0001628280-25-037827
SEC filingFiscal 2025 Q3 net sales fell 3.2% to $627.2M, adjusted EPS down to $0.92 from $1.22, driven by volume declines in North America.
In the third quarter of fiscal 2025, Edgewell Personal Care Company reported net sales of $627.2 million, a decrease of 3.2% compared to $647.8 million in the prior year quarter. Organic net sales, which exclude currency impacts, decreased 4.2%, driven by an 8.0% decline in North America partially offset by 2.2% growth in international markets. Gross profit fell 6.5% to $268.5 million, with gross margin contracting 150 basis points to 42.8% (GAAP) and 43.2% adjusted. The margin compression was primarily due to core inflation and volume absorption (180 bps), negative foreign currency (110 bps), and increased promotional levels (90 bps), partially offset by productivity savings of approximately 270 bps. GAAP operating income decreased to $53.7 million from $82.7 million, reflecting lower sales and margin. On an adjusted basis, operating income was $75.1 million compared to $94.8 million. Net earnings declined to $29.1 million ($0.62 per diluted share) from $49.0 million ($0.98 per share), while adjusted net earnings were $43.4 million ($0.92 per diluted share) versus $61.2 million ($1.22). The adjusted effective tax rate increased to 22.4% from 21.2%.
Wet Shave: Net sales were flat at $317.0 million (+0.2% YoY) as favorable currency (+2.0%) offset an organic decline of 1.8%. International organic growth of 2.8% driven by pricing was more than outweighed by a 7.8% organic decline in North America due to volume and promotions. Segment profit decreased 7.4% to $44.1 million; excluding currency, organic segment profit rose 2.3% on higher gross margins and lower SG&A.
Sun and Skin Care: Net sales fell 5.3% to $243.4 million, with organic decline of 5.5%. This was largely attributed to weather-related volume declines and heightened competition in North America Sun Care, partially offset by growth in Grooming (+6.1% organic). North America organic sales dropped 7.1%, while international grew 0.7%. Segment profit plunged 28.3% to $46.0 million, driven by lower gross margin and higher marketing and SG&A expenses. Organic segment profit decreased 26.3%.
Feminine Care: Net sales declined 10.5% to $66.8 million, with organic decline of 10.4% due to weakness in Pads and Tampons. North America fell 10.8% organically and international declined 3.6%. Segment profit dropped 31.8% to $4.5 million, as lower gross profit outweighed cost savings. Organic segment profit decreased 25.7%.
General Corporate and Other: Corporate expenses were $57.4 million (9.2% of sales), up from $55.9 million (8.6%) in the prior year quarter, primarily due to higher restructuring and special charges. The company incurred $17.8 million in restructuring charges related to manufacturing consolidation in Mexico.
Management did not provide explicit financial guidance for the remainder of fiscal 2025, but noted expectations to incur approximately $44 million in pre-tax restructuring charges for the full fiscal year, with $32.4 million recognized in the first nine months. The company continues to focus on productivity savings, supply chain optimization, and brand investment. The recent enactment of the One Big Beautiful Bill Act (OBBBA) in July 2025 is being assessed for potential tax implications starting in fiscal 2026. The Feminine Care reporting unit required an interim impairment test due to a triggering event; fair value exceeded carrying value by less than 10%, with no impairment recorded, but sensitivity to future cash flows remains a key risk. No other forward-looking statements regarding revenue or margin trends were provided in the MD&A section.
Operating cash flow (CFO) of $44.3M is significantly lower than net income of $56.0M, indicating poor cash conversion. The primary driver was a large $82.7M outflow from changes in operating assets and liabilities, likely reflecting increased working capital needs or timing differences. Capex rose 61% YoY to $49.4M, resulting in negative free cash flow (CFO - capex = -$5.1M), which is not explicitly stated but implied. Capital returns (share repurchases and dividends) totaled $112.6M, far exceeding operating cash flow, financed by debt proceeds and reduced cash. The $774M in debt proceeds with maturities >90 days offset $678M in payments, indicating active debt management. The accounts receivable facility provided $14.2M net inflow. Overall, cash generation weakened substantially compared to the prior year, with CFO down 71.8% and increased reliance on financing activities.