Edgewell Personal Care (Edgewell), whose brand portfolio spans across the shaving, grooming, sun and skin care, and feminine care categories, has reported Q2 FY2025 net sales of $580.7 million, a 3.1% decrease compared to the same quarter last year. Organic net sales, which the company noted exclude currency fluctuations, declined 1.5%.
By the overall numbers
According to the company, sales growth in international markets was offset by declines in North America. Specifically, international sales rose 2.9%, while organic sales in North America fell 3.9% due to lower volumes in Wet Shave, Feminine Care, and Sun Care.
Despite the disparity, gross margin improved by 100 basis points to 44.1%, with Edgewell attributing the increase to productivity gains. “Our focus on business fundamentals has led to top-line growth in our International business and accelerated gross margin expansion through excellent execution of our productivity program,” said the company in its earnings release.
Performance by segment
By segment, Wet Shave net sales declined 2.6%, though the segment posted a 15.3% increase in profit, reflecting stronger gross margins. Sun and Skin Care net sales fell 2.0%, with profits down 6.6%, while Feminine Care saw a 9.1% sales drop and a 64.4% decline in segment profit.
The company cited unfavorable impacts from currency, lower gross margin, higher SG&A expenses, lower gross profit, and higher marketing expenses as a variety of contributing factors to the segments’ performance results.
In response to the net sales drops, Edgewell executives reaffirmed the company’s commitment to investing in its core brands, increasing advertising and sales promotion expenses to $65.5 million, up from $63.1 million a year ago.
“While execution across much of the business is strong, we recognize that work remains to better position our portfolio in the competitive US market,” the company stated. “Therefore, we remain in an investment stance, reinforcing brand equity and supporting innovation.”
Closer examination of North American market share
The decline in the North American market was a key point of discussion in the company’s fiscal report. Edgewell President and CEO Rob Little addressed the lackluster performance in a media statement: “While execution across much of the business is strong, we recognize that work remains to better position our portfolio in the competitive US market…we expect the challenging economic environment to negatively impact consumer sentiment and behavior, moderating our top-line expectations.”
Despite this, he added, “We will incrementally invest, focusing on our Wet Shave and Sun Care portfolios in the US.”
During the Q&A portion of the company’s earnings call webcast, questions were raised to understand better the perceived ‘disappointment’ in the US performance. Little responded that “If you take stock of what’s going on…the fact is our categories remain ok. While they’re slowing, they’re still growing, just at a slower rate both domestically and internationally.“
Little continued to explain that “our relative market share in those categories is improving in every single market. We have real momentum…Billie and Hawaiian Tropic being the fastest growing brands in the entire set where we compete.“
He concluded that “I have a lot of confidence we will see a pivot in North America in the second half of the year.”
Looking ahead, Edgewell adjusted its full-year outlook downward, and the company now forecasts organic net sales growth to be flat to 1%, down from its earlier 1% to 3% projection.