Personal Care manufacturer Edgewell experiences a 20-year low amidst market downturn - Potential for investment?
Edgewell Personal Care Faces Challenges Amidst Earnings Miss
Edgewell Personal Care (EPC), the company behind popular brands such as Schick, Playtex, and Hawaiian Tropic, reported disappointing Q3 2025 results, falling short of Wall Street expectations[1][2]. The company's adjusted EPS came in at $0.92, missing the projected $1.00, and net sales of $627.2 million were lower than the expected $655.17 million, resulting in a 3.2% year-over-year decline in sales[1][2].
The company attributed the underperformance to a "very weak" Sun Care season in North America and Latin America, along with ongoing challenges from tariffs and foreign exchange rates[1][2]. As a result, EPC lowered its full-year adjusted EPS guidance to $2.65 from the previous range of $2.85 to $3.05[1].
North American sales dropped by 8%, primarily due to lower volumes and increased promotional activity in Sun Care, Wet Shave, and Feminine Care categories, while international markets experienced 2.2% organic growth, driven by price gains in Wet Shave and Sun & Skin Care sectors[1][2].
Despite these challenges, EPC's CEO Rod Little highlighted ongoing strategic investments in key North American brands such as Hawaiian Tropic, Cremo, and Hydro Silk, intended to strengthen the portfolio for growth beyond 2025[2]. The company also maintained strong international performance and supply chain productivity gains[2].
The market reacted negatively, with EPC shares declining approximately 22% following the earnings release[4]. However, the company declared a quarterly dividend of $0.15 per share and retains solid liquidity with about $199.6 million cash and nearly $290 million available in revolving credit as of June[1].
Background
Edgewell Personal Care (EPC) was created in July 2015, and since then, its revenues have ranged from $1.95 billion to $2.61 billion over the past decade[5]. In fiscal 2015, EPC had $2.42 billion in revenue and an EBITDA profit of $426 million[6].
Stock Performance
EPC's stock hit an all-time high of $107.37 on May 1, 2015, but it recently hit a 20-year low on Tuesday, losing nearly 22% in the past five days[4]. The company's shares trade at just 7.7 times its 2025 EPS, while the S&P 500 forward P/E is 22.3x and the S&P 500 Consumer Staples forward P/E is 21.6x, suggesting EPC is dirt cheap[7].
Options Activity
There was a trade for three contracts on the Feb. 20/2026 $25 call for EPC, with the ask price of the option being $0.70[8]. Buying a $25 call for EPC costs less than buying 100 shares, but the lack of volume makes getting options for EPC challenging[9].
Analyst Opinions
Four out of eight analysts rate EPC a Buy, with a target price of $31, over 50% higher than its current share price[10].
Looking Ahead
Edgewell expects its 2025 EBITDA profit to be $312 million, down from $338 million a year ago[1]. Despite the near-term challenges, management expects ongoing strategic investments and supply chain efficiencies to position the company for stronger growth and value creation in 2026 and beyond[1][2].
- Despite the recent earnings miss, Edgewell Personal Care (EPC) is maintaining its focus on strategic investments in key business areas like Hawaiian Tropic, Cremo, and Hydro Silk, aiming to strengthen the portfolio for future growth beyond 2025.
- Analysts remain optimistic about EPC's prospects, with four out of eight rating it as a Buy, and a target price of $31, over 50% higher than its current share price, suggesting potential for growth in the finance and investing sector.
