EPC Q2 Deep Dive: Sun Care Weakness and Tariff Pressures Weigh on Results and Outlook

August 12, 2025 at 23:17 PM EDT

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Personal care company Edgewell Personal Care (NYSE: EPC) missed Wall Street’s revenue expectations in Q2 CY2025, with sales falling 3.2% year on year to $627.2 million. Its non-GAAP profit of $0.92 per share was 7.5% below analysts’ consensus estimates.

Is now the time to buy EPC? Find out in our full research report (it’s free).

Edgewell Personal Care (EPC) Q2 CY2025 Highlights:

Revenue: $627.2 million vs analyst estimates of $654.6 million (3.2% year-on-year decline, 4.2% miss)
Adjusted EPS: $0.92 vs analyst expectations of $0.99 (7.5% miss)
Adjusted EBITDA: $97.2 million vs analyst estimates of $102.4 million (15.5% margin, 5% miss)
Management lowered its full-year Adjusted EPS guidance to $2.65 at the midpoint, a 10.2% decrease
EBITDA guidance for the full year is $312 million at the midpoint, below analyst estimates of $335.5 million
Operating Margin: 8.6%, down from 12.8% in the same quarter last year
Organic Revenue fell 4.2% year on year vs analyst estimates of flat growth (428.9 basis point miss)
Market Capitalization: $1.05 billion

StockStory’s Take

Edgewell Personal Care faced a difficult Q2, with results that disappointed both the market and analysts. Management attributed the underperformance primarily to a very weak Sun Care season in North America and Latin America, driven by adverse weather conditions. CEO Rod Little described the quarter as "challenging," noting that Sun Care performance was a significant drag. Despite these setbacks, the company saw some positive developments, including improved market share in key brands like Hawaiian Tropic, Cremo, and Schick Hydro Silk, as well as steady international growth.

Looking forward, Edgewell Personal Care’s updated guidance reflects a cautious approach amid persistent external headwinds. Management highlighted that ongoing tariff and foreign exchange pressures, combined with the need to maintain elevated brand investments in the U.S., will continue to weigh on profitability. CEO Rod Little emphasized that these investments are necessary to "strengthen our business and better position our portfolio in the competitive U.S. market," even though they impact near-term margins. The leadership team also signaled additional transformation efforts are underway to drive long-term growth, particularly in North America.

Key Insights from Management’s Remarks

Management pointed to the weak Sun Care season and ongoing external cost pressures as key reasons for missing expectations, while also emphasizing incremental brand investments and international execution.

Sun Care seasonality impact: The quarter’s underperformance was largely due to a significantly weak Sun Care season in North America and parts of Latin America, with management citing adverse weather as a major factor. This led to lower consumption and reduced retailer orders, particularly affecting the Banana Boat brand.
International business resilience: Despite challenges in the U.S., the international segment delivered another quarter of growth, with consistent mid- to high-single-digit organic expansion over several years. Management highlighted strong share gains in Shave, Sun, and Grooming categories across key markets such as Greater China and Europe.
Brand campaigns and investment: Targeted brand campaigns for Cremo, Hawaiian Tropic, and Schick Hydro Silk in the U.S. showed promising results, with improved market share and positive consumer response. The company stepped up advertising and promotional spending, reallocating resources to more effective marketing channels.
Tariff and currency headwinds: The operating environment was further complicated by increased tariff costs and unfavorable foreign exchange movements. Management quantified the annualized tariff impact at 3-4% of cost of goods sold and described ongoing mitigation efforts such as inventory pre-buys and expanded sourcing.
U.S. commercial transformation: Edgewell completed a redesign of its U.S. commercial organization, bringing in a new leadership team and streamlining operations. This restructuring aims to improve commercial effectiveness and efficiency, with a focus on better engaging U.S. consumers and driving long-term growth.

Drivers of Future Performance

Edgewell’s outlook is shaped by continued investment in brand building, ongoing external cost challenges, and a renewed focus on international growth.

Elevated brand support: Management expects to maintain higher levels of advertising and promotional spend, particularly in the U.S., to support turnaround initiatives for key brands. These investments are viewed as critical for regaining share and improving the company’s competitive position, despite near-term margin pressure.
External cost headwinds: Persistent tariffs and currency volatility are expected to remain major headwinds for profitability. Management described these as transitory but significant, with mitigation efforts including supply chain optimization and pricing actions. The company also noted that further policy changes could add unpredictability to cost structures.
International growth focus: The company’s strategy relies on international markets, which now account for 40% of sales, to deliver consistent mid-single-digit organic growth. Management plans to continue investing in local innovation and brand activation to build on recent momentum in markets like Greater China, Oceania, and Europe.

Catalysts in Upcoming Quarters

Looking ahead, our analysts will focus on (1) the effectiveness of new U.S. brand campaigns and commercial leadership in driving market share gains, (2) the company’s ability to mitigate ongoing tariff and foreign exchange cost pressures through supply chain actions and pricing, and (3) sustained international sales momentum, particularly in Shave and Grooming. Progress on cash flow recovery and inventory normalization will also be important markers.

Edgewell Personal Care currently trades at $22.52, down from $25.01 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).

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