Breaking Down Edgewell Personal Care Company (EPC) Financial Health: Key Insights for Investors

If you are looking at Edgewell Personal Care Company (EPC), the headline numbers from their fiscal 2025 results tell a story of strategic transition amid market pressure, demanding a sharp analysis of where the real value lies. The company finished the year with total net sales of $2,223.5 million, a decline of 1.3%, driven by a North American organic net sales drop of 4.4% that overshadowed a solid 3.5% organic growth in their International markets. This top-line softness, plus currency headwinds, compressed profitability, pushing full-year adjusted earnings per share (EPS) down to $2.52, a meaningful drop from the prior year. Still, management is taking clear action, like divesting the Feminine Care business for $340 million to focus on core categories, plus they returned nearly $120 million to shareholders through dividends and buybacks in fiscal 2025; but the current net debt leverage ratio of 3.9x means every dollar of free cash flow matters, so let's break down the near-term risks and opportunities in their Shave, Sun, and Skin Care segments.

Revenue Analysis

You want to know where Edgewell Personal Care Company (EPC) is actually making its money, and more importantly, how reliable those streams are. Honestly, the fiscal year 2025 numbers show a company in transition, which is always a mix of risk and opportunity. The direct takeaway is that while total revenue dipped slightly, the underlying trends in their core segments and international markets tell a more nuanced story of strategic focus.

For the full fiscal year ending September 30, 2025, Edgewell Personal Care Company reported total net sales of $2,223.5 million. That's a slight year-over-year (YoY) decrease of 1.3%. This decline wasn't just due to currency fluctuations; the organic net sales (which strips out the impact from currency movements) also fell by 1.3%. You can't ignore that number, but you also have to look at the segment breakdown to see where the strength is building.

Segment Contribution and Growth Drivers

Edgewell Personal Care Company operates across three primary business segments: Wet Shave, Sun and Skin Care, and Feminine Care. The Wet Shave segment remains the largest revenue driver, but the Sun and Skin Care segment showed the most dynamic growth in the final quarter of the year. This shift in momentum is key to their future.

Here's the quick math on how each segment contributed to the total $2,223.5 million in net sales for fiscal 2025:

• Wet Shave: $1,218.9 million (The biggest piece of the pie).
• Sun and Skin Care: $743.1 million (A growing focus area).
• Feminine Care: $261.5 million (The segment they are divesting).

The regional performance is also telling. North America declined 4.4% in organic net sales, largely due to volume drops in Wet Shave, Feminine Care, and Sun Care. But, international markets delivered organic growth of 3.5%, driven by higher volumes and increased pricing. That international strength is a defintely a bright spot.

The Strategic Revenue Stream Pivot

The most significant change to the revenue structure is the planned divestiture (sale) of the Feminine Care business to Essity for $340 million. This isn't just a balance sheet move; it's a strategic pivot. Management is betting on a more focused portfolio-Shave, Sun and Skin Care, and Grooming-where they believe they have a clearer competitive advantage and stronger margins.

What this estimate hides is the one-time impact of the sale and the subsequent focus on the remaining core areas. You're seeing a company intentionally shrinking one revenue stream to invest more aggressively in the others. For example, the Sun and Skin Care segment, which includes brands like Banana Boat and Wet Ones, saw organic net sales increase by a robust 11.1% in the fourth quarter of 2025. This shows the potential of the segments they are choosing to keep and grow. For a deeper dive into the company's long-term direction, check out their Mission Statement, Vision, & Core Values of Edgewell Personal Care Company (EPC).

Profitability Metrics

You're looking at Edgewell Personal Care Company (EPC) because its brands-like Schick, Billie, and Banana Boat-are household names, but their recent profitability metrics tell a complex story about cost pressure and strategic restructuring. The headline is this: while gross margin remains solid for the Consumer Packaged Goods (CPG) sector, the GAAP (Generally Accepted Accounting Principles) operating and net profit margins took a significant hit in fiscal year 2025 due to one-time charges.

For the fiscal year ended September 30, 2025, Edgewell Personal Care Company reported $2,223.5 million in net sales. That's a 1.3% decline from the prior year, so the top-line pressure is real. The profitability picture is best seen by separating operational performance from non-recurring events.

Gross, Operating, and Net Margins

The company's ability to manage its cost of goods sold (COGS) is reflected in its Gross Profit margin. Their full-year gross profit was $924.9 million, yielding a gross margin of 41.6%. This is a respectable margin for a CPG company, especially considering the industry is grappling with unprecedented margin compression due to inflation and volatile input costs.

Here's the quick math on the key margins for fiscal 2025:

• Gross Profit Margin: 41.6%
• Operating Profit Margin (GAAP): 4.3% (on $96.6 million in operating income)
• Net Profit Margin (GAAP): 1.14% (on $25.4 million in net earnings)

The gap between the Gross Margin and the GAAP Operating Margin is the story here. The GAAP Operating Margin of 4.3% is low because it includes a significant $51.1 million non-cash goodwill impairment charge related to the Feminine Care business, which the company is divesting. This is a classic clean-up of the balance sheet.

Operational Efficiency and Trend Analysis

If you look at the adjusted figures, which strip out these one-off items, you get a clearer view of core operational efficiency. The adjusted operating margin was 9.9% for the year, still a drop of about 200 basis points from the prior year, but a much healthier number than the GAAP figure. This decline was driven by lower gross margin and higher brand investment.

The gross margin of 41.6% was down 80 basis points year-over-year. What this estimate hides is the battle against inflation. Edgewell Personal Care Company achieved approximately 270 basis points in productivity savings in fiscal 2025, but this was largely offset by core inflation, tariffs, and increased promotional spending. They're running hard just to stay in place on costs. The strategic move to divest the Feminine Care business for $340 million is a clear action to simplify the portfolio and focus on higher-growth, higher-margin categories like Skin Care and Grooming.

The industry comparison is stark: CPG companies are struggling with margin compression in 2025. While a 41.6% gross margin is competitive, the low 1.14% GAAP net margin shows the cost of transformation and market headwinds. The focus is defintely on the adjusted numbers and future productivity gains, which are forecast to be around 310 basis points in fiscal 2026. You can get a sense of their long-term focus by reviewing the Mission Statement, Vision, & Core Values of Edgewell Personal Care Company (EPC).

Here is a summary of the key profitability ratios, illustrating the GAAP versus Adjusted reality:

Next step: Focus your analysis on how the planned debt reduction from the $340 million divestiture will impact future interest expense and net margin. Finance: Model the adjusted net margin with lower interest expense for FY2026.

Debt vs. Equity Structure

You want to know how Edgewell Personal Care Company (EPC) is funding its operations, and that means looking right at the balance sheet's capital structure. The direct takeaway for the 2025 fiscal year is this: Edgewell Personal Care Company is more leveraged than its peers, relying heavily on debt financing, and that's putting pressure on its credit outlook.

As of the fiscal year end in September 2025, Edgewell Personal Care Company carried a total gross debt of approximately $1.413 billion. This debt load is primarily long-term, sitting at around $1.3833 billion, with only about $29.5 million classified as short-term obligations. This structure tells me management is focused on long-term capital stability, but still, the sheer volume of debt is the key metric here.

Here's the quick math on how that debt stacks up against ownership capital (equity):

• Total Debt: $1.413 billion
• Total Shareholder Equity: $1.55 billion
• Debt-to-Equity Ratio: 91.0% (or 0.91)

A Debt-to-Equity (D/E) ratio of 91.0% means the company uses 91 cents of debt for every dollar of shareholder equity. To be fair, leverage is common in the Consumer Staples sector, but Edgewell Personal Care Company's ratio is defintely elevated when you compare it to the industry average for Personal Care Products, which typically sits much lower at around 66.13% (or 0.66). This higher D/E ratio signals a greater reliance on debt financing, which increases financial risk if cash flow tightens.

The company's financing strategy in 2025 shows a clear balance-or perhaps a tension-between debt and equity. On one hand, the company increased its Revolving Credit Facility borrowings by $106.0 million [cite: 7 from 1st search] to help fund $90.2 million in share repurchases [cite: 7 from 1st search], effectively using debt to boost shareholder returns. On the other, they are deleveraging through strategic divestiture, agreeing to sell the Feminine Care business for $340 million. That sale is a major action to pay down debt and improve the D/E ratio moving forward.

This high leverage has not gone unnoticed by the rating agencies. In June 2025, S&P Global Ratings affirmed Edgewell Personal Care Company's issuer credit rating at 'BB', but they revised the outlook to Negative. This is a non-investment grade rating, and the negative outlook reflects S&P's expectation that the adjusted leverage will remain high at 4.2x for fiscal 2025, above the 4x downgrade trigger. The company-reported net debt leverage of 3.9x at year-end [cite: 9 from 1st search] is a bit better, but still shows a tight margin for error. The risk is real: if profitability doesn't improve, a rating downgrade is possible within the next 12 months.

Exploring Edgewell Personal Care Company (EPC) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if Edgewell Personal Care Company (EPC) has the immediate cash to cover its bills, and the 2025 fiscal year data gives us a clear but mixed picture. The company maintains a decent current ratio, but its quick ratio signals a reliance on inventory for short-term obligations, and operating cash flow saw a significant drop. That's a red flag for self-funding capacity.

Current and Quick Ratios: A Closer Look

Edgewell Personal Care Company's liquidity position, or its ability to meet near-term obligations, is best viewed through its current and quick ratios. For fiscal year 2025, the current ratio stands at 1.77, meaning the company has $1.77 in current assets (cash, receivables, inventory) for every $1.00 in current liabilities (short-term debt, payables). This is generally a comfortable level.

However, the quick ratio (or acid-test ratio), which strips out less-liquid inventory, is only 0.91. A quick ratio below 1.0 is a caution signal. It means that without selling inventory, Edgewell Personal Care Company cannot cover all its current liabilities. This reliance on moving product-especially given the challenges in their Wet Shave and Sun Care segments-is something investors defintely need to track.

• Current Ratio: 1.77 (Comfortable).
• Quick Ratio: 0.91 (Signals inventory reliance).
• Inventory is a critical component of their short-term funding.

Working Capital and Cash Flow Trends

The trend in working capital (current assets minus current liabilities) is the most concerning element. Net cash provided by operating activities (OCF) for fiscal 2025 plummeted to $118.4 million, a sharp decline from the $231.0 million reported in the prior year. This 49% plunge in operating cash flow is largely attributed to changes in net working capital and lower earnings, signaling a deterioration in the company's working capital efficiency.

Here's the quick math: less cash generated from core operations means the business is less able to self-fund its growth, pay down debt, or continue its capital return program without external help. The divergence between the current ratio (1.77) and the quick ratio (0.91) points directly to this working capital strain, where the inventory component is masking a tighter cash position.

Liquidity Strengths and Concerns

The primary liquidity strength is the strategic divestiture of the Feminine Care business for $340 million. This cash infusion, expected to close soon, will substantially bolster the cash balance, which stood at $225.7 million at the end of the fourth quarter of fiscal 2025. This is a one-time event, but it provides a critical buffer.

The main concern, however, is the operational cash flow. The company increased its total borrowings by 8.5% to $1.42 billion in fiscal 2025, partially utilizing its revolving credit facility to fund shareholder returns of $119.5 million. Using debt to fund share buybacks and dividends while operating cash flow is shrinking is a high-leverage strategy that requires a quick turnaround in core business performance. The company's ability to execute on its planned working capital improvements is critical for 2026. For a deeper dive into the company's strategy, you can read more here: Breaking Down Edgewell Personal Care Company (EPC) Financial Health: Key Insights for Investors

Valuation Analysis

You're looking at Edgewell Personal Care Company (EPC) right now and wondering if the market has it right. Is it a bargain or a value trap? The quick takeaway is that EPC looks undervalued based on traditional metrics like Price-to-Book and EV/EBITDA, but the recent stock price volatility and mixed analyst sentiment suggest real near-term risks.

The core of the matter is the valuation multiples. For fiscal year 2025, which ended in September, EPC's adjusted earnings per share (EPS) came in at $2.52. When you look at the stock's closing price around $17.02 as of late November 2025, the valuation picture is definitely compelling, but also a bit messy. Here's the quick math on the key ratios:

A Price-to-Book (P/B) ratio of just 0.54x is what screams 'undervalued' to a financial analyst. This means you are paying 54 cents for every dollar of the company's net assets. Plus, the Enterprise Value-to-EBITDA (EV/EBITDA) multiple, which is a better measure of a company's total value relative to its operating cash flow, sits at a low 6.67x. This is a defintely a compelling number, but it's crucial to remember that low multiples often reflect market skepticism about future growth or profitability. You have to ask why it's so cheap.

Stock Price Trend and Dividend Stability

The stock price trend over the last 12 months maps directly to the market's skepticism. EPC has been on a painful slide, with the 52-week high hitting $38.45 in December 2024, only to plummet to a 52-week low of $16.63 recently in late 2025. That's a massive drop, driven partly by the Q4 2025 adjusted EPS of $0.68 missing the analyst forecast of $0.82. The market hates an earnings miss, even if the full-year adjusted EPS of $2.52 looks decent.

Still, shareholders get a dividend. Edgewell Personal Care Company's forward annual dividend payout is $0.60 per share, which translates to a solid forward dividend yield of 3.53% at the current price. The dividend payout ratio (the percentage of earnings paid out as dividends) is a bit of a mixed bag, which is where precision matters:

• Trailing Payout Ratio (based on GAAP EPS): 115.38%. This is high and unsustainable, as it means they paid out more than their GAAP earnings.
• Forward Payout Ratio (based on next year's estimates): 17.75%. This is very healthy and suggests the dividend is safe if the company hits its 2026 earnings targets.

The low forward payout ratio suggests management is confident in their turnaround plan, which includes the strategic divestiture of the Feminine Care business for $340 million. This move should simplify the business and focus resources. You can read more about their corporate direction here: Mission Statement, Vision, & Core Values of Edgewell Personal Care Company (EPC).

Analyst Consensus and Actionable Insight

The analyst consensus on Edgewell Personal Care Company is currently a 'Hold.' This isn't a ringing endorsement, but it's not a panic button either. The average price target among analysts is $23.17, which represents a significant upside of over 36% from the current price. This gap between the current price and the target is the classic sign of a stock with a lot of risk priced in.

The action here is to treat EPC as a deep value play, not a growth stock. The market is waiting for proof that the strategic changes-like the Feminine Care divestiture-will translate into consistent, higher earnings. If you are comfortable with the risk, the low P/B and EV/EBITDA multiples make it a compelling candidate for a small position. What this estimate hides is the execution risk; if the new strategy fails to deliver, the stock could languish.

Next Step: Review the Q1 2026 guidance for the Wet Shave and Sun & Skin Care segments to confirm the post-divestiture growth trajectory.

Risk Factors

You're looking at Edgewell Personal Care Company (EPC) and seeing a strategic pivot-divesting Feminine Care, focusing on core brands-but every transformation has near-term risks that can erode value. The biggest immediate threats are external, namely inflation and tariffs, which are hitting gross margin hard, plus persistent weakness in the critical North American market.

The company's full fiscal year 2025 results show the pressure points clearly. Net Sales decreased by 1.3% on both a reported and organic basis, and the GAAP diluted net loss per share for Q4 2025 was ($0.66). That's a serious drop from the prior year's income. You need to watch these three areas closely: macroeconomics, operational execution, and domestic market performance.

• External Macro Headwinds: Ongoing inflation, foreign exchange volatility, and geopolitical tensions are a constant drag. The gross impact of tariffs alone is projected to be $37 million in fiscal 2026.
• Operational and Supply Chain Risk: The company's restructuring of manufacturing facilities, including consolidating operations in Mexico, is a major undertaking. This is expected to incur pre-tax charges of approximately $49 million in fiscal 2026. Complex activities like this can easily lead to delays, inventory fluctuations, and loss of institutional knowledge.
• North American Underperformance: North America organic net sales decreased about 4% in the fourth quarter of fiscal 2025, driven by volume declines and increased promotional spending. This domestic struggle is overshadowing strong international growth, like the mid-single-digit growth forecast for Europe in fiscal 2026.

Here's the quick math on the margin pressure: Adjusted gross margin rate decreased by 330 basis points in Q4 2025, which management attributed to core inflation, unfavorable mix, and higher trade promotions. Even with productivity initiatives delivering over 270 basis points in gross savings for the full fiscal year 2025, it wasn't enough to offset the headwinds.

Mitigation and Financial Vulnerabilities

To be fair, Edgewell Personal Care Company is taking clear action. The planned divestiture of the Feminine Care business is a strategic move to sharpen focus on the more profitable Shave, Sun, and Skin Care segments. Plus, they are actively mitigating the tariff impact, expecting a net impact of $25 million in fiscal 2026 after direct mitigation efforts. That's defintely a positive sign of management discipline.

Still, a significant financial risk remains: customer concentration. The company relies heavily on a few large retailers, with Walmart accounting for 17.4% of net sales. If a major customer reduces purchases or demands tougher terms, it creates a disproportionate financial shock. Also, the company's substantial level of indebtedness is a factor; for instance, they have $750 million of senior notes due in 2028 and $500 million due in 2029. High debt limits operational flexibility when facing unexpected market downturns.

The table below summarizes the core financial impacts of these risks in fiscal 2025:

The company is in a transitional period, and while the strategic direction is sound, the execution risks and external pressures are very real. For a deeper dive into the company's valuation, check out Breaking Down Edgewell Personal Care Company (EPC) Financial Health: Key Insights for Investors.

Next Step: Start modeling how a 5% tariff increase or a 2% volume drop in North America would impact their projected fiscal 2026 Adjusted EPS range of $2.15 to $2.55.

Growth Opportunities

You've seen the headlines about Edgewell Personal Care Company (EPC)'s mixed performance in fiscal year 2025, but the real story for investors is the deliberate, strategic pivot now underway. The company is shedding non-core assets to sharpen its focus on its most profitable categories-Shave, Sun and Skin Care, and Grooming-which is a classic move to drive margin recovery and sustainable growth.

The full fiscal year 2025 net sales came in at $2.223 billion, a slight decline, but the adjusted earnings per share (EPS) was a respectable $2.52, showing their ability to manage profitability even with external pressures like currency volatility and tariffs. Here's the quick math: the company delivered over 270 basis points in gross productivity savings in FY2025, which is what kept the bottom line from collapsing.

Strategic Focus and Product Innovation

The biggest near-term action is the planned divestiture of the Feminine Care business to Essity for $340 million. This isn't just a cash grab; it's a strategic move to be more agile and invest in areas where Edgewell has a clear competitive edge, like Wet Shave and Sun Care. The capital from this sale is intended to strengthen the balance sheet and fund long-term growth initiatives.

Product innovation is defintely a core driver. The company is pushing consumer-led launches, such as expanding the Billie brand into Australia and introducing Bulldog into premium skin care across Europe in fiscal 2025. Plus, they are executing a complete mineral restage in the U.S. Sun Care segment, which is crucial for capturing the clean-label trend.

• Focus on core categories: Shave, Sun/Skin Care, Grooming.
• Divest Feminine Care for $340M to Essity.
• Fund new automation for Wet Shave manufacturing.
• Expand successful brands like Billie and Bulldog internationally.

Market Expansion and Competitive Advantages

The international business is the current bright spot, proving that geographic diversification is a key competitive advantage. International organic net sales grew a strong 6.9% in the fourth quarter of fiscal 2025, driven by volume and price gains across all segments. Europe saw its third straight year of growth, and Greater China delivered double-digit growth.

Edgewell holds the number two global market share position in wet shaving and a leading position in the U.S. Sun Care category with brands like Banana Boat and Hawaiian Tropic. This established market presence, coupled with a renewed focus on its acquired grooming brands like Bulldog, Jack Black, and Cremo, gives them a defensible position against competitors.

Looking ahead, the company is implementing a bold transformation in the U.S. to return the business to profitable, sustained top-line growth, which is where the North American market has struggled. This is a multi-year project, but the focus is right.

Future Projections and Investor Outlook

The immediate future, fiscal year 2026, is expected to be a transitional period. Management's outlook for organic net sales growth is a cautious range of down 1% to up 2%, reflecting the headwinds from the Feminine Care divestiture and ongoing market volatility.

However, the adjusted EPS outlook for fiscal 2026 is projected between $2.15 and $2.55, with an Adjusted EBITDA outlook between $290 million and $310 million. This outlook anticipates continued margin pressure in the first quarter, but a stronger second half driven by productivity and sales growth.

Here is a summary of the near-term financial outlook:

What this estimate hides is the potential for a smoother-than-expected US transformation or a stronger sun care season, which could push results toward the high end of the EPS range. For a deeper dive into the company's financial health, you can read the full post: Breaking Down Edgewell Personal Care Company (EPC) Financial Health: Key Insights for Investors.

Your next step is to monitor the Q1 2026 results for signs of margin recovery and the impact of the US transformation plan.