North America organic sales declined ~8% with retailer destocking (especially tampons); Feminine Care net sales down 10.5% and segment profit down 31.8% y/y .

Financial Results

Consolidated Quarterly Performance vs Prior Periods

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$478.4 $580.7 $627.2
GAAP Diluted EPS ($)$(0.04) $0.60 $0.62
Adjusted EPS ($)$0.07 $0.87 $0.92
GAAP Gross Margin (%)40.1% 44.1% 42.8%
Adjusted Operating Income ($USD Millions)$27.0 $76.7 $75.1
Adjusted Operating Margin (%)5.6% 13.2% 12.0%
Adjusted EBITDA ($USD Millions)$45.9 $99.3 $96.4

Q3 2025 Actual vs Consensus

MetricActualConsensusSurprise
Revenue ($USD Millions)$627.2 $653.6*Miss
EPS ($) – Adjusted$0.92 $0.99*Miss
Adjusted EBITDA ($USD Millions)$96.4 $102.4*Miss

Values with * retrieved from S&P Global.

Year-over-Year Q3 Comparison

MetricQ3 2024Q3 2025YoY Change
Revenue ($USD Millions)$647.8 $627.2 -3.2%
GAAP Diluted EPS ($)$0.98 $0.62 -36.7%
Adjusted EPS ($)$1.22 $0.92 -24.6%
Adjusted Operating Income ($USD Millions)$94.8 $75.1 -20.8%
Adjusted EBITDA ($USD Millions)$117.2 $96.4 -17.7%

Segment Breakdown (Q3 2025 vs Q3 2024)

SegmentNet Sales Q3 2024 ($M)Net Sales Q3 2025 ($M)YoY %Segment Profit Q3 2024 ($M)Segment Profit Q3 2025 ($M)YoY %
Wet Shave$316.3 $317.0 +0.2% $47.6 $44.1 -7.4%
Sun & Skin Care$256.9 $243.4 -5.3% $64.2 $46.0 -28.3%
Feminine Care$74.6 $66.8 -10.5% $6.6 $4.5 -31.8%
Total$647.8 $627.2 -3.2% $118.4 $94.6 -20.1%

KPIs and Cash/Capital

KPIQ1 2025Q2 2025Q3 2025
A&P ($M; % of Net Sales)$50.3; 10.5% $65.5; 11.3% $80.4; 12.8%
Adjusted EBITDA ($M)$45.9 $99.3 $96.4
Cash & Equivalents ($M)$175.5 $170.1 $199.6
Net Debt ($M)$1,292.3 $1,290.2 $1,196.3
Share Repurchases ($M)$30.3 $35.4 $24.5
Dividends ($M)$7.9 $7.3 $7.2

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025 PR)Current Guidance (Q3 2025 PR)Change
Organic Net SalesFY 2025Flat to +1% ~-1.3% Lowered
Currency impact on Reported SalesFY 2025-10 bps +10 bps Raised
GAAP EPSFY 2025$2.09–$2.29 ~$1.73 Lowered
Adjusted EPSFY 2025$2.85–$3.05 ~$2.65 Lowered
Adjusted Gross Margin (reported)FY 2025+10 bps y/y ~-60 bps y/y Lowered
Adjusted GM (constant currency)FY 2025+70 bps +30 bps Lowered
Adjusted Operating Margin (reported)FY 2025~-65 bps ~-150 bps Lowered
Adjusted Operating Margin (constant currency)FY 2025~-10 bps ~-60 bps Lowered
Adjusted EBITDA ($M)FY 2025$329–$341 ~$312 Lowered
Other (Income) Expense ($M)FY 2025Expense of $3 Expense of $2 Raised
Interest Expense ($M)FY 2025~$74 ~$76 Raised (expense)
Adjusted Effective Tax RateFY 2025~20% ~16.5% Lowered
D&A ($M)FY 2025~$87 ~$88 Raised
Capex (% of Sales)FY 20252.5%–3.0% 2.5%–3.0% Maintained
Free Cash Flow ($M)FY 2025$130–$140 ~$80 Lowered
Share Repurchases ($M)FY 2025~$90 ~$90 Maintained

Earnings Call Themes & Trends

TopicQ1 2025 (prior mentions)Q2 2025 (prior mentions)Q3 2025 (current)Trend
TariffsWarned of evolving U.S./retaliatory tariffs; not included in Q1 outlook Added ~$3–$4M incremental tariffs to outlook FY25 P&L hit ~$5M; cash ~$10M; gross tariffs $40–$50M annualized absent mitigation; pursuing sourcing/footprint optimization Worsening headwind; mitigation ongoing
FXStrengthening USD drove top/bottom-line headwinds; raised FX EPS headwind to $0.36 FX headwind ~$22M EBITDA, ~$0.35 EPS FX headwind increased to ~$29M EBITDA and ~$0.46 EPS Worsening
Sun CareGrowth in Q1 driven by Wet Ones/grooming; North America Sun down North America Sun Care declines; cautious H2 Memorial Day–July 4 adverse weather; U.S. category -2%; ~$25M shortfall vs plan; expecting Q4 rebound ~4% consumption Acute mid-season weakness; improving into Q4
U.S. Commercial ResetN/AInvestment stance in Wet Shave & Sun Care New U.S. organization under Jess; stepped-up A&P/trade investments driving share improvements (Hawaiian Tropic, Hydro Silk, Cremo) Accelerating execution/investment
International Growth+2.0% organic Q1; sustained multi-year growth +2.9% organic Q2; gross margin expansion +2.2% organic; “thirteenth growth quarter in last 14” with broad share gains Consistent strength
Free Cash FlowFY25 FCF guided $185M Lowered to $130–$140M Lowered to ~$80M; drivers: lower earnings, higher working capital incl. tariffs/inventory Lowered materially

Management Commentary

  • “This was a challenging quarter… significantly impacted by very weak Sun Care seasons in North America and certain Latin American markets… tariffs and foreign exchange contributing to full-year profit headwinds.” — Rod Little, CEO .
  • “We saw improved market share performance from… Hawaiian Tropic, Cremo, and Hydro Silk… investments weigh on profitability in the near term, [but] better position our portfolio for a stronger 2026 and beyond.” — Rod Little, CEO .
  • “Operationally, productivity savings remain an important lever in gross margin performance, delivering 270 basis points of tailwinds in the quarter.” — Dan Sullivan, COO .
  • “We are orchestrating significant change across our North America commercial operations… we will continue to press forward on investment… setting us up for long term success.” — Rod Little, CEO .

Q&A Highlights

  • Free cash flow and leverage: Management attributed FCF cut ~2/3 to lower earnings/FX/tariffs and ~1/3 to working capital (higher sun inventory, tariff pre-buys, Mexican consolidation); reiterated structural ability to generate strong cash flow over time .
  • Q4 organic growth drivers: International step-up via pricing, NPD (incl. Billie), and private brand tenders; North America improvement from Sun Care rebound (~4%), Fem Care low-single-digit growth, and Wet Ones cycling fire-related impacts .
  • Sun Care inventory/replenishment: Expecting flat-to-slightly-down season overall, with mid-single-digit upturn in final stretch; supply chain proximity aids faster replenishment; Banana Boat more weather-sensitive vs Hawaiian Tropic’s branding momentum .
  • Wet Shave dynamics and Billie body: U.S. women’s razor space remains highly promotional; Hydro Silk sequentially improved; Billie’s body range under review after mixed retailer thresholds, but Billie’s core shave share now ~11% nationally with gains at Walmart/Target .

Estimates Context

  • Q3 2025 compared to consensus: Revenue $627.2M vs $653.6M*, Adjusted EPS $0.92 vs $0.99*, Adjusted EBITDA $96.4M vs $102.4M* — broad misses driven by Sun Care weakness, higher trade spend, FX/tariff headwinds, and elevated A&P .
  • Consensus backdrop: Target Price Consensus Mean ~$23.86*; recommendation text unavailable via S&P Global in this pull. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term pressure persists: broad Q3 misses vs consensus and a material FY25 guidance cut across EPS/EBITDA/margins/FCF underscore transitory but significant Sun Care/FX/tariff headwinds and elevated U.S. investment .
  • Resilience internationally and share gains domestically: International growth and share strength continue; U.S. brand-share trends (Hawaiian Tropic, Hydro Silk, Cremo) improving, suggesting investments are working despite near-term margin dilution .
  • Tariff/FX risks raised: Currency headwind lifted to $29M EBITDA/$0.46 EPS and tariffs could be $40–$50M annualized gross absent mitigation; expect continued supply chain actions and pricing to offset over time .
  • Q4 setup improving: Management tracking to ~2.5% organic growth on a constant currency basis with flat adjusted GM and ~2% adjusted EBITDA growth despite higher brand spend and tariff headwinds; July performance on track .
  • Cash discipline vs investment: FCF lowered to $80M due to earnings/working capital/tariffs; repurchases ($90M FY25) maintained, dividend steady; watch leverage trajectory and H2 cash conversion .
  • 2026 focus: Management confidence in returning to 2–3% growth algorithm post U.S. transformation; monitor November update for specifics and tariff policy clarity .
  • Trading lens: Narrative likely driven by weather-normalized Sun Care recovery into Q4, evidence of U.S. share sustainment with stepped-up A&P, and any relief or clarity on tariffs/FX; medium-term re-rating hinges on U.S. margin recapture and cash flow normalization .