Edgewell Personal Care Co (EPC) Q4 2024 Earnings Call Highlights: Navigating Growth and Challenges

GuruFocus News
4 min read

In This Article:

  • Organic Net Sales Growth: Slight increase of 0.2% for fiscal year 2024.

  • International Markets Growth: Over 7% increase, contributing to 40% of total revenue.

  • North America Organic Net Sales: Decreased by about 4%.

  • Adjusted Gross Margin: Increased by 140 basis points year-over-year.

  • Adjusted Operating Margin: Increased by 100 basis points for the year.

  • Adjusted Earnings Per Share Growth: 18% increase at constant currency.

  • Free Cash Flow Generation: $175 million for fiscal year 2024.

  • Net Debt Leverage Ratio: 3.1x at the end of the fiscal year.

  • Share Repurchases: $18.3 million in the fourth quarter.

  • Dividend Payout: $0.15 per share for the fourth quarter.

  • Billie Brand Market Share: Gained 260 basis points in women's shave.

  • Sun Care Organic Net Sales: Decreased by 3.5% in the fourth quarter.

  • Fem Care Organic Net Sales: Decreased by about 9% in the fourth quarter.

  • Adjusted EBITDA: $78.9 million in the fourth quarter.

  • Cash on Hand: $209 million at the end of the fiscal year.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Edgewell Personal Care Co (NYSE:EPC) achieved slight organic net sales growth and expanded adjusted gross margins in fiscal 2024.

  • The company delivered double-digit adjusted earnings per share growth at constant currency for the second consecutive year.

  • International markets grew over 7% and now constitute about 40% of total revenue, demonstrating strong global performance.

  • The Billie brand gained 260 basis points of market share in women's shave, indicating successful brand expansion.

  • Edgewell Personal Care Co (NYSE:EPC) reported significant productivity savings, contributing to gross margin accretion and strong bottom-line results.

Negative Points

  • Top line growth was below expectations, with organic net sales decreasing 2.8% in the fourth quarter.

  • North America organic net sales declined about 6%, with specific declines in Wet Shave, Fem Care, and Wet Ones.

  • The US Sun Care category consumption declined about 6% in the quarter due to unfavorable weather conditions.

  • The company faced supply chain challenges, particularly in the grooming, skin, and preps businesses, impacting sales.

  • Currency fluctuations are expected to be a headwind to earnings in fiscal 2025, adding financial pressure.

Q & A Highlights

Q: Can you go through your confidence levels on organic sales growth for fiscal '25? What are the key drivers for returning to mid-single-digit growth in international markets and stabilizing the North America business? A: Daniel Sullivan, Principal Financial Officer, highlighted confidence in profit expectations even if sales fall short, citing relentless productivity efforts and cost focus. He emphasized international growth, which is expected to be mid-single-digit, driven by brand activation, innovation, and strong team performance. In North America, tailwinds are expected from Sun Care, grooming, and the Billie brand expansion. Rod Little, CEO, added confidence in the growth profile, with 70% of the business expected to grow mid-single digits, and efforts to stabilize the US Shave and Fem Care segments.

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