Personal care company Edgewell Personal Care (NYSE:EPC) fell short of the market’s revenue expectations in Q1 CY2025, with sales falling 3.1% year on year to $580.7 million. Its non-GAAP profit of $0.87 per share was 4.7% below analysts’ consensus estimates.
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Edgewell Personal Care (EPC) Q1 CY2025 Highlights:
- Revenue: $580.7 million vs analyst estimates of $591.2 million (3.1% year-on-year decline, 1.8% miss)
- Adjusted EPS: $0.87 vs analyst expectations of $0.91 (4.7% miss)
- Adjusted EBITDA: $98.5 million vs analyst estimates of $97.18 million (17% margin, 1.4% beat)
- Management lowered its full-year Adjusted EPS guidance to $2.95 at the midpoint, a 9.2% decrease
- EBITDA guidance for the full year is $335 million at the midpoint, below analyst estimates of $356.3 million
- Operating Margin: 10.1%, down from 11.7% in the same quarter last year
- Organic Revenue fell 1.5% year on year (0.1% in the same quarter last year)
- Market Capitalization: $1.25 billion
StockStory’s Take
Edgewell Personal Care’s first quarter results reflected mixed performance across its portfolio, with particular challenges in North America offset by resilience in international markets. Management attributed the sales decline primarily to a slower-than-anticipated recovery in its U.S. Fem Care business and a sluggish start to the domestic sun care season, which CEO Rod Little linked to poor weather and ongoing consumer uncertainty. Despite these headwinds, the company pointed to continued growth in international markets and cited operational improvements, including productivity savings and supply chain efficiencies, as positive contributors to the quarter.
Looking ahead, Edgewell’s updated guidance incorporates softer category consumption trends and rising cost pressures, especially from tariffs and increased brand investment in North America. CFO Fran Weissman emphasized that the revised outlook assumes only low single-digit growth for U.S. sun care and acknowledges ongoing headwinds from tariffs, which could impact costs by up to 4% of total cost of goods sold. Management remains focused on executing brand campaigns and productivity initiatives, with Dan Sullivan, Chief Operating Officer, noting, “We are incrementally investing in promotion and retail activation in the third quarter, particularly behind women’s shave and sun care, to capture upcoming seasonal demand.”
Key Insights from Management’s Remarks
Management identified weaker U.S. category performance, tariff-related cost pressures, and targeted brand investments as the main factors shaping quarterly results and strategic priorities.
- International growth momentum: Edgewell’s international business continued to expand, driven by strong market share gains in Japan, Greater China, and Europe. The company highlighted its locally-led innovation strategy, such as new launches for Schick and Bulldog, as key contributors.
- North America underperformance: U.S. sales were hampered by delayed recovery in Fem Care and softer sun care demand, which management linked to poor early-season weather and shifts in consumer spending. CEO Rod Little acknowledged ongoing transformation efforts, including new commercial leadership, to address these issues.
- Brand innovation and campaigns: The company emphasized recent product launches and marketing initiatives, including expanding the Billie brand and launching a significant influencer-backed campaign for Hawaiian Tropic. These efforts are intended to drive share gains in key categories.
- Tariff and cost mitigation: Tariff-related headwinds remain a concern, with management estimating a $3–$4 million impact for the year and potential for greater exposure if policies change. Procurement teams are actively pursuing alternative sourcing and productivity savings to offset these pressures.
- Productivity gains and operational efficiency: Edgewell delivered productivity savings exceeding 200 basis points, supporting gross margin improvements even as operating margin declined year over year. Management credited ongoing supply chain and sourcing initiatives for these results.
Drivers of Future Performance
Edgewell’s outlook for the remainder of the year is shaped by cautious consumer trends, tariff uncertainties, and planned brand investments in North America.
- Tariff exposure and mitigation: Management flagged tariffs as a key risk, with annualized exposure estimated at 3% to 4% of cost of goods sold. The company is prioritizing alternative sourcing, procurement negotiations, and potential selective price increases if tariff impacts persist or escalate.
- North America brand investment: To revive U.S. performance, Edgewell is increasing marketing and promotional activity in the third quarter, focusing on women’s shave and sun care. These investments are timed to capture seasonal demand but are expected to pressure margins in the near term.
- International and product innovation: The company’s international segment is projected to maintain mid-single-digit organic growth, underpinned by innovation and local market execution. Management expects new product launches and expanded distribution to support this trajectory, even as U.S. growth remains muted.
Catalysts in Upcoming Quarters
In coming quarters, StockStory analysts will monitor (1) the effectiveness of increased North America brand investment in reversing category declines, (2) the company’s ability to mitigate ongoing tariff and cost pressures through sourcing and pricing actions, and (3) whether international growth and innovation can offset domestic headwinds. Progress on inventory management and working capital will also be key to sustaining free cash flow targets.
Edgewell Personal Care currently trades at a forward P/E ratio of 8.1×. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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