Edgewell Personal Care Co. - 10-Q Summary (Q3 2026)
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026 (Third Quarter of Fiscal 2026). Edgewell Personal Care Company operates in two primary segments: Wet Shave (Schick, Wilkinson Sword) and Sun and Skin Care (Banana Boat, Hawaiian Tropic, Jack Black). A material event during this period was the completed divestiture of the Feminine Care segment to Essity on February 2, 2026, for approximately $340 million. Results for this segment are now reported as discontinued operations.
Key Financial Metrics
| Metric | Q3 2026 (3 Months) | Q3 2025 (3 Months) | YTD 2026 (9 Months) | YTD 2025 (9 Months) |
|---|---|---|---|---|
| Net Sales | $570.1 million | $560.4 million | $1,512.4 million | $1,492.1 million |
| Gross Profit | $242.5 million | $250.1 million | $620.4 million | $659.4 million |
| Gross Margin | 42.5% | 44.6% | 41.0% | 44.2% |
| Operating Income | $25.0 million | $45.0 million | $24.5 million | $103.2 million |
| Net Earnings (Continuing Ops) | $12.3 million | $21.5 million | $(12.9) million | $32.1 million |
| Net Earnings (Total) | $13.7 million | $29.1 million | $(62.6) million | $56.0 million |
| Diluted EPS (Continuing Ops) | $0.26 | $0.46 | $(0.28) | $0.67 |
| Cash and Equivalents | $397.1 million (as of June 30, 2026) | |||
| Long-Term Debt | $1,245.0 million (as of June 30, 2026) |
Material Changes vs. Prior Period
- Revenue: Q3 net sales increased 1.7% year-over-year, driven by a 1.1% increase in organic sales. North America saw 3.0% organic growth, while International sales declined 1.4% due to Middle East conflict disruptions and supply chain impacts from Wet Shave consolidation.
- Profitability: GAAP operating income declined significantly in Q3 (down 44%) and YTD (down 76%) primarily due to $24.5 million in restructuring charges for the quarter and $71.9 million YTD. These charges relate to operating model redesign and facility consolidations in Mexico and Wet Shave operations.
- Discontinued Operations: The YTD net loss includes a $37.4 million goodwill impairment charge and a $2.2 million loss on assets held for sale related to the Feminine Care divestiture.
- Liquidity: Cash balances increased to $397.1 million, bolstered by $338.9 million in proceeds from the Feminine Care sale. The company used these proceeds to fully repay its $140 million Revolving Credit Facility.
Guidance, Outlook, and Risks
- Restructuring Outlook: Management expects to incur approximately $92 million in pre-tax restructuring charges for the full fiscal year 2026 to streamline operations and supply chains.
- Adjusted Performance: On an adjusted non-GAAP basis, Q3 diluted EPS from continuing operations was flat at $0.72 compared to the prior year. Adjusted net earnings were $33.5 million.
- Tariff Refunds: The company recognized $5.3 million in cost reductions in Q3 related to refunds of tariffs previously paid under the International Emergency Economic Powers Act (IEEPA) following a Supreme Court ruling. Future refund amounts remain uncertain.
- Key Risks:
- Supply chain disruptions and cost inflation (raw materials, energy, logistics) exacerbated by the conflict in the Middle East.
- Execution risks associated with ongoing manufacturing consolidations in Mexico and Wet Shave operations.
- Foreign currency fluctuations impacting reported earnings.
Investor Verification Checklist
- Restructuring Execution: Verify the timeline and cost savings realization of the Mexico facility consolidation and Wet Shave operational changes, given the $92 million expected charge for FY2026.
- Organic Sales Trends: Monitor the divergence between North America growth and International declines, specifically assessing the duration of Middle East-related supply chain disruptions.
- Tariff Refund Realization: Track the finalization of IEEPA tariff refund claims and the potential for additional asset recognition beyond the $5.3 million already recorded.
- Debt Profile: Confirm the impact of the Revolver paydown on future interest expense and liquidity flexibility, noting the remaining $1.25 billion in fixed-rate senior notes.
- Discontinued Operations: Review the final tax implications and transition service agreement (TSA) profitability related to the Feminine Care divestiture.