Edgewell Personal Care Company (EPC) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 FY2025 were $478.4 million, down 2.1% year-over-year; organic net sales decreased 1.3%, with international growth offset by North America declines.

• International markets grew 2.0% organically, especially in wet shave, sun care, and grooming, with strong share gains in Australia, Mexico, and China.

• U.S. business remains challenged in certain categories, notably fem care and wet shave, but grooming and brands like Billie and Cremo performed strongly.

• Net loss was $2.1 million versus net earnings of $4.8 million in the prior year; adjusted net earnings were $3.3 million, down from $12.0 million.

• Leadership and organizational changes, including Mexico operations consolidation, are driving improved execution and talent retention.

Financial highlights

• Gross profit was $191.6 million, down from $197.7 million; gross margin fell 30 bps to 40.1%, with a 140 bps negative currency impact.

• Adjusted operating income was $27.0 million (5.6% margin), down from $35.7 million (7.3% margin); adjusted EBITDA was $45.9 million, down from $57.2 million.

• Adjusted EPS was $0.07, down from $0.24; GAAP diluted EPS was a loss of $0.04, both impacted by $0.17/share FX headwind.

• Net cash used by operating activities was $115.6 million, up from $72.9 million, mainly due to working capital changes and lower earnings.

• Share repurchases totaled $30.3 million for 0.8 million shares; $38 million returned to shareholders in Q1.

Outlook and guidance

• Organic net sales for FY25 expected to grow 1–3%; Q2 growth forecast at ~1% due to sun care order timing.

• Adjusted EPS and EBITDA expected at lower end of prior ranges, reflecting increased FX headwinds; adjusted EBITDA expected at lower end of $356–$368 million.

• Full-year adjusted gross margin accretion now expected at 55 bps (down from 90 bps constant currency) due to 35 bps FX headwind.

• 70% of adjusted net earnings expected in second half of fiscal year; free cash flow forecast at $185 million.

• Management expects to incur approximately $29 million in pre-tax restructuring charges in FY2025, including $18 million for Mexico facility consolidation.