MW Edgewell to sell less Hawaiian Tropic, Banana Boat as consumers travel less

By Tomi Kilgore

Schick, Playtex and Wet Ones parent's stock tumbles toward five-year low after another quarterly earnings miss, lowered outlook

Shares of Edgewell Personal Care Co. sank toward a near five-year low Wednesday, after the parent of consumer brands including Wet Ones, Playtex and Hawaiian Tropic cut its full-year financial outlook as consumer sentiment sours due to concerns about the economy.

The company also reported fiscal second-quarter sales that missed expectations for a fifth straight quarter, amid weakness in all categories, especially in feminine care.

Edgewell now expects fiscal 2025 adjusted earnings per share in the range of $2.85 to $3.05, down from a previous range of $3.15 to $3.35. The outlook for sales growth was also cut to flat to 1%, from 1% to 3% previously.

"Underpinning our view for the second-half of our fiscal year is the belief that the uncertainty of the macro environment will increasingly be felt by the consumer, dampening confidence and ultimately negatively impacting spending behaviors," said Chief Executive Rod Little, according to an AlphaSense transcript of the company's postearnings call.

"We are already seeing this impact in travel and leisure spend, which we anticipate will impact our sun-care category, both in the U.S. and in key tourism markets internationally," Little added.

Edgewell's sun- and skin-care category includes the Banana Boat and Hawaiian Tropic sunscreen brands and Wet Ones wipes.

Little said the lowered profit outlook also includes estimated costs associated with recently announced tariffs as well as investments in its brands in North America, where sales underperformed international markets.

The company's stock (EPC) tumbled 11.3% in afternoon trading, which put it on track for its lowest close since Oct. 30, 2020.

Net sales for the quarter ending March 31 fell 3.1% from the same period a year ago to $580.7 million, below the average analyst estimate compiled by FactSet of $589.9 million.

Sales for the wet-shave business segment, which includes the Schick, Hydro Silk and Edge brands, were down 2.6% to $285.5 million, as weakness in North America offset growth internationally.

Sun- and skin-care sales slipped 2% to $231.1 million, while sales of feminine care, which includes the Playtex, Carefree, O.B. and Stayfree brands, dropped 9.1% to $64.1 million.

Chief Operating Officer Dan Sullivan talked further about the drop in consumer confidence, saying spending has slowed and there are signs that consumer "caution" is likely to increase in the near term.

"The topic of tariffs and, in many ways, the uncertainty of specific policy in this area has served as the catalyst for this challenging environment for consumers, while also causing added strain on sourcing and global supply-chain functions," Sullivan said.

He estimated a cost to the company for fiscal 2025, if current tariff rates hold, of $3 million to $4 million.

Meanwhile, net income for the latest quarter slumped 19.4% to $29 million. And adjusted EPS, which excludes nonrecurring items, fell to 87 cents from 88 cents, missing the FactSet consensus of 90 cents. That marked a second straight quarterly bottom-line miss, after a 10-quarter streak of beats.

Edgewell's stock has shed 20.7% in 2025, while the Consumer Staples Select Sector SPDR ETF XLP has gained 3.8% and the S&P 500 index SPX has lost 4.7%, at last check.

-Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 07, 2025 15:34 ET (19:34 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.