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Edgewell Personal Care Co - $EPC - Earnings Analysis: Solid first quarter results operationally.

By sagebytes in Commodities —

Business Model

Edgewell Personal Care generates revenue through the sale of shaving systems and disposables, shave preparations, feminine care products, sun and skin care products, and wet wipes.

Revenue Sources

  • Wet Shave (Men's Systems, Women's Systems, Disposables, and Shave Preps)
  • Sun and Skin Care (Sun Care, Wet Ones, Bulldog, Jack Black and Cremo)
  • Feminine Care (Tampons, Pads, and Liners)

Income Statement Analysis

  • Net sales decreased 2.1% compared to the prior year quarter.
  • Organic net sales decreased 1.3%.
  • GAAP Diluted Net (Loss) Earnings Per Share were $(0.04), compared to $0.09 in the prior year quarter.

Balance Sheet Analysis

  • Cash and cash equivalents decreased from $209.1 million to $175.5 million.
  • Total assets decreased from $3730.9 million to $3702.4 million.
  • Total stockholders' equity decreased from $1584.1 million to $1501.0 million.
  • Total liabilities increased from $2146.8 million to $2201.4 million.

Cash Flow Analysis

  • Net cash used for operating activities increased to $(115.6) million from $(72.9) million.
  • Net cash used for investing activities increased to $(15.7) million from $(6.0) million.
  • Net cash provided by financing activities increased to $109.9 million from $69.8 million.
  • Cash and cash equivalents decreased to $175.5 million from $214.2 million.

Capital Allocation

The Board of Directors declared a quarterly cash dividend of $0.15 per common share on February 6, 2025. During the first quarter of fiscal 2025, the Company paid dividends totaling $7.9 million to stockholders and completed share repurchases of approximately 0.8 million shares at a total cost of $30.3 million. As of December 31, 2024, the Company had 2.2 million shares of common stock available for repurchase in the future under the Board’s 2018 authorization.

Management Commentary

We started the fiscal year with solid first quarter results that were operationally as we expected.

We saw continued top line growth across our international markets and further momentum in our Right to Win businesses, and we exceeded our gross margin expectations, driven by further productivity savings.

This resulted in better than expected constant currency adjusted EBITDA and earnings per share.

Our performance continues to demonstrate traction against our broader strategic priorities though the strengthening US dollar significantly impacted our top and bottom-line results for the quarter, and we expect further additional headwinds for the year.

Overall Sentiment: Cautiously optimistic, focused on driving operational performance and executing in areas within our control, despite headwinds from the strengthening US dollar.

Recommendation

Rating: Hold

Reason for Rating: Hold due to mixed performance and currency headwinds despite operational improvements.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.

Generated on: 2/11/2025, 6:40:15 AM