Company Overview and History
Edgewell Personal Care Company (EPC) has long been a stalwart in the personal care industry, boasting an impressive portfolio of iconic brands that have stood the test of time. From the trusted Schick and Wilkinson Sword razors to the beloved Banana Boat and Hawaiian Tropic sun care products, Edgewell has established itself as a formidable player in the consumer staples market.
Founded in 1926, Edgewell's history is marked by strategic growth and adaptation. The company's origins trace back to the Schick Safety Razor Company, which was founded in 1920 and later merged with Edgewell in 2015. Over the decades, Edgewell has expanded its reach through a series of acquisitions, diversifying its offerings to include a wide range of personal care items that cater to the evolving needs of consumers around the globe.
In the 1930s, Schick introduced the world's first stainless steel razor blade, revolutionizing the shaving industry. This innovation was followed by the launch of the Schick Injector razor in 1946, which became a top-selling product for the company. Edgewell further expanded its wet shave business in the 1970s with the acquisition of the Edge and Skintimate shave prep brands, solidifying its position in the market.
The company faced significant challenges in the 1990s and early 2000s as it grappled with increased competition from rivals like Gillette. This led Edgewell to undertake major restructuring efforts, including plant closures and workforce reductions, to streamline operations and improve efficiency. Despite these headwinds, the company continued to invest in new product innovation, such as the launch of the Hydro5 razor system in 2010.
In 2015, Edgewell significantly strengthened its portfolio through the $6.5 billion acquisition of the Playtex, Wet Ones, and Banana Boat brands from Energizer Holdings. This transformative deal expanded the company's presence in the sun care and feminine care categories, although the integration of these new businesses posed operational challenges that the company had to navigate in the following years.
Business Segments
Today, Edgewell operates in three core business segments: Wet Shave, Sun and Skin Care, and Feminine Care. The Wet Shave division, which includes razor handles, refillable blades, and shaving gels, accounts for the largest portion of the company's revenue, generating $1.19 billion in fiscal year 2024. The Sun and Skin Care segment, home to iconic brands like Banana Boat and Cremo, contributed $487 million in sales, while the Feminine Care division, led by Playtex and Stayfree, added $525 million to the top line.
Financials
Edgewell's financial performance has been respectable, with the company reporting annual revenue of $2.25 billion and net income of $98.6 million in fiscal year 2024. The company's operating cash flow during the same period was a healthy $231 million, allowing it to invest in strategic initiatives and return capital to shareholders. Free cash flow for the fiscal year 2024 stood at $174.5 million.
In the first quarter of fiscal year 2025, Edgewell reported revenue of $478.4 million, representing a 2.1% year-over-year decline. The company experienced a net loss of $2.1 million for the quarter. Organic net sales decreased by 1.3%, with growth in international markets of 2% offset by a 4% decline in North America due to lower volumes in feminine care and wet shave products.
Liquidity
Edgewell's balance sheet remains robust, with a current ratio of 2.06 and a quick ratio of 0.97, indicating a stable financial position. The company's debt-to-equity ratio stands at 0.98, based on total debt of $1.48 billion (including $1.44 billion in long-term debt and $27.2 million in short-term notes payable) and total equity of $1.5 billion as of December 31, 2024.
As of the latest reporting date, Edgewell had $175.5 million in cash and cash equivalents. Additionally, the company has access to $221 million in undrawn credit under its Revolving Credit Facility, providing ample liquidity to support its operations and strategic initiatives.
Recent Performance and Challenges
The personal care industry has not been immune to the broader macroeconomic challenges that have rippled through the global economy. In the first quarter of fiscal year 2025, Edgewell reported a 2.1% year-over-year decline in net sales to $478.4 million, with organic net sales decreasing 1.3%. The company's GAAP diluted earnings per share fell from $0.09 in the prior-year quarter to a loss of $0.04, primarily due to the impact of unfavorable foreign currency movements.
Despite these headwinds, Edgewell remains confident in its ability to navigate the volatile environment. The company's management team has taken proactive steps to bolster its operational efficiency, implementing productivity initiatives that yielded 340 basis points of savings in the first quarter. Additionally, Edgewell has remained committed to its brand-building efforts, investing in marketing and innovation to drive consumer engagement and market share gains.
Geographic Performance
Geographically, Edgewell has seen divergent trends, with its international business continuing to be a bright spot. In the first quarter, the company's organic net sales in international markets grew 2%, driven by both price and volume gains. This performance underscores the durability of Edgewell's global footprint and the resilience of consumer demand in overseas markets. International markets represented 40% of the business in Q1 2025, highlighting the importance of Edgewell's global presence.
Segment Performance
Wet Shave Segment: In Q1 2025, net sales for the Wet Shave segment were $294.5 million, a decrease of 2.4% compared to the prior year quarter. The decline was driven by a 1.3% decrease in organic net sales, with 2.9% growth in international markets offset by volume declines in Shave Preps and Women's Systems in North America. Segment profit decreased by 13.2% to $46.6 million, primarily due to unfavorable currency impacts and higher marketing and SGA expenses.
Sun and Skin Care Segment: This segment showed strong performance with net sales increasing 4.5% year-over-year in Q1 2025. Organic net sales grew by 5.1%, led by strong performance in Grooming, particularly the Cremo and Billie brands, as well as continued momentum in Wet Ones products. Segment profit increased significantly, rising 161.5% compared to the prior year quarter.
Feminine Care Segment: This segment faced challenges in Q1 2025, with net sales declining 11.8% year-over-year. The decline was driven by an 11.7% decrease in organic net sales, largely due to a decline in Pads and, to a lesser extent, Tampons, partially offset by growth in Liners. Segment profit also declined significantly, falling 56.1% compared to the prior year quarter.
Outlook and Future Prospects
Looking ahead, Edgewell has updated its full-year fiscal 2025 outlook to reflect the impact of unfavorable currency movements. The company now expects organic net sales growth to be in the 1% to 3% range, with adjusted earnings per share and adjusted EBITDA trending towards the lower end of their respective guidance ranges. Specifically, adjusted EPS is expected to be towards the lower end of the $3.15 to $3.35 range, inclusive of $0.36 per share of currency headwinds. Adjusted EBITDA is anticipated to be towards the lower end of the $356 million to $368 million range, inclusive of $23 million in currency headwinds.
The revised outlook also includes an expected adjusted gross margin accretion of 55 basis points, including a 35 basis point headwind from unfavorable foreign exchange. The company now anticipates that currency movements will be a 160 basis point headwind to reported sales, compared to the previous expectation of a 70 basis point positive impact.
Edgewell expects approximately 70% of adjusted net earnings to be generated in the second half of fiscal 2025, slightly higher than the previous outlook. This revised guidance reflects Edgewell's commitment to maintaining financial discipline and operational agility in the face of ongoing macroeconomic uncertainties.
As Edgewell navigates these challenging times, the company's proven track record, diversified portfolio, and strategic focus on innovation and international expansion position it well to capitalize on long-term growth opportunities. With a strong brand presence, a commitment to operational excellence, and a steadfast focus on delivering value to shareholders, Edgewell Personal Care remains a compelling investment proposition in the dynamic personal care landscape.
Edgewell continues to be one of the world's largest manufacturers and marketers of personal care products in the wet shave, sun and skin care, and feminine care categories. With operations in approximately 20 countries and products sold in more than 50 countries, the company's global reach provides a strong foundation for future growth and resilience against regional market fluctuations.