Q3 2026 Edgewell Personal Care Co Earnings Call Transcript
Key Points
- Organic net sales returned to growth in Q3, with North America exceeding expectations and growing 3%.
- Adjusted EPS and adjusted EBITDA came in ahead of expectations for the quarter.
- Strong performance from priority brands: Cremo grew over 20% for the seventh consecutive quarter, and Hawaiian Tropic became the #4 sun care brand, up from #6 a year ago.
- Branded Wet Shave returned to growth, and Billie continued to gain market share with increased household penetration.
- Management expects gross margin expansion in fiscal 2027, driven by productivity savings and the cycling of one-time costs.
- The company is maintaining its full-year A&P investment levels, supporting brand campaigns and long-term growth.
- Distribution gains and improved commercial execution are driving broad-based progress in the U.S. market.
- International organic sales declined 1.4% in Q3, impacted by the Middle East conflict, private label supply disruptions, and a weak start to the sun season in Europe and LatAm.
- Adjusted gross margin declined 30 basis points year-over-year due to higher inflation and unfavorable mix, partially offset by productivity and tariff refunds.
- Wet Shave organic net sales declined 1.9% due to continued private label supply disruptions, which also pressured overall share.
- Adjusted operating income fell to $53 million from $63.6 million last year, reflecting lower gross margin and higher A&P and SG&A expenses.
- The company faces ongoing external pressures from tariffs and potential commodity inflation, which have led to a modest reduction in the full-year gross margin outlook.
- The wet shave manufacturing consolidation caused temporary supply disruptions that extended longer than anticipated, impacting international markets in Q3.
- The full-year guidance range for organic sales remains wide (flat to +50 bps), reflecting market volatility and uncertainty.
Good morning, and welcome to Edgewell's third-quarter fiscal year 2026 earnings call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Chris Goff, Vice President, Investor Relations. Please go ahead.
Good morning, everyone, and thank you for joining us this morning for Edgewell's Third Quarter Fiscal Year 2026 Earnings Call. With me this morning are Rod Little, our President and Chief Executive Officer, and Dan Sullivan, our Chief Financial Officer. Rod will kick off the call and then hand it over to Dan to discuss our third quarter and full year fiscal '26 outlook. We will then transition to Q&A. This call is being recorded and will be available via replay on our website, www.edgewell.com.
During this call, we may make statements about our expectations for future plans and performance. This might include future sales, earnings, advertising
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