Edgewell Personal Care Reports $2.1 Million Net Loss in Q1 Fiscal 2025

Edgewell Personal Care Company reported a net loss of $2.1 million for the first quarter of fiscal 2025, a significant decline from net earnings of $4.8 million in the same period last year. This loss translates to a diluted loss per share of $0.04, compared to earnings per share of $0.09 in the prior year. The company's net sales decreased by 2.1% to $478.4 million, down from $488.9 million in the previous year, with organic sales declining by 1.3%. The decrease in sales was attributed to lower volumes and increased promotional levels, particularly in North America, which saw a 3.9% decline in organic sales.

In terms of operational performance, Edgewell's gross profit fell to $191.6 million, a decrease of 3.1% from $197.7 million in the prior year, resulting in a gross margin of 40.1%. The decline in gross margin was influenced by core inflation, lower volume absorption, and an unfavorable product mix. Selling, general, and administrative expenses (SG&A) remained relatively stable at $102.9 million, while advertising and sales promotion expenses increased by 4.4% to $50.3 million. Research and development expenses also rose slightly to $13.9 million.

The company is undergoing significant strategic changes, including a restructuring initiative aimed at improving operational efficiency and consolidating its manufacturing facilities in Mexico. This restructuring is expected to incur approximately $29 million in charges throughout fiscal 2025. In the first quarter, Edgewell recorded $4.2 million in restructuring charges, down from $6.8 million in the same period last year. The company also reported a gain of $0.9 million from an equity investment, which contributed positively to its financial results.

Geographically, Edgewell's sales in the United States decreased to $244.6 million from $254.2 million, while international sales remained relatively stable at $233.8 million. The Wet Shave segment, which includes brands like Schick and Wilkinson Sword, saw a decline in sales to $294.5 million, while the Sun and Skin Care segment experienced growth, increasing to $120.6 million. The Feminine Care segment, however, faced challenges, with sales dropping to $63.3 million.

Looking ahead, Edgewell anticipates continued challenges in the market, particularly in North America, but expects growth in international markets driven by price and volume gains. The company remains focused on its restructuring efforts and improving its operational model to enhance profitability. Despite the current losses, Edgewell's management believes that its cash flow from operations and available credit will be sufficient to meet its working capital needs and support future growth initiatives.