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EDGEWELL PERSONAL CARE Co (EPC)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 2025 net sales rose 3.8% to $537.2M (+2.5% organic) on international strength; GAAP diluted EPS was $(0.66) and adjusted EPS was $0.68, with gross margin down 230 bps and adjusted gross margin down 330 bps .
  • Versus consensus, revenue beat ($537.2M vs $532.8M), but EPS missed ($0.68 vs $0.81) and EBITDA missed (adjusted EBITDA $59.4M vs consensus $70.3M); management cited tariffs, FX, promotions, and transitory items as key headwinds .
  • FY 2026 outlook introduced: adjusted EPS $2.15–$2.55; adjusted gross margin +60 bps; adjusted EBITDA $290–$310M; organic net sales −1% to +2%; free cash flow $115–$145M; adjusted tax rate 21%–22%; gross tariff impact $37M, net $25M after mitigation .
  • Strategic catalyst: definitive agreement to sell Feminine Care to Essity for $340M, proceeds primarily to reduce debt; management expects stranded overhead largely offset by transition income in FY26, and annualized impact of $0.40–$0.50 to adjusted EPS and $35–$45M to adjusted EBITDA, net of transition income .

What Went Well and What Went Wrong

What Went Well

  • International organic net sales +6.9% with broad-based growth across Wet Shave, Feminine Care, and Sun & Skin Care; Oceania and distributor markets double-digit growth, Europe mid-single-digit growth .
  • Innovation and brand momentum: Hawaiian Tropic growth aided by updated formulations and marketing; Billie brand share +90 bps, reaching 15 share at Walmart and 13 at Target; Wet Ones organic +~25% with ~68% share post supply recovery .
  • Productivity: delivered ~270 bps gross savings in FY25; targeting ~310 bps in FY26 (including tariff mitigation) with ongoing manufacturing consolidation and automation to strengthen margin trajectory .

What Went Wrong

  • Margin compression: adjusted gross margin fell 330 bps (to 39.3%) in Q4; drivers include unfavorable mix, tariffs (~100 bps), core inflation, and higher promotions; adjusted operating margin fell to 7.5% .
  • Segment profit declines: Sun & Skin Care segment profit −64.3% YoY despite +11.1% organic sales; Wet Shave −14.8%; Feminine Care −22.6% .
  • Non-GAAP/charges: $51.1M non-cash goodwill impairment in Feminine Care tied to divestiture announcement; restructuring and related costs of $18.9M in Q4 .

Financial Results

Headline P&L and Margins

MetricQ4 2024Q3 2025Q4 2025
Net Sales ($USD Millions)$517.6 $627.2 $537.2
Gross Margin % (GAAP)41.1% 42.8% 38.8%
Adjusted Gross Margin %42.6% 42.8% 39.3%
Operating Margin % (GAAP)3.9% 8.6% (6.8)%
Adjusted Operating Margin %10.8% 12.0% 7.5%
Diluted EPS (GAAP)$0.17 $0.62 $(0.66)
Diluted EPS (Adjusted)$0.72 $0.92 $0.68
Adjusted EBITDA ($USD Millions)$78.9 $96.4 $59.4
A&P as % of Net Sales8.5% 12.8% 9.4%
SG&A % (GAAP)21.1% 16.6% 20.8%
SG&A % (Adjusted)20.5% 16.2% 19.7%

Notes: Adjusted figures per non-GAAP reconciliations. Q4 2025 adjusted gross margin constant currency 40.5% .

Segment Breakdown (Q4)

SegmentNet Sales Q4 2024 ($M)Net Sales Q4 2025 ($M)YoY %Segment Profit Q4 2024 ($M)Segment Profit Q4 2025 ($M)YoY %
Wet Shave$318.2 $321.9 +1.2% $62.2 $53.0 −14.8%
Sun & Skin Care$132.7 $148.0 +11.5% $14.0 $5.0 −64.3%
Feminine Care$66.7 $67.3 +0.9% $6.2 $4.8 −22.6%

KPIs and Balance Sheet

KPIQ4 2024Q3 2025Q4 2025
Cash & Equivalents ($M)$209.1 $199.6 $225.7
Net Debt ($M)$1,090.4 $1,196.3 $1,187.1
Net Debt Leverage (TTM Adjusted EBITDA)—3.7x 3.9x
Interest Expense ($M, quarterly)$17.5 $19.4 $14.8
Operating Cash Flow (FY) ($M)$231.0 —$118.4

Guidance Changes

FY 2026 Outlook (New)

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Reported Net Sales GrowthFY 2026N/A+0.5% to +3.5% New
Organic Net Sales GrowthFY 2026N/A−1% to +2% New
GAAP EPSFY 2026N/A$1.10–$1.50 New
Adjusted EPSFY 2026N/A$2.15–$2.55 New
Adjusted Gross MarginFY 2026N/A+60 bps YoY; includes $37M gross tariffs, $25M net after mitigation New
Adjusted Operating MarginFY 2026N/A−50 bps YoY (70 bps higher A&P, 30 bps higher SG&A) New
Adjusted EBITDAFY 2026N/A$290–$310M New
Adjusted Effective Tax RateFY 2026N/A21%–22% New
CapexFY 2026N/A~3.0%–3.5% of net sales New
Free Cash FlowFY 2026N/A$115–$145M New
Other Expense, netFY 2026N/A~flat; includes $2M interest income New
Restructuring & related costsFY 2026N/A~$49M pre-tax (≈$19M in Q1) New
DividendQ4 2025 declaredN/A$0.15 per share declared, payable Jan 8, 2026 New
Share Repurchase AuthorizationNov 13, 2025Prior plan nearly exhaustedNew $100M authorization New

FY 2025 Guidance Changes (for context vs prior quarters)

MetricPeriodQ2 2025 GuidanceQ3 2025 GuidanceChange
Organic Net SalesFY 2025Flat to +1% ~−1.3% Lowered
Adjusted EPSFY 2025$2.85–$3.05 ~$2.65 Lowered
Adjusted EBITDAFY 2025$329–$341M ~$312M Lowered
Adjusted Gross MarginFY 2025+10 bps (cc +70 bps) −60 bps (cc +30 bps) Lowered
Adjusted Operating MarginFY 2025−65 bps (cc −10 bps) −150 bps (cc −60 bps) Lowered
Adjusted Effective Tax RateFY 2025~20% ~16.5% Lowered
Free Cash FlowFY 2025$130–$140M ~$80M Lowered
Other Expense (Income), netFY 2025Expense ~$3M Expense ~$2M Slightly Raised
Interest ExpenseFY 2025~$74M ~$76M Raised

Earnings Call Themes & Trends

TopicQ2 2025 (Q-2)Q3 2025 (Q-1)Q4 2025 (Current)Trend
Tariffs & inflationGrowing headwinds; incremental tariffs $3–$4M cited in FY25 outlook Tariffs and FX contributing to full-year profit headwinds Gross tariff impact $37M in FY26; $25M net after mitigation; U.S. pricing not assumed, potential upside Headwinds intensifying; mitigation scaling
Supply chain/productivityGross margin expansion via productivity; ~380 bps in Q2 Productivity gains continuing FY25 ~270 bps savings; FY26 ~310 bps target with wet shave consolidation & automation Improving productivity cadence
Sun Care categoryNorth America declines; planned incremental US investment Very weak season; higher promotions; segment profit down Organic +~11%; but margin pressure from closeouts/returns; plan conservative FY26 assumptions Stabilizing volumes; margin pressure remains
Wet Shave / US commercialReinvesting in core brands; US competitiveness work NA wet shave down; sequential share improvement; disposables pressure US org redesign; planogram resets and brand campaigns in H1/H2 2026; consolidation into one automated plant Rebuild in progress
International growthInternational +2.9% in Q2 International growth +2.2% with price gains Durable growth for 4th year; Europe up YoY; Greater China double-digit; mid-single-digit FY26 outlook Durable strength
Feminine Care divestitureN/AN/ADefinitive agreement to sell to Essity; FY26 reporting as discontinued; EPS/EBITDA impact disclosed Portfolio focus shift
Pricing strategySelect intl price actions Category promotions elevated U.S. pricing challenging; selective intl pricing; potential upside if pricing achievable Cautious

Management Commentary

  • “Fiscal 2025 was a year of challenge and transformation…we exited the year with encouraging momentum—marked by improving sales and market share trends and a revitalized brand portfolio.” — Rod Little, CEO .
  • “Our international markets…delivered strong growth for the fourth consecutive year…We believe our international markets are poised to deliver mid-single-digit growth again in fiscal 2026.” — Rod Little .
  • “In fiscal 2026, we will further optimize our North American wet shave business and manufacturing footprint…a single-scaled, highly automated plant…to produce better blades than come out of any factory in the world.” — Rod Little .
  • “Adjusted gross margin rate decreased 330 basis points…driven by unanticipated year-end transitory items…higher inventory adjustments related to our plant consolidation wind-down in Mexico, increased closeout sales and sun care returns, and slightly unfavorable net inflation, tariffs, and pricing.” — Francesca Weissman, CFO .
  • “Adjusted EPS is expected to be in the range of $2.15–$2.55…Adjusted EBITDA $290–$310M…Free cash flow $115–$145M…we intend to focus efforts on reducing debt leverage in the near term.” — Francesca Weissman .

Q&A Highlights

  • Outlook phasing and near-term EPS: Management expects Q1 FY26 adjusted EPS at a loss due to margin pressures and tax phasing; two-thirds of adjusted EBITDA in H2; innovation and pricing more weighted to H2 .
  • Strategic “North Star” and M&A: Focus categories are shave, grooming, sun & skin; portfolio simplification and wet shave footprint investment; proceeds from divestiture provide optionality, high bar for M&A .
  • Gross margin confidence: Q4 shortfall due to transitory items (Mexico wind-down, promotions); productivity and tariff mitigation expected to ramp in H2 FY26; selective pricing in Japan/intl .
  • Use of divestiture proceeds: ~80% of $340M expected to convert to cash after taxes/fees; prioritize debt paydown to move leverage toward ~3x; update after close (expected early calendar 2026) .
  • Sun Care competitive dynamics: Elevated promotions in 2025; inventories “clean” heading into 2026; continued investment behind Hawaiian Tropic and new Banana Boat campaign; conservative planning for season .

Estimates Context

  • Q4 2025 vs Consensus: Revenue beat ($537.2M vs $532.8M*), EPS miss ($0.68 vs $0.81*), EBITDA miss (adjusted EBITDA $59.4M vs EBITDA estimate $70.3M*). Management attributed misses to tariffs, FX, higher trade promotions, and inventory wind-down effects .
  • Next quarter (Q1 2026): Street models a small EPS loss (−$0.17*) and revenue ~$478.4M*, consistent with management’s guidance that Q1 margin/tax headwinds will be elevated .
MetricQ4 2025Q1 2026
Primary EPS Consensus Mean0.81*−0.17*
Revenue Consensus Mean ($USD)532,820,000*478,397,030*
EBITDA Consensus Mean ($USD)70,316,290*33,293,470*
Actual EPS (Adjusted)$0.68 —
Actual Revenue ($USD)$537,200,000 —
Actual Adjusted EBITDA ($USD)$59,400,000 —

Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Mixed quarter: revenue/organic growth were resilient, but earnings and margins undershot amid transitory operational items and macro headwinds; watch execution on tariff mitigation and productivity ramp in H2 FY26 .
  • Portfolio focus catalyst: Feminine Care sale should simplify the story and accelerate deleveraging; updated ex-FemCare guidance will be key to recalibrating earnings power and capital deployment .
  • Sun Care: conservative FY26 planning is prudent; brand investments (HT, Banana Boat) and “clean” inventories set the stage for more balanced risk-reward into the season; monitor promotional intensity and weather variability .
  • Wet Shave: North America turnaround is a 2026–2027 story; manufacturing consolidation and planogram resets should support share stabilization; track U.S. pricing dynamics and execution milestones .
  • Estimates likely to drift lower on EPS/EBITDA near term given Q4 miss and guided H1 pressures; upside lever is tariff mitigation and potential U.S. pricing if the market allows, plus international momentum .
  • Balance sheet: cash $225.7M and new $100M buyback authorization provide flexibility, but priority is leverage reduction; divestiture proceeds expected primarily for debt paydown .
  • Trading setup: watch for Q1 weakness (EPS loss likely) and H2 inflection; near-term volatility around sun season and divestiture close timing; catalysts include FY26 ex-FemCare guidance and evidence of gross margin accretion .