The company completed the $340 million sale of its Feminine Care business to narrow its strategic focus on core grooming and skin care categories. Quarterly results were impacted by restructuring charges and core inflation, though organic growth in the Sun and Skin Care segment partially offset volume declines in the Wet Shave business.
Edgewell Personal Care Company (NYSE: EPC) reported a GAAP diluted loss per share of $1.41 for its first fiscal quarter ended Dec. 31, 2025, compared to a loss of $0.04 in the prior-year period. On a continuing operations basis, which excludes the recently divested Feminine Care unit, the company recorded a net loss of $29.2 million, or $0.63 per share. Despite the quarterly loss, the company maintained its full-year organic sales and adjusted earnings guidance for its remaining core portfolio.
Strategic Divestiture Driving Financial Performance
The primary driver of the company’s financial results was the completion of the Feminine Care business divestiture for $340 million. This transaction is part of a broader portfolio transformation intended to reposition Edgewell as a focused consumer products entity centered on its Wet Shave and Sun and Skin Care segments. Proceeds from the sale are designated for debt reduction, specifically to pay down balances on the company’s U.S. revolving credit facility. In tandem with the divestiture, Edgewell is executing a restructuring program aimed at improving manufacturing efficiency, which includes the further consolidation of its Wet Shave operations.
Currency Gains Offset Organic Sales Decline
Net sales from continuing operations increased 1.9% to $422.8 million, supported by a $9.6 million favorable impact from currency movements. Organic net sales, however, declined 0.5% during the quarter. Performance varied by segment, as Sun and Skin Care organic sales grew 8.0%, driven by higher volumes in North America and a nearly 27% increase in the Cremo brand. This growth was offset by a 3.9% organic sales decline in the Wet Shave segment, attributed to unfavorable shipping timing in Japan and higher promotional spending in North America. Gross margin contracted by 350 basis points to 38.1%, as 450 basis points of core inflation, tariffs, and volume absorption outweighed 240 basis points of productivity savings. The company recorded $24.4 million in pre-tax restructuring charges during the quarter.
FY2026 Outlook and Strategic Priorities
Management’s strategy is focused on portfolio simplification and operational agility following the removal of the Feminine Care business. For the full fiscal year 2026, Edgewell expects reported net sales to increase between 0.5% and 3.5%, with organic sales ranging from a 1.0% decrease to a 2.0% increase. Adjusted EPS is projected at $1.70 to $2.10, reflecting a $0.44 per share reduction due to the divestiture. Capital allocation priorities include a quarterly cash dividend of $0.15 per share and the utilization of a $100 million share repurchase authorization. The company has increased its estimated full-year restructuring charges to $65 million, up from the previous estimate of $49 million.
Global Headwinds Weigh on Edgewell Results
Edgewell’s results highlight the impact of persistent core inflation and shifting global trade dynamics on the consumer staples sector. The company’s margin compression reflects broader industry challenges in balancing productivity gains against rising labor, warehousing, and transportation costs. While favorable currency movements provided a $0.07 per share benefit to adjusted earnings this quarter, the company remains exposed to localized volatility and evolving global financial risks, including potential changes to tariff structures. The shift toward higher-growth categories like Sun Care is intended to mitigate volume declines in more mature categories like Wet Shave.