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Results of Edgewell Personal Care’s Earnings in Fiscal 3Q16

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Price movement

Edgewell Personal Care Company (EPC) has a market cap of $4.7 billion. It fell by 5.6% to close at $79.52 per share on August 2, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -4.6%, -8.3%, and 1.5%, respectively, on the same day.

EPC is trading 6.5% below its 20-day moving average, 4.0% below its 50-day moving average, and 0.50% below its 200-day moving average.

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Related ETF and peers

The SPDR S&P 400 Mid-Cap Value ETF (MDYV) invests 0.40% of its holdings in EPC. The ETF tracks a market-cap-weighted index of US stocks. The index uses three factors to select value stocks from the 400 stocks chosen by the S&P Committee. The YTD price movement of MDYV was 11.8% on August 2, 2016.

The market caps of Edgewell Personal Care’s competitors are as follows:

  • Estée Lauder (EL) — $34.2 billion
  • Clorox (CLX) — $16.9 billion
  • Church & Dwight Company (CHD) — $12.6 billion

Performance of Edgewell Personal Care in fiscal 3Q16

Edgewell Personal Care reported fiscal 3Q16 net sales of $645.1 million, a fall of 4.1% compared to net sales of $672.9 million in fiscal 3Q15. Sales of wet shave, sun and skin care, and feminine care segments fell by 1.3%, 1.3%, and 6.7%, respectively, in fiscal 3Q16 compared to sales in fiscal 3Q15. The company’s gross profit margin rose by 0.37% in fiscal 3Q16 compared to fiscal 3Q15.

Its net income and EPS (earnings per share) rose to $36.7 million and $0.61, respectively, in fiscal 3Q16 compared to -$72.5 million and -$1.17, respectively, in fiscal 3Q15. It reported adjusted EPS of $0.66 in fiscal 3Q16, a rise of 53.5% compared to fiscal 3Q15.

EPC’s cash and cash equivalents fell by 2.9%, and its inventories rose by 0.24% in fiscal 3Q16 compared to fiscal 4Q15. Its current ratio and debt-to-equity ratio fell to 1.7x and 1.6x, respectively, in fiscal 3Q16 compared to 2.5x and 1.7x, respectively, in fiscal 4Q15.

Projections

Edgewell Personal Care has made the following projections for fiscal 2016:

  • It expects net sales to fall by 4%.
  • It expects adjusted EBITDA in the range of $440 million–$450 million, which includes $10 million–$15 million of negative currency impact.
  • It expects net income in the range of $176 million–$185 million.
  • It expects adjusted EPS in the range of $3.45–$3.60.
  • It expects adjusted effective tax rate in the range of 24%–26%.
  • It expects restructuring-related costs in the range of $35 million–$40 million and $10 million–$15 million for fiscal 2016 and fiscal 2017, respectively.
  • It expects incremental restructuring savings of ~$15 million for fiscal 2016 and an additional $40 million–$50 million in combined savings in fiscal 2017 and fiscal 2018.

Next, we’ll discuss Ecolab.

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