EDGEWELL PERSONAL CARE Co (EPC): Results of Operations and Financial Condition
EDGEWELL PERSONAL CARE Co (EPC) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Edgewell Personal Care Company 6 Research Drive Shelton, Conn 06484 FOR IMMEDIATE RELEASE Company Contact Chris Gough Vice President, Investor Relations 203-944-5706 Chris.Gough@Edgewell.com Edgewell Personal Care Announces Third Quarter Fiscal 2026 Results Organic N
How this was made
The 30-second read
Why it matters
Traders can update models for Edgewell’s near-term trajectory using the reported organic sales trend, North America improvement, margin movements, restructuring costs, and the company’s statement that the full-year outlook was narrowed while adjusted EPS and adjusted EBITDA midpoints were unchanged.
Market read
Organic net sales returned to growth and North America improved meaningfully, but gross margin declined and GAAP EPS dropped year over year; the company also narrowed its full-year outlook.
What to watch
International organic sales declined due to temporary disruptions and manufacturing consolidation; investors may discount the improvement as non-recurring while focusing on tariff and mix headwinds.
Organic Net Sales Returned to Growth; North America Performance Improved Meaningfully; Adjusted EPS and Adjusted EBITDA Exceeded Expectations; Full Year Outlook Narrowed; Mid-points for Adjusted EPS and Adjusted EBITDA Remain Unchanged
Organic net sales returned to growth and North America improved, while adjusted EPS held flat year over year. However, gross margin, adjusted operating income, GAAP earnings per share and adjusted EBITDA declined, and the company narrowed several full-year outlook ranges.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $570.1 million | – | 1.7% |
| Organic net salesnon-GAAP | $6.1 million | – | 1.1% |
| Favorable impact from currency movements on net salesother | $3.6 million | – | 0.6% |
| Gross profitGAAP | $242.5 million | – | – |
| Gross margin as a percent of net salesGAAP | 42.5% | – | decrease of 210-basis points |
| Adjusted gross margin as a percent of net salesnon-GAAP | 44.5% | – | decreased 30-basis points |
| Advertising and sales promotion expenseGAAP | $83.2 million | – | increase of $7.2 million |
| Advertising and sales promotion expense as a percent of net salesGAAP | 14.6% of net sales | – | – |
| Selling, general and administrative expenseGAAP | $108.3 million | – | – |
| Selling, general and administrative expense as a percent of net salesGAAP | 19.0% of net sales | – | – |
| Adjusted SG&A as a percent of net salesnon-GAAP | 18.4% of net sales | – | – |
| Pre-tax restructuring and related costsGAAP | $24.5 million | – | – |
| Operating incomeGAAP | $25.0 million | – | – |
| Operating income as a percent of net salesGAAP | 4.4% of net sales | – | – |
| Adjusted operating incomenon-GAAP | $53.0 million | – | – |
| Adjusted operating income as a percent of net salesnon-GAAP | 9.3% of net sales | – | – |
| Interest expense associated with debtGAAP | $16.7 million | – | – |
| Other (income) expense, netGAAP | income of $9.7 million | – | – |
| Adjusted other (income) expense, netnon-GAAP | income of $9.7 million | – | – |
| Effective tax rate for the first nine months of fiscal 2026GAAP | (17.0)% | – | – |
| Adjusted effective tax rate for the first nine months of fiscal 2026non-GAAP | 26.3% | – | – |
| Net earnings from continuing operationsGAAP | income of $12.3 million | – | – |
| Diluted net earnings per share from continuing operationsGAAP | $0.26 per diluted share | – | – |
| Adjusted net earnings from continuing operationsnon-GAAP | $33.5 million | – | – |
| Adjusted EPSnon-GAAP | $0.72 per share | – | – |
| Adjusted EBITDAnon-GAAP | $78.9 million | – | – |
| Net cash provided by operating activities for the nine months ended June 30, 2026GAAP | $47.1 million | – | – |
| Adjusted net debt leverage rationon-GAAP | 3.7x | – | – |
| Wet Shave segment profitother | decreased $9.2 million | – | 20.9% |
| Wet Shave organic segment profitnon-GAAP | decreased $10.9 million | – | 24.7% |
| Sun and Skin Care segment profitother | increased $0.2 million | – | 0.4% |
| Sun and Skin Care organic segment profitnon-GAAP | decreased $0.7 million | – | 1.6% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Wet ShaveOrganic net sales decreased $6.1 million or 1.9%, as growth in the branded business was more than offset by lower Private Label sales related to temporary supply constraints in North America and certain international markets. | decreased $4.2 million | – | 1.3% |
| Sun and Skin CareOrganic net sales increased $12.2 million, or 5.0%, driven by mid-single digit growth in Sun Care in North America and strong global Grooming and Skin Care performance, partly offset by Sun Care declines in international markets. | increased $13.9 million | – | 5.7% |
Full Fiscal Year 2026 outlook
- RevenueReported net sales are expected to increase in the range of approximately 1.3% to 1.8%
- Gross marginAdjusted gross margin is expected to increase approximately 20-basis points
- Tax rateAdjusted effective tax rate is expected to be approximately 22% to 23%
- NoteOrganic net sales are expected to be in the range of a flat to 0.5%.
- NoteGAAP EPS is expected to be in the range of flat to $0.20.
- NoteAdjusted EPS is expected to be in the range of $1.80 to $2.00.
- NoteAdjusted operating margin is expected to decrease approximately 80-basis points, reflecting 70-basis points from higher A&P investment and 30-basis points from increased SG&A expense.
- NoteAdjusted EBITDA is expected to be in the range of $250 to $260 million.
- NoteOther income/expense, net is expected to be approximately $26 million income.
- NoteInterest expense associated with debt is expected to be approximately $70 million.
- NoteCapital expenditures are expected to be in the range of approximately 3.0% to 3.5% of net sales.
- NoteAdjusted free cash flow is expected to be approximately $80 to $110 million.
- NoteAdjusted net debt leverage is expected to be approximately in the range of 3.3x to 3.4x at fiscal year end.
- NoteOutlook includes an estimated 130-basis point positive impact from foreign currency changes.
Capital returns
- During the third quarter of fiscal 2026, the Company paid dividends totaling $7.0 million to stockholders.
- The Board of Directors declared a quarterly cash dividend of $0.15 per common share on August 5, 2026.
- The dividend will be payable on October 8, 2026 to shareholders of record at the close of business on September 9, 2026.
- As of June 30, 2026, the Company had approximately $85 million available for share repurchase in the future under the Board’s 2025 authorization.
What drove it
- North America organic sales increased 3.0%, driven by volume growth across Sun, Skin Care and Grooming, reflecting improving execution, increased distribution and continued strength across several priority brands.
- International organic sales declined 1.4%, primarily reflecting temporary disruption associated with the conflict in the Middle East and short-term supply chain impacts related to the Wet Shave manufacturing consolidation, partly offset by growth in Grooming and several key international markets.
- Productivity savings of approximately 200-basis points and 40-basis points of favorable currency movements were more than offset by 160-basis points of core inflation and net tariffs and 110-basis points of unfavorable mix and promotional levels, net of pricing.
- Adjusted net earnings were inclusive of a $0.04 favorable currency impact.
- Adjusted EBITDA was inclusive of a $2.1 million favorable currency impact.
- Interest expense declined as a result of lower borrowing levels on the U.S. revolving credit facility following paydown with proceeds of the Feminine Care divestiture.
- Current-quarter other income included $7.7 million of Transition Services Agreement income.
Concerns
- Gross margin as a percent of net sales decreased 210-basis points to 42.5%, and adjusted gross margin decreased 30-basis points to 44.5%.
- Operating income declined to $25.0 million from $45.0 million, while adjusted operating income declined to $53.0 million from $63.6 million.
- GAAP diluted net earnings per share declined to $0.26 from $0.46.
- Wet Shave organic net sales decreased 1.9%, with lower Private Label sales tied to temporary supply constraints.
- International organic sales declined 1.4% amid Middle East conflict disruption and Wet Shave manufacturing-consolidation supply-chain impacts.
- The company narrowed its outlook for GAAP EPS to flat to $0.20 and expects adjusted operating margin to decrease approximately 80-basis points.
What to watch
- Whether the anticipated stronger fourth quarter delivers the company's full-year organic net-sales range of a flat to 0.5%.
- The effect of higher A&P investment and increased SG&A expense on the expected approximately 80-basis point decline in adjusted operating margin.
- The pace of resolution for Wet Shave supply constraints and manufacturing-consolidation impacts.
- The persistence of international disruption related to the conflict in the Middle East.
- Delivery against adjusted free cash flow guidance of approximately $80 to $110 million and adjusted net debt leverage guidance of approximately 3.3x to 3.4x at fiscal year end.
Balance sheet and cash flow
- The third quarter ended with $397.1 million in cash on hand.
- The Company had access to $418.8 million under its U.S. revolving credit facility.
- Net cash provided by operating activities on a consolidated basis, inclusive of continuing and discontinued operations, was $47.1 million for the nine months ended June 30, 2026, compared to $44.3 million in the prior year period.
- The increase in cash provided by operating activities was largely driven by changes in net working capital.
- The adjusted net debt leverage ratio was 3.7x.
Analysis
Edgewell returned to reported and organic sales growth in the third fiscal quarter. Net sales were $570.1 million, up 1.7%, while organic net sales increased 1.1%. North America organic sales increased 3.0% on volume growth across Sun, Skin Care and Grooming, improving execution, increased distribution and strength in priority brands. That recovery was partially offset by a 1.4% decline in international organic sales, which the company attributed to Middle East conflict disruption and short-term supply-chain impacts from the Wet Shave manufacturing consolidation.
The mix of segment performance was uneven. Sun and Skin Care net sales increased $13.9 million, or 5.7%, with organic net sales up $12.2 million, or 5.0%, supported by North American Sun Care and global Grooming and Skin Care. Wet Shave net sales decreased $4.2 million, or 1.3%, and organic net sales decreased $6.1 million, or 1.9%, as branded growth was outweighed by lower Private Label sales affected by supply constraints. Wet Shave segment profit decreased $9.2 million, or 20.9%, while Sun and Skin Care segment profit increased $0.2 million, or 0.4%.
Profitability remained under pressure despite sales growth. Gross profit was $242.5 million compared with $250.1 million, and gross margin declined 210-basis points to 42.5%. Adjusted gross margin declined 30-basis points to 44.5%, as productivity savings and favorable currency were more than offset by core inflation and net tariffs, as well as unfavorable mix and promotional levels. Higher A&P and SG&A also weighed on results. Operating income was $25.0 million versus $45.0 million, adjusted operating income was $53.0 million versus $63.6 million, and adjusted EBITDA was $78.9 million versus $81.2 million. GAAP diluted EPS declined to $0.26 from $0.46, while adjusted EPS was unchanged at $0.72.
Capital liquidity was supported by $397.1 million in cash on hand and $418.8 million of available U.S. revolving credit facility capacity. Nine-month consolidated operating cash flow was $47.1 million compared with $44.3 million, with the increase largely driven by changes in net working capital. The company paid $7.0 million of dividends during the quarter and declared a $0.15 per common share dividend. It also had approximately $85 million available under its 2025 repurchase authorization.
Full-year underlying expectations were described as intact, but ranges were narrowed. Reported net sales are now expected to increase approximately 1.3% to 1.8%, organic net sales are expected to range from flat to 0.5%, and adjusted EPS guidance is $1.80 to $2.00. Adjusted EBITDA is expected to be $250 to $260 million. The main outlook watchpoint is margin: adjusted gross margin is expected to increase approximately 20-basis points, but adjusted operating margin is expected to decrease approximately 80-basis points due to higher A&P investment and increased SG&A expense.
Management, verbatim
Our third quarter results represent an important step forward in our fiscal 2026 progression, with organic net sales returning to growth, meaningful improvement in North America, and adjusted EPS and adjusted EBITDA ahead of expectations.
Rod Little, President and Chief Executive Officer
At the beginning of the year, we anticipated that fiscal 2026 would be a back-half story, and based on our current outlook, we remain on track to deliver on that commitment.
Rod Little, President and Chief Executive Officer
Not in the filing
stated, not guessed- Exact prior-year net sales amount was not printed on the net sales line.
- Prior-year gross margin percentage was not printed.
- Prior-year adjusted gross margin percentage was not printed.
- Year-over-year percentage changes for gross profit, operating income, adjusted operating income, interest expense, other income, net earnings, adjusted net earnings, adjusted EBITDA and operating cash flow were not printed on their respective line items.
- Prior-quarter figures and quarter-over-quarter changes were not provided for the reported metrics.
- Exact segment net sales amounts and prior-year segment net sales amounts were not provided.
- Quarterly GAAP and adjusted effective tax rates were not provided; tax rates were provided only for the first nine months of fiscal 2026.
- Total debt amount was not provided.
- Quarterly operating cash flow was not provided; operating cash flow was reported for the nine months ended June 30, 2026.
- Actual free cash flow was not provided.
- Third-quarter share repurchase activity was not provided.
- Full-year GAAP gross-margin guidance was not provided.
- Full-year operating-expense guidance was not provided as a standalone figure.
- A previous outlook section was not provided; therefore, no actual-versus-prior-guidance comparison is included.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K with Exhibit 99.1 reporting Edgewell Personal Care’s third fiscal quarter 2026 results ended June 30, 2026, excluding the Feminine Care business treated as discontinued operations.
Ticker impact
Edgewell reported Q3 FY2026 results, with organic net sales returning to growth and adjusted EPS flat at $0.72, plus a narrowed full-year outlook.
Near-term trading likely hinges on how investors interpret the narrowed outlook versus margin compression and GAAP EPS decline.
The filing provides multiple decision-relevant datapoints (organic sales trend, North America improvement, gross margin down 210 bps, restructuring costs, and full-year outlook narrowed) but the excerpt does not include the specific outlook numbers, limiting precision on magnitude.
Market effects
Personal care peers may see read-across on demand durability and margin sensitivity to tariffs, mix, and promotional levels.
North America execution improvement could support sentiment for brands with similar distribution and category exposure.
International weakness tied to Middle East conflict and supply chain disruption highlights ongoing geopolitical and logistics risks for consumer staples.
Counterpoint
The headline growth is modest and gross margin fell materially, suggesting the earnings quality may be weaker than the organic sales rebound implies.
Key entities
- companyEdgewell Personal Care Company
NYSE-listed personal care company reporting Q3 FY2026 results and a narrowed full-year outlook.
- corporate_actionFeminine Care divestiture
Divestiture proceeds reduced revolving credit facility borrowings, lowering interest expense in the quarter.
- financingU.S. revolving credit facility
Provided additional liquidity of $418.8 million under the facility as of quarter end.
