On August 6, 2024, Edgewell Personal Care Co (EPC, Financial) released its 8-K filing for the third fiscal quarter ended June 30, 2024. Edgewell Personal Care Co is a personal-care company with operating segments including Wet Shave, Sun and Skin Care, and Feminine Care. The company offers brands such as Edge, Skintimate, Personna, Schick, Carefree, Playtex, Banana Boat, and Hawaiian Tropic, deriving a majority of its revenue from the United States.
Performance Overview
Edgewell Personal Care Co (EPC, Financial) reported net sales of $647.8 million for Q3 2024, a slight decrease of 0.3% compared to the prior year quarter. Organic net sales, which exclude the impact of currency movements, increased by 0.6%. GAAP diluted net earnings per share (EPS) were $0.98, down from $1.02 in the prior year quarter. However, adjusted EPS rose significantly to $1.22 from $0.99, surpassing the analyst estimate of $1.18.
Despite the slight decline in net sales, the company achieved a gross profit of $287.1 million, up from $280.3 million in the prior year quarter. Gross margin as a percentage of net sales increased by 120 basis points to 44.3%. Adjusted gross margin saw an even more substantial increase of 160 basis points, driven by productivity savings and higher pricing.
Segment Performance
The Wet Shave segment saw a net sales decrease of 2.4% to $316.3 million, with organic net sales down by 0.6%. However, segment profit increased by 47.4% to $47.6 million, reflecting higher gross margins and lower marketing expenses.
The Sun and Skin Care segment reported a net sales increase of 4.9% to $256.9 million, with organic net sales up by 5.1%. Segment profit increased by 4.6% to $64.2 million, driven by higher gross margins.
The Feminine Care segment experienced a net sales decline of 7.9% to $74.6 million, with segment profit decreasing by 52.9% to $6.6 million, primarily due to lower sales and higher marketing expenses.
Financial Achievements and Challenges
Edgewell Personal Care Co (EPC, Financial) ended the third quarter with $196.1 million in cash on hand and access to an additional $369.7 million revolving credit facility. The company returned $17.4 million to shareholders through share repurchases and dividends. The Board of Directors declared a cash dividend of $0.15 per common share for the third quarter.
However, the company faced challenges, including unfavorable currency impacts and increased SG&A expenses. SG&A expenses were $110.1 million, or 17.0% of net sales, up from $96.3 million, or 14.8%, in the prior year quarter. The increase was primarily driven by higher people expenses and legal costs.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $647.8 million | $650.0 million |
| Gross Profit | $287.1 million | $280.3 million |
| GAAP EPS | $0.98 | $1.02 |
| Adjusted EPS | $1.22 | $0.99 |
Commentary and Outlook
"Our third quarter results reflected robust gross margin accretion leading to substantial adjusted EBITDA and earnings per share growth. Amidst a competitive and dynamic market landscape, organic net sales growth featured continued strength in our Right-to-Win portfolio, propelled by our industry-leading Sun Care and Grooming businesses," stated Rod Little, Edgewell’s President and Chief Executive Officer.
Looking ahead, Edgewell Personal Care Co (EPC, Financial) has updated its full-year outlook. The company now expects organic net sales to increase by approximately 1%, down from the previous estimate of 2%. GAAP EPS is projected to be approximately $2.28, while adjusted EPS is expected to be around $3.00, up from the previous range of $2.80 to $3.00. Adjusted EBITDA is now anticipated to be approximately $356 million.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Edgewell Personal Care Co for further details.
