Edgewell Personal Care (NYSE: EPC) reported fiscal Q3 2026 net sales of $570.1 million, up 1.7% year over year, while GAAP diluted EPS from continuing operations fell to $0.26 from $0.46. Organic net sales returned to growth at 1.1%, but margin pressure and higher spending reduced operating profit; adjusted EPS remained $0.72, supported by lower interest expense and higher other income. Released on August 5, 2026, the results cover the quarter ended June 30 and, unless noted, exclude the divested Feminine Care business.
Core Earnings Data
Reported sales benefited from a $3.6 million, or 0.6%, favorable currency impact. Excluding currency, organic growth was $6.1 million, or 1.1%, as improved North American volume more than offset lower international sales.
Profitability moved in the opposite direction. GAAP gross margin contracted 210 basis points, while adjusted gross margin declined a more limited 30 basis points; operating income and adjusted EBITDA also decreased.
| Metric | Fiscal Q3 2026 | Fiscal Q3 2025 | Year-over-year change |
|---|---|---|---|
| Net sales | $570.1 million | $560.4 million | +1.7% |
| Gross profit / margin | $242.5 million / 42.5% | $250.1 million / 44.6% | Approx. -3.0% / -210 bps |
| Adjusted gross margin | 44.5% | 44.8% | -30 bps |
| Operating income / margin | $25.0 million / 4.4% | $45.0 million / 8.0% | Approx. -44.4% / -360 bps |
| Adjusted operating income / margin | $53.0 million / 9.3% | $63.6 million / 11.3% | Approx. -16.7% / -200 bps |
| Net earnings from continuing operations | $12.3 million | $21.5 million | Approx. -42.8% |
| GAAP diluted EPS from continuing operations | $0.26 | $0.46 | Approx. -43.5% |
| Adjusted EPS | $0.72 | $0.72 | Flat |
| Adjusted EBITDA | $78.9 million | $81.2 million | Approx. -2.8% |
Adjusted figures are non-GAAP measures. The GAAP and adjusted earnings measures above are based on continuing operations.
Business and Segment Performance
North American organic sales increased 3.0%, driven by volume growth across Sun Care, Skin Care, and Grooming. Edgewell attributed the improvement to better execution, wider distribution, and continued momentum among several priority brands. International organic sales declined 1.4% because of disruption associated with the Middle East conflict and short-term supply-chain effects from Wet Shave manufacturing consolidation.
The two operating segments diverged sharply: Sun and Skin Care generated sales growth, while Wet Shave contracted and recorded a larger profit decline.
| Segment metric | Fiscal Q3 2026 | Fiscal Q3 2025 | Year-over-year change |
|---|---|---|---|
| Wet Shave net sales | $312.8 million | $317.0 million | -1.3%; organic -1.9% |
| Wet Shave segment profit | $34.9 million | $44.1 million | -20.9%; organic -24.7% |
| Sun and Skin Care net sales | $257.3 million | $243.4 million | +5.7%; organic +5.0% |
| Sun and Skin Care segment profit | $46.2 million | $46.0 million | +0.4%; organic -1.6% |
| Total segment profit | $81.1 million | $90.1 million | -10.0% |
Within Wet Shave, branded growth was more than offset by lower Private Label sales caused by temporary supply constraints in North America and certain international markets. Higher marketing and SG&A expenses contributed to the segment’s profit decline.
Sun and Skin Care benefited from mid-single-digit North American Sun Care growth and global strength in Grooming and Skin Care. Its organic segment profit nevertheless declined because higher marketing and SG&A expenses outweighed the benefit of higher gross profit.
Sales Growth Did Not Translate Into Operating Leverage
Adjusted gross margin fell only 30 basis points because approximately 200 basis points of productivity savings and 40 basis points of favorable currency effects offset most of the pressure. However, 160 basis points from core inflation and net tariffs, plus 110 basis points from unfavorable mix and promotional activity net of pricing, more than absorbed those benefits.
Operating expenses added further pressure. Advertising and sales promotion expense rose to $83.2 million, or 14.6% of sales, from $76.0 million, or 13.6%. SG&A increased to $108.3 million, or 19.0% of sales, from $100.7 million, or 18.0%. Adjusted SG&A reached 18.4% of sales, up from 17.6%, primarily due to higher incentive compensation and unfavorable currency effects.
The quarter also included $24.5 million of pretax restructuring and related costs, contributing to the larger decline in GAAP profitability. This helps explain why GAAP operating margin contracted much more than adjusted gross margin.
Despite weaker adjusted operating income, adjusted EPS remained unchanged. Interest expense associated with debt fell to $16.7 million from $19.4 million following lower revolving-credit borrowings after the Feminine Care divestiture. Adjusted other income increased to $9.7 million from $0.2 million, including $7.7 million of Transition Services Agreement income. Currency also contributed $0.04 to adjusted EPS.
Cash Flow and Balance Sheet
Net cash provided by operating activities was $47.1 million for the first nine months of fiscal 2026, compared with $44.3 million a year earlier, largely because of working-capital changes. This cash-flow figure is consolidated and includes both continuing and discontinued operations, so it is not directly comparable with the continuing-operations earnings measures.
Edgewell ended June with $397.1 million in cash, up from $225.7 million at September 30, 2025. The nine-month cash-flow statement included $338.9 million of proceeds from the sale of a business. Gross debt declined to $1.28 billion from $1.41 billion, while net debt fell to $882.1 million from $1.19 billion.
The company had another $418.8 million available under its U.S. revolving credit facility and reported an adjusted net debt leverage ratio of 3.7 times. It paid $7.0 million in dividends during the quarter, and the board declared another quarterly dividend of $0.15 per share.
Fiscal 2026 Guidance
Edgewell narrowed several full-year ranges rather than changing their central assumptions. The midpoints of adjusted EPS and adjusted EBITDA guidance remain $1.90 and $255 million, respectively, but the adjusted gross-margin and operating-margin outlooks became less favorable.
| Metric | Latest fiscal 2026 guidance | Previous guidance | Change |
|---|---|---|---|
| Reported net sales growth | +1.3% to +1.8%, including about 130 bps from currency | +0.8% to +3.8%, including about 180 bps from currency | Narrowed; currency benefit reduced |
| Organic net sales growth | Flat to +0.5% | -1.0% to +2.0% | Narrowed |
| GAAP EPS | $0.00 to $0.20 | $0.00 to $0.40 | Upper end reduced |
| Adjusted EPS | $1.80 to $2.00 | $1.70 to $2.10 | Narrowed; midpoint unchanged |
| Adjusted gross margin | Increase about 20 bps | Increase about 50 bps | Reduced by 30 bps |
| Adjusted operating margin | Decrease about 80 bps | Decrease about 60 bps | Decline widened by 20 bps |
| Adjusted EBITDA | $250 million to $260 million | $245 million to $265 million | Narrowed; midpoint unchanged |
| Other income, net | About $26 million | About $21 million | Increased by $5 million |
| Year-end adjusted net debt leverage | 3.3x to 3.4x | 3.3x to 3.5x | Upper end reduced |
| Pretax restructuring charges | About $92 million | About $90 million | Increased by $2 million |
The operating-margin outlook reflects approximately 70 basis points from higher advertising and promotional investment and 30 basis points from increased SG&A expense. Other full-year assumptions include about $70 million of debt-related interest expense, an adjusted effective tax rate of 22% to 23%, capital expenditures equal to 3.0% to 3.5% of sales, and adjusted free cash flow of $80 million to $110 million. Management continues to expect a stronger fourth quarter.
Recent Insider Transactions
The supplied insider dataset reports no purchases or sales during its latest six-month measurement period. Among the latest supplied two-year entries, only one included a clear transaction direction, price, and value; entries missing those fields have been omitted.
| Date | Insider | Role | Direction | Reported price | Reported value |
|---|---|---|---|---|---|
| November 20, 2025 | John Dunham M. | Officer | Sale | $17.21 per share | $5,731 |
Risks Investors Need to Watch
- Tariffs, inflation, and promotional pressure: These factors reduced adjusted gross margin despite substantial productivity savings, and the full-year gross-margin outlook was lowered.
- Wet Shave execution: Temporary supply constraints and manufacturing consolidation affected sales, while higher marketing and SG&A expenses contributed to a 20.9% decline in segment profit.
- International disruption: International organic sales fell 1.4%, partly because of the Middle East conflict and supply-chain effects. Continued disruption could limit consolidated organic growth.
- Higher spending and restructuring costs: Advertising, SG&A, and restructuring costs all increased. The company now expects about $92 million of full-year pretax restructuring charges and a larger adjusted operating-margin decline.
- Deleveraging execution: Adjusted net debt leverage was 3.7 times at quarter-end versus a year-end target of 3.3 to 3.4 times, keeping cash generation and debt reduction important through the remainder of the fiscal year.
Summary
Edgewell restored organic sales growth in fiscal Q3 2026, led by North America and Sun and Skin Care, but the improvement did not carry through to operating profit. Inflation, tariffs, promotional mix, higher marketing and SG&A spending, restructuring costs, and Wet Shave weakness compressed margins. Lower interest expense and Transition Services Agreement income helped keep adjusted EPS flat, while the narrowed full-year outlook leaves fourth-quarter execution, margin stabilization, Wet Shave supply normalization, and deleveraging as the main areas to monitor.
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