Edgewell Personal Care Company (EPC) Q1 2025 earnings summary

Executive summary

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

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

• GAAP EPS was $(0.04), down from $0.09; adjusted EPS was $0.07, down from $0.24, with a $0.17 negative currency impact.

• International markets grew 2.0% organically, offsetting North America declines; strong performance in wet shave, sun care, and grooming.

• Leadership and organizational changes, including Mexico facility consolidation, are underway to enhance 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 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, with $11.2 million negative currency impact.

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

• Capital expenditures rose to $16.8 million from $6.5 million.

• Returned $38 million to shareholders via $30 million in share repurchases and $8 million in dividends.

Outlook and guidance

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

• Full-year adjusted gross margin accretion now 55 bps (down from prior outlook) due to 35 bps FX headwind.

• Adjusted EPS and EBITDA expected at lower end of prior ranges, reflecting increased FX headwinds; $0.36/share negative currency impact.

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

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