Edgewell Personal Care Company (EPC) Q3 2024 earnings summary

Executive summary

• Leadership changes include appointing Dan Sullivan as COO and Francesca Weissman as CFO to streamline operations and accelerate growth.

• The business transformation continues, focusing on innovation, U.S. market strength, and international expansion.

• 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.

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

• Gross margin expanded by 120 basis points to 44.3%; adjusted gross margin up 160 basis points, driven by productivity and pricing.

Financial highlights

• Adjusted EBITDA grew 7% year-over-year to $117.2 million, and adjusted EPS rose 23% to $1.22.

• Adjusted operating income increased 13% to $94.8 million, with a 170 basis point rise in adjusted operating margin to 14.6%.

• Net cash from operations for the first nine months was $157.3 million, down from $168.3 million year-over-year.

• Interest expense fell to $18.8 million from $19.2 million due to lower debt balances.

• Q3 advertising and sales promotion expense was $76.6 million (11.8% of sales), down 4.3% year-over-year.

Outlook and guidance

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

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

• Organic net sales growth for the year expected to be around 1%, with currency a 35 bps headwind.

• Full-year adjusted gross margin accretion forecasted at 140 basis points.

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