EPC — Edgewell Personal Care Company

Summary of Edgewell's Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted Earnings Per Share (EPS): $0.60, down from $0.69 in Q2 2025.
• GAAP Diluted EPS: $0.09 compared to $0.43 in the prior year.
• Adjusted EBITDA: $73.8 million, down from $84.7 million year-over-year.
• Organic Net Sales: Decreased by 240 basis points; North America down 4.8%, while international sales increased by 1%.
• Adjusted Gross Margin: Decreased by 310 basis points due to inflation and tariffs, with productivity savings of 220 basis points.
• Net Cash Used by Operating Activities: $71.6 million for the first six months.
• Share Repurchases: Approximately $16 million during the quarter.

2. Strategic Updates and Business Highlights

• Focus on Four Priorities: International growth, innovation, productivity, and U.S. transformation.
• Market Share Gains: U.S. value share increased by approximately 50 basis points, with notable growth in Wet Shave, Grooming, Sun Care, and Skin Care.
• Innovation Pipeline: New product launches planned for the second half, including Hydro and Intuition relaunches in Japan, and new products across Grooming and Sun Care in the U.S.
• Supply Chain Optimization: Progress on Wet Shave manufacturing consolidation expected to yield savings starting in fiscal 2027.

3. Forward Guidance and Outlook

• Organic Net Sales Guidance: Expected to be down 1% to up 2% for fiscal 2026, with a stronger second half anticipated.
• Adjusted EPS Guidance: Maintained in the range of $1.70 to $2.10.
• Adjusted EBITDA Guidance: Expected to remain unchanged at $245 million to $265 million.
• Gross Margin Improvement: Anticipated to expand in the second half due to pricing actions and productivity gains.

4. Bad News, Challenges, or Points of Concern

• Inflationary Pressures: Increased costs from oil and commodities, particularly due to the conflict in the Middle East, expected to impact margins.
• Sales Declines: Continued challenges in the Sun Care and Wet Shave categories, particularly in North America.
• Competitive Pressures: Increased promotional intensity in the Wet Shave category, particularly for women's products.
• Uncertain Macro Environment: Risks associated with geopolitical tensions and their potential impact on consumer behavior and sales.

5. Notable Q&A Insights

• Inflation Impact: Management quantified the inflation impact from the Middle East situation at approximately $3 million to $5 million, primarily affecting margins.
• Retail Inventory Confidence: Management expressed confidence that retailers would need to replenish inventory due to strong sell-through rates.
• Future Pricing Power: Potential for targeted pricing increases in response to sustained commodity inflation, although no specific commitments were made.
• Sales Growth Expectations: The second half of fiscal 2026 is expected to show improved sales growth, particularly in Sun Care and Grooming, with confidence in market share gains continuing.

Overall, Edgewell's Q2 2026 results reflect a mix of challenges and opportunities, with strategic initiatives aimed at driving growth despite external pressures. The company remains cautiously optimistic about the second half of the fiscal year while navigating a complex macroeconomic landscape.