Edgewell Personal Care narrows 2026 outlook as margins compress
The consumer goods company reported net sales of $570.1 million for the third quarter.
Edgewell Personal Care (EPC), the consumer goods company, reported net sales of $570.1 million for the third quarter, an increase of 1.7% compared to the prior year.
The results reflected a return to growth in the North American market, where organic net sales rose 3.0%, though these gains were partially offset by a 1.4% organic decline in international markets. Organic net sales for the quarter increased 1.1%.
Profitability metrics declined during the period. Gross margin fell 210 basis points to 42.5% of net sales, while adjusted gross margin decreased 30 basis points to 44.5%. Adjusted operating margin compressed to 9.3% of net sales, down from 11.3% in the same quarter last year.
Performance varied by segment. Sun and Skin Care organic net sales rose 5.0%, supported by mid-single digit growth in North American Sun Care and global performance in Grooming and Skin Care. Conversely, Wet Shave organic net sales decreased 1.9%, and organic segment profit fell 24.7% as the company incurred higher marketing and SG&A expenses.
Adjusted earnings per share remained flat at $0.72. GAAP diluted EPS declined to $0.26 from $0.46 in the prior year quarter.
Edgewell narrowed its full-year 2026 guidance. Reported net sales are now expected to increase between 1.3% and 1.8%, and organic net sales are projected to be flat to 0.5%. The company narrowed its adjusted EPS guidance to a range of $1.80 to $2.00 and adjusted EBITDA guidance to $250 million to $260 million.
Margin expectations for the full year were also revised. Adjusted gross margin guidance was lowered to an increase of approximately 20 basis points, and adjusted operating margin guidance was lowered to a decrease of 80 basis points. Pre-tax restructuring charges for the year were raised to approximately $92 million.
The company completed the divestiture of its Feminine Care business for $340 million, which it now treats as discontinued operations. Edgewell used proceeds from the sale to pay down its U.S. revolving credit facility, which reduced interest expense to $16.7 million from $19.4 million in the prior year quarter.