Edgewell Personal Care Co’s Earnings Call Highlights Growth and Challenges

Edgewell Personal Care Co ((EPC)) has held its Q4 earnings call. Read on for the main highlights of the call.

Edgewell Personal Care Co’s recent earnings call presented a balanced sentiment, reflecting both achievements and challenges. The company showcased strong international growth and innovation, but these positives were countered by declining North American sales, particularly in the Wet Shave segment, and a notable decrease in gross margin due to external pressures.

International Market Growth

International markets have been a bright spot for Edgewell, contributing approximately 40% of global sales. The company reported strong growth for the fourth consecutive year, with Europe marking its third straight year of growth and Greater China achieving double-digit growth. This international success underscores Edgewell’s strategic focus on expanding its global footprint.

Compelling Innovation

Edgewell has made significant strides in innovation, expanding the Billy brand to Australia and introducing Bulldog into the premium skincare market across Europe. The company also saw substantial sales growth in sun care, particularly with Hawaiian Tropic, driven by successful marketing campaigns. These initiatives highlight Edgewell’s commitment to diversifying and strengthening its product portfolio.

Productivity Through Supply Chain Optimization

Edgewell achieved over 270 basis points in gross savings in fiscal 2025 and expects to reach approximately 310 basis points in fiscal 2026, including tariff mitigation. This focus on supply chain optimization is a key component of the company’s strategy to enhance productivity and maintain competitive advantage.

Challenging Fiscal Year 2025

Fiscal 2025 posed significant challenges for Edgewell due to external pressures such as tariffs, foreign exchange volatility, geopolitical tensions, and consumer uncertainty. These factors impacted financial performance and stressed the global supply chain, presenting hurdles that the company is actively working to overcome.

Decline in North America Wet Shave Sales

The North American market faced difficulties, with organic net sales decreasing by approximately 60 basis points, and Wet Shave sales declining by about 1%. This decline highlights the challenges in the North American market, which Edgewell is addressing through strategic initiatives.

Gross Margin and Earnings Decline

Edgewell experienced a decrease in its adjusted gross margin rate by 330 basis points, primarily due to higher than expected year-end inventory adjustments and unfavorable currency and tariff-related pressures. This decline in gross margin is a critical area of focus for the company as it seeks to stabilize and improve financial performance.

Forward-Looking Guidance

Looking ahead, Edgewell projects a 2.5% organic net sales growth in Q4, with international markets expected to grow by 6.9% and North American sales showing signs of stabilization. The company aims for mid-single-digit growth in international markets in fiscal 2026 and plans to enhance gross margins by approximately 60 basis points through productivity savings and strategic pricing. Despite a $25 million impact from tariffs, Edgewell is focused on categories with competitive advantages and anticipates adjusted EBITDA between $290 million and $310 million. The planned divestiture of the Feminine Care business is expected to impact adjusted EPS and EBITDA, but the company remains committed to reinvestment in brands and productivity for long-term growth.

In summary, Edgewell Personal Care Co’s earnings call highlighted a mix of strong international growth and innovation alongside challenges in North America and declining gross margins. The company is strategically focused on overcoming these hurdles through supply chain optimization and targeted growth initiatives, aiming to deliver long-term shareholder value.