Edgewell Personal Care Q3 Earnings Call Highlights

Key Points

• Organic sales returned to growth: Fiscal Q3 organic net sales rose 1.1%, led by 3% growth in North America across grooming, sun and skin care, and branded wet shave. International sales fell 1.4% because of supply disruptions, weaker seasonal demand and geopolitical pressures.
• Profitability remained pressured: Adjusted EPS held steady at $0.72, while adjusted operating income declined to $53 million from $63.6 million as inflation, promotional spending, unfavorable mix and higher operating expenses offset productivity gains.
• Full-year outlook midpoint maintained: Edgewell narrowed its fiscal 2026 ranges, forecasting flat to 0.5% organic sales growth, adjusted EPS of $1.80–$2.00 and adjusted EBITDA of $250–$260 million. Management expects stronger fourth-quarter results and margin improvement from productivity savings, lower one-time costs and favorable currency.

Edgewell Personal Care NYSE: EPC reported a return to organic sales growth in its fiscal third quarter of 2026, supported by improved North American performance in grooming, sun and skin care, and branded wet shave. The company said adjusted earnings per share and adjusted EBITDA exceeded its internal expectations, while it maintained the midpoint of its full-year outlook.

“Organic net sales returned to growth, driven by a meaningful improvement in North America, where performance exceeded our expectations,” President and Chief Executive Officer Rod Little said during the company’s earnings call. Little said the company expects stronger overall growth in the fiscal fourth quarter, including growth in North America and international markets.

Third-Quarter Sales Trends

Organic net sales from continuing operations increased 1.1% in the quarter. North American organic sales rose 3%, fueled by double-digit grooming growth, mid-single-digit sun and skin care growth, and a return to growth in branded wet shave.

International organic sales declined 1.4%. Chief Financial Officer Fran Weissman attributed the decline to the Middle East conflict, reduced private-label sales caused by temporary supply disruptions, and a weaker-than-anticipated start to the sun season in Europe and Latin America. Weissman said the company expects international sales to return to growth in the fourth quarter as supply-chain conditions improve.

Wet shave organic sales declined 1.9%, as supply disruptions affecting private-label products more than offset growth in branded wet shave. In the U.S. razors and blades category, consumption increased 160 basis points amid heightened promotional activity, according to the company. Edgewell’s branded share declined 40 basis points, which management attributed partly to cycling elevated promotional activity from the prior year and changes to couponing, primarily in drug stores.

Sun and skin care organic sales increased 5%, driven by North American sun care, global grooming growth, and skincare gains. Hawaiian Tropic, Cremo and Wet Ones produced encouraging results, management said, aided by distribution expansion, product innovation and brand spending. Cremo recorded its seventh consecutive quarter of roughly 20% or greater grooming growth.

In U.S. sun care, category consumption declined about 2% during the quarter. Edgewell’s value share declined 60 basis points, as gains at Hawaiian Tropic did not offset declines at Banana Boat. Hawaiian Tropic gained 110 basis points of share in the quarter. Management said year-to-date category trends offer a more complete view given weather-driven seasonal shifts; through mid-July, sun care consumption was up 1.4% and Edgewell’s overall market share was flat.

Margins, Earnings and Cash Flow

Adjusted gross margin declined 30 basis points year over year, in line with Edgewell’s expectations. Higher commodity and input-cost inflation was mostly offset by modest tariff refunds and higher productivity. The company cited approximately 200 basis points of productivity savings and 40 basis points of favorable currency movements, which were more than offset by unfavorable mix, promotional activity, inflation and net tariff effects.

Advertising and promotional expense rose to 14.6% of net sales from 13.6% a year earlier as Edgewell supported campaigns and brand launches. Adjusted selling, general and administrative expense was 18.4% of net sales, compared with 17.6% in the prior-year quarter, reflecting higher incentive compensation and unfavorable currency impacts.

• Adjusted operating income was $53 million, or 9.3% of net sales, compared with $63.6 million, or 11.3% of net sales, a year earlier.
• GAAP diluted earnings per share from continuing operations were $0.26, compared with $0.46 in the prior-year period.
• Adjusted EPS from continuing operations was $0.72, unchanged from a year earlier.
• Adjusted EBITDA was $78.9 million, compared with $81.2 million in the prior-year quarter.

Cash provided by operating activities totaled approximately $47 million in the first nine months of fiscal 2026, compared with about $44 million a year earlier. Third-quarter operating cash flow was approximately $119 million. Edgewell declared a quarterly dividend of $0.15 per share and returned about $7 million to shareholders through dividends.

Full-Year Outlook Narrowed

Edgewell narrowed its fiscal 2026 guidance ranges while maintaining the midpoint of its prior outlook. The company expects stronger fourth-quarter performance, including material gross-margin expansion from productivity savings, the cycling of prior-year one-time costs and favorable foreign exchange.

• Organic net sales: flat to growth of 50 basis points.
• Adjusted EPS: $1.80 to $2.00.
• Adjusted EBITDA: $250 million to $260 million.
• Adjusted free cash flow, excluding Feminine Care divestiture effects: approximately $80 million to $110 million.
• Adjusted net debt leverage at year-end: 3.3 times to 3.4 times.

Little said Edgewell continues to invest in priority brands while pursuing a simplified operating model, lower costs and greater use of technology, analytics and AI-enabled capabilities. The company is also advancing a wet shave manufacturing consolidation that management described as its largest operational initiative since becoming a standalone company in 2015.

While the consolidation created supply disruption that lasted longer than expected in certain international markets, Little said the company is making progress and expects the project to improve production volumes, service levels, productivity, margins, working capital and free cash flow over time. Edgewell said it plans to provide additional detail on fiscal 2027 priorities during its year-end call in November.

About Edgewell Personal Care (NYSE:EPC)

Edgewell Personal Care Inc, incorporated in 2015 and headquartered in Shelton, Connecticut, is a global consumer products company specializing in personal care, sun care, shaving and feminine care solutions. The company emerged as a spin-off from Energizer Holdings' personal care division, listing its shares on the New York Stock Exchange under the ticker “EPC.” Edgewell's portfolio comprises well-known brands that cater to everyday personal grooming and protection needs.

In the shaving segment, Edgewell markets razors and refill blades under brands such as Schick and Wilkinson Sword, targeting both men's and women's grooming categories.

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