Edgewell Personal Care Company (EPC) Tops Q4 EPS by 3c, Revenues Beat; Offers FY21 EPS Guidance

Edgewell Personal Care Company (NYSE: EPC) reported Q4 EPS of $0.59, $0.03 better than the analyst estimate of $0.56. Revenue for the quarter came in at $488.8 million versus the consensus estimate of $466.41 million.

Executive Summary

• Net sales were $488.8 million in the fourth quarter of fiscal 2020, a decrease of 7.4% when compared to the prior year quarter, and $1,949.7 million for the full year, a decrease of 8.9% compared to the prior year. Organic net sales were down 3.5% for the quarter and 4.4% for the full year. (Organic basis excludes the impact from the sale of the Infant and Pet Care business, the acquisition of Cremo Holding Company, LLC, and the translational impact from currency.)
• GAAP Diluted Earnings Per Share ("EPS") were $0.38 for the fourth quarter and $1.24 for the full year fiscal 2020. Adjusted EPS were $0.59 for the fourth quarter and $2.73 for the full year.
• Gross cost savings associated with the Company's Project Fuel program were $17 million in the fourth quarter and $74 million for the full fiscal year, and net cash from operating activities was $233 million.
• The Company ended the fiscal fourth quarter with $365 million in cash on hand, access to an undrawn $425 million credit facility and a net debt leverage ratio of 2.6 times.

"We are pleased to close out fiscal 2020 with a fourth quarter that demonstrated a clear return to more stable underlying top line and bottom line performance, underpinned by healthy gross margin results. North American Wet Shave and Sun Care, and continued expansion of our Wet Ones brand, were all areas of strength. Our strong focus on execution and disciplined approach to commercial investment and brand activation, all helped fuel this performance," said Rod Little, Edgewell's President and Chief Executive Officer.

Mr. Little continued, "Amid the challenges presented by this global pandemic, I could not be prouder of the entire Edgewell team across the world and all that they accomplished this fiscal year. The efforts of this highly dedicated team allowed us to remain operational and meet the needs of our customers as we remained committed to the safety and well-being of all of our team members. Over the course of this challenging year, we successfully stabilized our top line, returned to gross margin accretion, over-delivered on our cost savings program and generated $190 million in free cash flow, while successfully closing on the Cremo acquisition. As we enter fiscal 2021, we are confident in our positioning and excited to execute on the next chapter of growth for Edgewell. We look forward to sharing our plans for sustainable value creation in more detail at our investor meeting on November 20th."

GUIDANCE:

Edgewell Personal Care Company sees FY2021 EPS of $2.62-$2.82, versus the consensus of $2.70.

The Company is providing the following outlook assumptions for fiscal 2021:

• Reported net sales to increase mid-single digits
  • Includes: 160 basis-point net benefit from the Cremo acquisition and the Infant and Pet Care divestiture and a 90 basis-point benefit from currency translation
• Organic sales to increase low-single digits
• Adjusted operating profit margin expected to be consistent with fiscal 2020
  • Project Fuel one-time costs of $25 to $30 million
  • Project Fuel Gross Savings of $50 to $60 million
• GAAP EPS in the range of $2.18 to $2.38
  • Includes: Project Fuel restructuring charges, IT enablement costs, acquisition and integration costs, the gain on sale of the Infant and Pet Care business and Sun Care Monograph costs
• Adjusted EPS in the range of $2.62 to $2.82
• Adjusted EBITDA in the range of $345 to $360 million
• Adjusted effective tax rate in the range of 22.5% to 23.5%
• Capital expenditures approximately 3.0% of net sales
• Free cash flow expected to be approximately 100% of non-GAAP net earnings

For earnings history and earnings-related data on Edgewell Personal Care Company (EPC) click here.

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