Edgewell Personal Care faced a difficult Q2, with results that disappointed both the market and analysts. Management attributed the underperformance primarily to a very weak Sun Care season in North America and Latin America, driven by adverse weather conditions. CEO Rod Little described the quarter as "challenging," noting that Sun Care performance was a significant drag. Despite these setbacks, the company saw some positive developments, including improved market share in key brands like Hawaiian Tropic, Cremo, and Schick Hydro Silk, as well as steady international growth.
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Edgewell Personal Care (EPC) Q2 CY2025 Highlights:
- Revenue: $627.2 million vs analyst estimates of $654.6 million (3.2% year-on-year decline, 4.2% miss)
- Adjusted EPS: $0.92 vs analyst expectations of $0.99 (7.5% miss)
- Adjusted EBITDA: $97.2 million vs analyst estimates of $102.4 million (15.5% margin, 5% miss)
- Management lowered its full-year Adjusted EPS guidance to $2.65 at the midpoint, a 10.2% decrease
- EBITDA guidance for the full year is $312 million at the midpoint, below analyst estimates of $335.5 million
- Operating Margin: 8.6%, down from 12.8% in the same quarter last year
- Organic Revenue fell 4.2% year on year vs analyst estimates of flat growth (428.9 basis point miss)
- Market Capitalization: $1.05 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Edgewell Personal Care’s Q2 Earnings Call
- Chris Carey (Wells Fargo Securities) asked about the drivers behind the free cash flow cut and how the organization is incentivized to manage cash flow as leverage rises. CFO Francesca Weissman explained that lower earnings, FX headwinds, and tariff-related working capital were primary factors, while COO Daniel Sullivan said he expects a return to historical cash generation levels as these pressures subside.
- Peter Grom (UBS) sought clarity on whether the implied Q4 organic sales growth rate is sustainable into next year and which headwinds are transitory. CEO Rod Little declined to give specific guidance but said the company can return to 2-3% growth once transformation efforts take hold, and described the current year as "transitory" due to tariffs and weather.
- Olivia Tong Cheang (Raymond James) questioned what is driving the expected rebound in Q4 organic growth, particularly regarding category recovery and inventory normalization. COO Daniel Sullivan detailed international pricing, new product launches, and improved shelf performance in Fem Care and Sun Care as main contributors.
- Olivia Tong Cheang (Raymond James) also asked whether increased brand support and innovation investment will continue next year. CEO Rod Little confirmed ongoing A&P spending and noted the success of campaigns for Cremo, Hawaiian Tropic, and Hydro Silk, while indicating more brand activations are planned.
- Susan Anderson (Canaccord Genuity) requested updates on Sun Care inventory levels and innovation, as well as competitive dynamics in Wet Shave. Sullivan said inventory is normalizing due to replenishment, and Little described the Sun Care category as seeing routine new entrants but not fundamentally new innovation, while emphasizing Billie’s continued share gains in Women’s Shave.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will focus on (1) the effectiveness of new U.S. brand campaigns and commercial leadership in driving market share gains, (2) the company’s ability to mitigate ongoing tariff and foreign exchange cost pressures through supply chain actions and pricing, and (3) sustained international sales momentum, particularly in Shave and Grooming. Progress on cash flow recovery and inventory normalization will also be important markers.
Edgewell Personal Care currently trades at $22.52, down from $25.01 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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