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    EPC
    Earnings call· Jun 2026(Q3 FY26)

    EDGEWELL PERSONAL CARE Q3 FY26 earnings call EPC

    Aug 5, 2026 Source

    Executive summary

    Edgewell Q3 FY26 — Organic Sales Return to Growth, Strong North America Performance

    Edgewell delivered a solid third quarter, returning to organic net sales growth driven by strong North American performance across grooming, sun, and branded wet shave. Despite international headwinds and gross margin pressure, the company exceeded adjusted earnings expectations and reaffirmed its full-year outlook, signaling confidence in its strategic investments and operational transformation. Management expects stronger Q4 performance and a stronger position entering FY27.

    Highlights

    5

    • Organic net sales increased 1.1% in Q3 FY26, marking a return to growth.

    • North America organic sales increased 3%, driven by double-digit grooming growth and mid-single-digit sun and skin growth.

    • Adjusted earnings per share was $0.72, flat to prior year, and ahead of expectations.

    • Adjusted EBITDA was $78.9 million, exceeding expectations.

    • Cremo achieved its seventh consecutive quarter of approximately 20% or more growth in grooming.

    Concerns

    4

    • International organic sales declined 1.4% due to the Middle East conflict, private label supply disruption, and a weaker sun season start.

    • Adjusted gross margin declined 30 basis points compared to the prior year.

    • Wetshave organic net sales declined 1.9% due to continued supply disruption within private label.

    • U.S. branded unit market share in razors and blades declined 40 basis points due to cycling elevated promotional activity.

    Guidance & targets

    10
    CategoryTargetConfidence
    Organic net sales
    flat to +50 basis points
    high materiality
    High
    Adjusted EPS
    $1.80 to $2 per share
    high materiality
    High
    Adjusted EBITDA
    $250 to $260 million
    high materiality
    High
    Adjusted free cash flow (excluding FemCare divestiture impact)
    approximately $80 to $110 million
    high materiality
    High
    Adjusted net debt leverage
    3.3 to 3.4 times
    medium materiality
    High
    Gross margin
    material expansion
    high materiality
    High
    International sales
    return to growth
    medium materiality
    High
    North America sales
    continued growth
    medium materiality
    High
    Gross margin
    up year over year percentage points
    high materiality
    High
    Sales growth
    low single digits growth rate
    high materiality
    Medium

    Segment performance

    8
    SegmentRevenueYoYQoQMargin
    North America
    Organic sales increased, driven by double-digit grooming growth, mid-single-digit growth in sun and skin, and a return to growth in branded wet shave. Performance exceeded expectations.
    		—3%——
    International
    Organic sales declined, reflecting the impact of the Middle East conflict, lower private label sales due to temporary supply disruption, and a weaker-than-anticipated start to the sun season in Europe and LATAM. Expected to return to growth in Q4.
    		—-1.4%——
    Wetshave (Total)
    Organic net sales declined as continued supply disruption within private label more than offset growth across the branded portfolio.
    		—-1.9%——
    Branded Wetshave
    Performance improved across focus brands, and commercial initiatives in the US are beginning to gain traction.
    		—returned to growth——
    Private Label Wetshave
    Impacted by supply disruption, primarily in a couple of European markets and Latin America. This is viewed as a transitory impact.
    		—down 10%——
    Sun and Skincare
    Organic net sales increased, driven by mid-single-digit growth in sun in North America, strong global grooming performance, and continued growth in skincare.
    		—5%——
    Grooming
    Strong performance, particularly in North America. Cremo achieved its seventh consecutive quarter of approximately 20% or more growth.
    		—double-digit growth——
    Japan
    Expected growth for Q3, Q4 combined, driven by strong innovation on the base hydro line and new innovation in SICK First Tokyo range.
    		—mid to high single digit rate——

    Operational metrics

    21
    Organic net sales growth
    1.1%
    Q3 FY26

    Return to growth for the quarter.

    Adjusted gross margin
    declined 30 basis pointscompared to prior year
    Q3 FY26

    Broadly in line with expectations, but underlying drivers were different than anticipated. Inflation was higher than expected, offset by tariff refunds and productivity.

    AMP expenses as % of net sales
    14.6%up from 13.6% last year
    Q3 FY26

    Spending increase to support new campaign launches. Slightly below outlined levels for the quarter, but full year outlook unchanged.

    Adjusted SG&A as % of net sales
    18.4%compared to 17.6% last year
    Q3 FY26

    Primarily driven by higher incentive compensation and unfavorable currency impacts, partly offset by lower people and consulting expenses.

    Adjusted operating income
    $53 millioncompared to $63.6 million last year
    Q3 FY26

    Primarily reflecting the impact of lower gross margins, higher AMP, and SG&A expenses.

    GAAP diluted net earnings per share from continuing operations
    $0.26compared to $0.46 in Q3 FY25
    Q3 FY26

    Reported for the quarter.

    Adjusted earnings per share from continuing operations
    $0.72flat to prior year
    Q3 FY26

    Ahead of expectations.

    Adjusted EBITDA
    $78.9 millioncompared to $81.2 million in prior year
    Q3 FY26

    Ahead of expectations.

    Net cash provided by operating activities
    $47 millioncompared to $44 million last year
    First nine months of FY26

    Primarily due to changes in working capital.

    Cash provided from operating activities
    $100 million
    Q3 FY26

    Presented on a consolidated basis for both continuing and discontinued operations.

    Dividend payout per share
    $0.15
    Q3 FY26

    Quarterly dividend declared.

    Shareholders return via dividend
    $7 million
    Q3 FY26

    Amount returned to shareholders via dividend in the quarter.

    US razors and blades category consumption growth
    160 basis points
    Q3 FY26

    In a heightened competitive and promotional environment.

    US branded unit market share decline (razors and blades)
    40 basis points
    Q3 FY26

    As the company cycled elevated promotional activity from a year ago and changes in couponing approach, primarily in the drug channel.

    US sun care category consumption decline
    approximately 2%
    Q3 FY26

    Reported for the quarter.

    US sun care value share decline
    60 basis points
    Q3 FY26

    Market share declines in Banana Boat more than offset 110 basis points share growth in Hawaiian Tropic.

    Sun care category consumption growth
    1.4%
    YTD through mid-July

    A broader year-to-date market share view provides a more accurate read on the season than any single quarter.

    International organic sales impact from supply chain
    350 to 400 basis points
    Q3 FY26

    Impact to international organic sales, viewed as transitory. Without this, international growth would have been around 3%.

    Billy Shave growth
    low to mid-single digit
    Q3 FY26

    Continued share gains and increased household penetration for the core Billy shave business.

    Private label shave decline
    10%
    Q3 FY26

    Reported decline for private label shave.

    Branded shave growth
    nearly 1%
    Q3 FY26

    Reported growth for branded shave.

    Industry KPIs

    10
    MetricValueDetails
    Portfolio rotationFeminine Care divestitureN/A
    Underlying sales growth1.1%%
    Power brands contribution—
    Brand marketing investment14.6%% of net sales
    Market volume growth benchmark1.4%%
    Brand health superiority scoresimprovingqualitative
    Market value share by geographyheld steady or increasedqualitative
    Productivity cost savings programapproximately 200 basis pointsbps
    Developed vs emerging market splitNorth America organic sales increased 3%%
    Underlying operating margin bridge—

    Deals & partnerships

    1
    N/ADivestiture of feminine care business

    The feminine care divestiture has made the portfolio simpler and allows for more focused investment. It also created stranded costs that the operating model transformation aims to offset.

    Capital programs

    1
    Wet Shave Manufacturing Consolidationunderway
    Start: post-2015

    Benefit: Simplify manufacturing network, modernize capabilities, improve service levels, create structurally lower cost position, deliver meaningful productivity, margin, working capital, and free cash flow benefits.

    The largest operational initiative undertaken since becoming a standalone company in 2015. It created some temporary disruption and affected supply in certain international markets during Q3, but meaningful progress is being made against the implementation plan.

    Risks & headwinds

    9
    Market uncertainty and increased pressureongoing

    N/A

    Mitigation: Strengthening brands and capabilities, improving execution, accelerating operating model transformation.

    Middle East conflict impact on international salesQ3 FY26

    Contributed to 1.4% decline in International organic sales in Q3 FY26.

    Mitigation: Expect overall international to return to growth in Q4 as supply chain challenges improve.

    Private label supply disruptionQ3 FY26

    Contributed to 1.4% decline in International organic sales and 1.9% decline in Wetshave organic net sales in Q3 FY26. Impacted international by 350-400 bps.

    Mitigation: Much of the production capacity issue has been solved; expect improvement in Q4.

    Weaker-than-anticipated start to sun seasonQ3 FY26 (Europe and LATAM)

    Contributed to 1.4% decline in International organic sales in Q3 FY26.

    Mitigation: Expect overall international to return to growth in Q4.

    Inflation across certain commodities and input costsQ3 FY26 and ongoing

    Higher than expected in Q3 FY26, contributing to 30 bps gross margin decline.

    Mitigation: Partially offset by tariff refunds and higher productivity. Expect productivity savings and modest inflation to drive FY27 gross margin gains.

    Heightened competitive and promotional environmentQ3 FY26 and ongoing

    US razors and blades category consumption increased 160 bps, but branded share declined 40 bps in Q3 FY26.

    Mitigation: Improving commercial execution, increased distribution, and brand investments.

    Tariff impactsongoing

    Modest tariff refunds partially offset inflation in Q3 FY26. Tariffs are 'hurting us' going forward.

    Mitigation: Tariff mitigation is a factor in Q4 gross margin acceleration.

    Oil and commodities complex volatilityongoing

    N/A

    Mitigation: Not giving guidance on oil expectations, but current spot rate is 'materially less' than previously quantified and 'much more manageable'.

    Potential slowdown in category growthFY27

    N/A

    Mitigation: Planning accordingly for stable, potentially slower growth, but confident in achieving low single-digit sales growth through internal capabilities.

    What to watch in Q4 FY26

    5

    International Sales Growth

    Q4 FY26
    Currentdeclined 1.4% in Q3 FY26
    Targetreturn to growth

    Why it matters

    International markets were a drag on Q3 performance; their return to growth is critical for overall top-line acceleration and full-year targets.

    return to organic sales growth in third quarter, we expect growth to strengthen in the fourth quarter, supported by a return to normalized growth trends in international and continued growth in North America.

    Q&A highlights

    6

    Peter asked about the confidence behind the implied Q4 acceleration given Q3 international/wet shave weakness, and if the company is exiting FY26 with a better underlying growth profile for FY27.

    Rod Little expressed confidence in Q4 acceleration due to all branded segments growing, cycling of Q3 transitory supply chain impacts (especially private label in Europe/LATAM), and unchanged A&P spend with a Q4 profile shift. Fran added that international Q3 impact was 350-400 bps, making underlying growth ~3%, and Q4 expects mid-single-digit international growth. For FY27, Rod stated increasing confidence in low single-digit growth, citing strong brand momentum (Cremo, Hawaiian Tropic), improved supply chain, and net distribution gains.

    “I think if you look at the second half in total, we think that's a good proxy as we look out to 27 for 2020. top line growth rate. We should be growing next year.”

    asked by Peter Graham · answered by Rod Little

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Transformation & Operating Model

    Edgewell is accelerating its operating model transformation, investing in technology, advanced analytics, and AI-enabled capabilities. This initiative aims to simplify the organization, improve speed and agility, enhance decision-making, and create a structurally lower cost base. These actions are intended to offset stranded costs associated with the feminine care divestiture, positioning Edgewell as a faster, more efficient, and responsive organization, and are expected to drive more consistent growth, profitability, and cash flow over time⏳.

    02

    Wet Shave Manufacturing Consolidation

    The company's largest operational initiative since becoming a standalone entity in 2015 is the wet shave manufacturing consolidation. Its objectives are to simplify the manufacturing network, modernize capabilities, improve service levels, and achieve a structurally lower cost position. While this project caused temporary disruption and affected supply in certain international markets during Q3, management expects performance to improve, leading to meaningful productivity, margin, working capital, and free cash flow benefits.

    03

    North America Performance Improvement

    The U.S. business, identified as Edgewell's largest value creation opportunity, returned to growth in Q3. This improvement was driven by enhanced commercial execution, increased distribution gains, and traction from strategic initiatives. Specific brands like Hawaiian Tropic, Cremo, and Schick demonstrated strong momentum, with improving awareness metrics, increased branded search activity, and strengthening consumer engagement, reinforcing confidence in the investments made.

    04

    Brand Strength & Momentum

    Edgewell highlighted significant brand strength, particularly with Cremo and Hawaiian Tropic. Cremo achieved its seventh consecutive quarter of approximately 20% or more growth in grooming and is now a top three brand in men's grooming at a top retailer. Hawaiian Tropic advanced from the number six brand in sun care a year ago to number four, showing the largest increase in household penetration in the category, demonstrating effective brand building.

    05

    Capital Allocation & Balance Sheet

    The company maintains a disciplined capital allocation strategy, prioritizing investments in high-return opportunities within the business. This approach aims to strengthen the balance sheet, reduce net debt leverage, and maintain the necessary flexibility to create long-term shareholder value. The goal is to improve structural profitability, allowing for continued investment while also building margin.

    06

    Consumer Environment & Category Trends

    Management observed remarkable consumer resilience despite the dynamic and challenging operating environment. While categories are experiencing a slight slowdown and increased competitiveness, there has not been a meaningful change in overall trend direction. For fiscal year 2027 planning, the company anticipates stable, potentially slower, category growth, but expects to achieve low single-digit sales growth driven by internal capabilities and brand momentum.

    AI-generated summary of the company’s earnings call. Not investment advice.