Edgewell Personal Care ( ), the maker of personal care products like Schick shaving razors and Banana Boat sunscreen, reported mixed second quarter results, missing on revenue estimates attributed to consumer spending pullbacks Edgewell Personal Care CFO and president of Europe and Latin America Dan Sullivan sits down with on Wealth! to discuss the earnings results and the performance of its various consumer product segments. "What's important to note for our business is we operate in largely non-discretionary categories. We are, for the most part, in the middle of the price tier.
So we're certainly not at the at the top of the price tier. And we're non-discretionary right in use for the most part," Sullivan explains. "And so I think there's a little bit of protection around our business just by the nature of the categories in which we compete.
And even a category like suncare, where you might think about some consumer sentiment, could bleed into behavior." Sullivan has been promoted to the COO position effective immediately while overseeing his chief financial officer duties until December 1. For more expert insight and the latest market action, click to watch this full episode of Wealth! Video Transcript Shares of edgewell moving lower after the company reported mixed results.
The personal care brand missing on revenue as shoppers continue to tighten their wallets for a deeper dive into the results. I'm joined by Dan Sullivan, who is the Edgewell personal care CFO. And I might mention as well going to be the COO very soon.
Dan, thanks so much for taking the time and and joining us post earnings here. Just wanna get your general read on the consumer as it pertains to edgewell. And, of course, the the the beauty and self care products that this brand is known for as well.
Yeah, great to be with you. Look, we we had a good quarter. I we're a bit disappointed in in the initial stock reaction, although it's it's coming back.
We posted 1% organic growth in the quarter, which was in line with what we had expected, underpinned by really strong market performance internationally, 6% growth, equally driven by volume and price. So really strong results. I think that the key financially is another quarter of margin inflexion 100 and 75 basis points a year over your margin gains that fueled 20% plus EPS growth, and we took our our profit outlook.
E BT A&E PS up for the full year. So look, it's a tough environment for sure. We're we're certainly hearing that from other guests of yours as well.
We're pleased with the performance, though, and I think it's, uh, it's in the of of how well the team is performing and and really good in market execution. When you think about the kind of forward guidance that you're giving the street right now and and and really kind of trying to best anticipate how the consumer may continue to moderate, there's there's weakness at the low end. And, of course, now even more pressure on the middle tier.
How are you kind of factoring that into your guidance here for for Wall Street? Yeah, it's a It's a great question. Look, there's no doubt the consumer is under increasing pressure. I think all of the data points to that outcome for sure.
Uh, I think what's important to note for our business is we operate in largely non discretionary categories. We are, for the most part, in the middle of the price tier, so we're certainly not at the at the top of the price tier, and we're non discretionary right in in use for the most part. And so I think there's a a little bit of protection around our business just by the nature of the categories in which we compete and even a category like sun care where you might think about some, uh, consumer sentiment could bleed into behaviour.
We're super excited. We're We're simply not seeing that the the consumer continues to be unwilling to sacrifice on experiential Spend travel, resort vacation fun in the sun. We just had a category in the US sun season that was up 2% in its biggest quarter of the season, and we gained share in that quarter.
So is it getting harder for sure? Is the consumer under increasing pressure? For sure, we like our positioning as as far as the categories go, and we continue to focus on that which we can control, right, take costs out of the business, be super smart, where we invest where we can get high return and execute really well, you know, one of the thing that's gonna be a major carry over from your current position as CFO into your new position at the end of the year as chief operating officer is really the strengthening that you and the company are talking about in this operating model. Walk us through some of the changes that we should expect to see and and and how the consumer will kind of see the difference there coming from the company. Yeah, I think the magic word here is accelerate.
We want to take all that we are doing and do it faster. Uh, that is a reflection of our ambition in North America, where we've actually seen really good growth in our right to win portfolio, sun care and grooming. And now we are looking to accelerate performance in shave.
Uh, and in fem care, I think back to the operations point of your question. We have been incredibly good at taking cost out of the business. Uh, we've averaged somewhere around 250 basis points a year in pure cost.
Take out that is a good proxy for how we thought about it going forward. And the answer today is we want to do that even faster. We want to create more dry powder that we can invest behind this portfolio of brands.
So I think what you can, what you will see from us is a bigger focus on accelerating speed, a bigger focus on execution. We have to simplify the supply chain. We have to perform better.
We have to execute better. And we have to be a better service provider to our retail partners. There there was a push through.
And and even though you did see higher volumes in in some categories here, um, and I'm looking at the wet shave, uh, in particular because I need to shave so much just to look presentable on air here, um, higher volumes, but also higher price. How much more price do you think you need to push through at this juncture? Yeah. Look, I think the pricing environment is a tricky one.
we can all agree the days of, you know, commodity based, inflation based broad brush pricing. Those days are gone, but equally I think, you know, brands that can win on shelf brands that have resonant demand with consumers. Brands that can bring innovation to the shelf.
They they have a right to take price. They have purchasing power. We we see that in various spots within our portfolio.
But our application of it from here on out will continue to be much more surgical, much more where we are strong, uh, on shelf and in market and much less what we've seen in the previous couple of years around just broad based inflationary pricing, I guess. Selfishly Dan are Are are my Are my razors gonna cost more at at Christmas time than, uh than right now during the summer, we don't do seasonal pricing, so you would not see a spike at the Christmas time. I'd also encourage you shop our kits.
We do a phenomenal job around shave and grooming kits for the holidays. Might be something you'd be interested in. Yes, indeed.
Dan, thanks so much. Always appreciate you taking the time here with us diving into some of the earnings results and congratulations as well on the new role yet to come later on this year as well as the new appointment, uh, of Francesca Dan Sullivan, who is the edgewell personal care CFO. Thanks, Dan.
Thank you. Certainly.
