Edgewell Personal Care (NYSE:EPC) released its quarterly earnings results on November 13, 2023, showing a loss of $0.16 per share, slightly better than analysts’ expectations of $0.18. The company reported revenue of $422.80 million, falling short of the forecasted $476.48 million, as noted by Zacks.
Despite the disappointing revenue figures, Edgewell’s performance showed a modest improvement, with revenues up 1.9% from the same quarter last year. In the previous year, the company posted earnings of $0.07 per share for the same period. The firm also updated its full-year guidance for Fiscal Year 2026, projecting earnings per share between $1.70 and $2.10.
Strategic Focus and Business Adjustments
During the quarterly conference call, management shared insights on recent strategic moves. Notably, Edgewell completed the sale of its FemCare business to Essity, allowing the company to concentrate on its core categories, which include shaving, sun care, skincare, and grooming. The net proceeds from this sale will be utilized to reduce debt. Management characterized the divestiture as “favorable to our previous outlook,” although it anticipates a near-term impact of $0.44 on adjusted earnings per share and $44 million in adjusted EBITDA.
The first-quarter results exceeded expectations primarily due to strong demand in North America, particularly early orders in the sun care segment, which counterbalanced weaker international sales. Edgewell achieved approximately 240 basis points in gross productivity savings, positively influencing profitability. However, the company faced challenges, reporting a GAAP diluted net loss of $(0.63) per share from continuing operations, with adjusted EBITDA at $25 million and net cash used from operating activities totaling $125.9 million.
For Fiscal Year 2026, Edgewell maintained its guidance for continuing operations, predicting organic net sales to range from a 1% decline to a 2% increase, excluding an estimated 150 basis points foreign exchange tailwind. The adjusted EBITDA is projected between $245 million and $265 million, factoring in around $25 million from net tariffs and an increased advertising and promotion rate of approximately 12.3% of sales. Management reiterated its commitment to structural actions, including supply chain optimization and brand investment focused on five core brands, aimed at enhancing margins and cash flow.
Stock Performance and Analyst Ratings
On November 15, 2023, shares of Edgewell Personal Care opened at $20.56. The company holds a market capitalization of $960.56 million and a price-to-earnings (P/E) ratio of -24.19. Over the past year, the stock has reached a low of $15.88 and a high of $32.96. The 50-day moving average price stands at $18.19, while the 200-day moving average is $19.91. Edgewell’s debt-to-equity ratio is 1.02, with a quick ratio of 0.90 and a current ratio of 2.12.
Analysts have recently adjusted their ratings on Edgewell shares. The Royal Bank of Canada reaffirmed an “outperform” rating, while Morgan Stanley lowered its price target from $23.00 to $21.00 with an “equal weight” rating. Barclays raised its target from $19.00 to $21.00, maintaining an “equal weight” rating, and Wells Fargo & Company increased its target from $20.00 to $22.00, assigning an “overweight” rating. In contrast, Weiss Ratings reiterated a “sell” rating. Consensus ratings indicate three analysts recommend a buy, four suggest holding, and one advises selling, with an average target price of $23.33.
Institutional investors have actively adjusted their stakes in Edgewell. Tower Research Capital LLC increased its position by 67.4% in the second quarter, owning 4,201 shares valued at $98,000 after acquiring an additional 1,692 shares. Other notable changes include iSAM Funds UK Ltd purchasing new shares worth about $87,000 and PNC Financial Services Group Inc. growing its position by 364.4% in the fourth quarter, now holding 5,234 shares valued at $89,000. Overall, institutional investors own 91.91% of Edgewell’s stock.
Founded in 2015 and headquartered in Shelton, Connecticut, Edgewell Personal Care is a global company focused on personal care products, including shaving and sun care solutions. The firm was established as a spin-off from Energizer Holdings and is known for its well-recognized brands serving everyday grooming and protection needs.
