Edgewell Personal Care Company (NYSE: EPC) reported Q1 EPS of $0.55, $0.26 better than the analyst estimate of $0.29. Revenue for the quarter came in at $454 million versus the consensus estimate of $445.94 million.

Executive Summary

• Net sales were $454.0 million in the first quarter of fiscal 2020, a decrease of 0.7% when compared to the prior year period. Organic net sales were consistent with the prior year period (Organic basis excludes the sales impact from the sale of the Infant and Pet Care business and the translational benefit from currency.)
• GAAP Diluted Earnings Per Share ("EPS") were $0.41 for the first quarter as compared to a loss of $0.01 in the prior year period. Adjusted EPS were $0.55 for the first quarter, compared to $0.37 in the prior year period.
• The Company completed the sale of its Infant and Pet Care business to Le Holding Angelcare Inc. for $122.5 million in cash.
• In a separate press release issued today, the Company announced that following the U.S. Federal Trade Commission's ("FTC") lawsuit seeking to block the proposed transaction, Edgewell terminated its merger agreement with Harry's, Inc. Harry's has informed the Company that it intends to pursue litigation. The Company believes that such litigation has no merit.
• Edgewell is updating its previous financial outlook for fiscal 2020 solely to reflect the impact of the Infant and Pet Care divestiture and a change to the Company's expected effective tax rate assumptions.

"Our first quarter results and other recent accomplishments represent a solid start to the fiscal year, as we continued to advance our strategic and financial objectives, reshape our portfolio, invest in our brands and new growth opportunities, and realize cost savings," said Rod Little, Edgewell's President and Chief Executive Officer. "Our core brands performed well, underscoring our confidence in the Company\'s near- and long-term prospects for value creation. We are pleased with the growth we achieved across our geographies, particularly in North America. With a good start to the year, our core business outlook is unchanged, with stable top-line and gross margin performance expected, and increased commercial investments in the business. We are confident that we are taking the right steps to drive value creation by building on our core brands and continuing to innovate, simplify the business and successfully execute growth initiatives."

GUIDANCE:

Edgewell Personal Care Company sees FY2020 EPS of $2.95-$3.15, versus the consensus of $2.95.

Full Fiscal Year 2020 Financial Outlook

• The Company has updated its financial outlook for fiscal 2020 solely to reflect the impact of the Infant and Pet Care divestiture and an adjustment to the Company\'s estimated effective tax rate for the full year. The financial outlook provided today does not include potential one-time costs associated with the Harry\'s transaction.
• The Company now expects total net sales to be in the range of down 5% to down 4% (previous down 2% to down 1%) compared to the prior year. Organic net sales growth, which excludes a 440 basis point impact from the Infant and Pet Care divestiture, is expected to be in the range of down 1% to flat compared to the prior year, unchanged from the previous outlook.
• The outlook for GAAP EPS is now estimated to be in the range of $2.40 to $2.60 (previous $2.45 to $2.65) and 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.
• The outlook for Adjusted EPS is now in the range of $2.95 to $3.15 (previous $3.10 to $3.30), reflecting an estimated $0.15 reduction for the impact of the Infant and Pet Care divestiture, including associated stranded costs, partly offset by a lower estimated full year adjusted effective tax rate.
• The Company now expects adjusted EBITDA to be in the range of $350 to $360 million (previous $370 to $380 million), reflecting the impact of the Infant and Pet Care divestiture and associated stranded costs.
• For fiscal 2020, Project Fuel is expected to generate approximately $70 million in incremental gross savings. Project Fuel related restructuring charges are expected to be approximately $35 million. Total Company capital expenditures, including Project Fuel are expected to be approximately 3.0% to 3.5% of net sales.
• The adjusted effective tax rate for fiscal 2020 is estimated to be in the range of 20.0% to 22.0%. (previous 22.5% to 24.5%)
• The Company anticipates that fiscal 2020 free cash flow will be above 100% of GAAP net earnings.

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