Edgewell Personal Care Company (EPC) Q3 2024 earnings summary

Executive summary

• Leadership changes included appointing Dan Sullivan as COO and Francesca Weissman as CFO to streamline decision-making and accelerate execution.

• The business transformation focused on strengthening the U.S. business, innovation, international growth, gross margin accretion, and commercial capabilities.

• Q3 2024 net sales were $647.8 million, down 0.3% year-over-year; organic net sales rose 0.6% due to strong international growth offsetting North America declines.

• GAAP EPS decreased 4% to $0.98, while adjusted EPS increased 23% to $1.22 compared to the prior year quarter.

• The company exited a period of macroeconomic disruption stronger and better positioned for sustainable growth.

Financial highlights

• Gross margin accretion of 160 basis points year-over-year in Q3, with adjusted gross margin at 44.7%.

• Adjusted EBITDA reached $117.2 million, up from $109.7 million, despite $4 million in currency headwinds.

• Adjusted operating income rose 13% to $94.8 million; adjusted operating margin up 170 basis points to 14.6%.

• Organic net sales increased 0.6% in Q3, with international growth over 6% offsetting North America declines.

• Adjusted EPS was $1.22 (vs. $0.99 prior year); GAAP EPS was $0.98 (vs. $1.02 prior year).

Outlook and guidance

• Full-year adjusted EBITDA outlook raised to approximately $356 million.

• Adjusted EPS guidance increased to approximately $3 per share, up 15% year-over-year (20% at constant currency).

• Full-year organic net sales growth expected at about 1%, with currency a 35 bps headwind.

• Adjusted gross margin accretion for the year now expected at 140 basis points.

• Pre-tax restructuring charges for FY24 estimated at ~$19 million as part of ongoing transformation initiatives.