Edgewell Personal Care Co Earnings Call: Q1 2025 Results and Outlook

Edgewell Personal Care Co (NYSE: EPC) reported its first fiscal quarter 2025 results on February 10, 2025, providing insights into the company's performance and future outlook. The earnings call highlighted several key aspects of the company's operations and strategies.



Q1 2025 Results:

* Net sales decreased by 2.1% compared to the prior year quarter, with organic net sales decreasing by 1.3%.
* GAAP Diluted Net (Loss) Earnings Per Share (EPS) were $(0.04), compared to $0.09 in the prior year quarter.
* Adjusted EPS were $0.07, inclusive of a $0.17 unfavorable impact from currency movements, as compared to $0.24 in the prior year quarter.
* Ended the first quarter with $176 million in cash on hand, access to an additional $221 million revolving credit facility, and a net debt leverage ratio of 3.8x.
* Returned $38 million to shareholders in the form of $30 million in share repurchases and $8 million of dividends in the first quarter.
* The Board of Directors declared a cash dividend of $0.15 per common share on February 6, 2025, for the first quarter.

Key Takeaways:

1. Currency Impact: The strengthening US dollar significantly impacted the top and bottom-line results for the quarter, with an unfavorable impact of $0.17 on adjusted EPS.
2. Operational Performance: Despite the currency headwinds, Edgewell's performance was operationally as expected, with continued top-line growth across international markets and further momentum in its Right to Win businesses. This resulted in better than expected constant currency adjusted EBITDA and earnings per share.
3. Gross Margin: Gross margin decreased by 30 basis points to 40.1% in the quarter, inclusive of approximately 140 basis points of negative foreign currency. Adjusted gross margin, at constant currency, decreased by 60 basis points, or increased 80 basis points at constant currency. Productivity savings of approximately 340 basis points were more than offset by increased promotional levels (net of pricing) of approximately 40 basis points, core inflation and lower volume absorption of approximately 200 basis points, and unfavorable mix and other of approximately 20 basis points.
4. Outlook: Edgewell continues to expect to deliver organic net sales, adjusted EBITDA, and adjusted EPS within its previously provided range, despite greater than anticipated foreign currency headwinds.



In conclusion, Edgewell Personal Care Co's Q1 2025 earnings call provided a mixed picture, with operational performance meeting expectations but currency headwinds impacting the top and bottom-line results. The company remains focused on driving operational performance and executing in areas within its control, while continuing to expect to deliver organic net sales, adjusted EBITDA, and adjusted EPS within its previously provided range. Investors should monitor the company's progress and potential risks associated with currency fluctuations and other external factors.