EPC - Earnings call transcript Q1 2020 | Edgewell Personal Care Company

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to the Edgewell Personal Care Q1 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this call is being recorded.

I would now like to turn the conference over to Chris Gough, Vice President of Investor Relations. Please go ahead.

Chris Gough

you. Thank and Edgewell's joining first everyone, as this you discuss we quarter thank morning, us for morning Good XXXX earnings.

morning our to one be is call being and Chief this and will Chief quarter results and then kick me outlook, are over discuss our This call Little, full-year to With XXXX to hand we President off Executive the Officer; Officer. Dan Financial Q&A. and our for we'll Sullivan, Rod website, replay via will Rod available Dan and will www.edgewell.com. then transition recorded and

costs, the about This future During our call, earnings, product are expectations we forward-looking future respect which related views currency include future and to to statements working value, future may capital advertising performance. to of current commodity plans statements, our statements and to and savings promotional return capital changes spending, more. such make launches, plans sales, and events. with shareholders for metrics, category reflect our Any for might costs restructurings, fluctuations,

year as on are in Form report described those September quarterly various to and risks Risk statements are for subject XX-Q. XXXX, amended reports assumptions including These the XX-K the Form in XX, our uncertainties, caption on may Factors annual be under and on ended our based

revise by our or cause except as statements. update We circumstances, results risks from assume law. reflect of to by obligation new actual or statements our to to implied forward-looking or These those do may be these required materially expressed events different any forward-looking not any

investors the are shown provide issued website. business. with of non-GAAP these measures the of Management the available directly are in believes press non-GAAP non-GAAP certain today, Relations Principles. non-GAAP financial at measures earlier financial A measures not valuable GAAP reconciliation underlying refer These release trends with information our the of is this section During will Accounting call, comparable prepared accordance in Accepted we Investor our measures to most Generally to on which our measures.

With that, I'd like to turn Rod. the over to call

Rod Little

our to morning, morning, good comments And going this call on everyone. I'm Chris. my Thanks, In two core topics. focus

on, including I Edgewell will morning we Then are more Harry's release our broadly will agreement. have I address the that talk the terminated First, journey outlook. operational that Dan see merger about the announcing continue and business, we transaction, this positive then the results to as our the in well strategic we for quarter performance through you the go-forward as full-year our financial update priorities. take will

transaction seek for we disagree position. stakeholders, week the merits we're of disappointed the including block a of proposed Harry's, the together brought stated consummation of to decision benefit complementary I capabilities ago, with continue obviously and the believe that to all consumers. of As the would've to We our their by FTC's merger the with

required the terminated the detailed business ongoing continuing given our said, have on we Directors with the That factors, after and with of potential and legal in uncertainty with a resources, outcome these merger resulting investment the time and would about the Board entail, to agreement. FTC our deliberation battle distraction

pursue press be the this matter on Harry's us litigation commenting in to merit believe has stated further. no We As won't release, such I informed their has was any and intent litigation. of that

of improving moving ahead. we're forward with confidence performance such, in underpinning As the underlying path our business, our our

adding creation. retailers, strategically growth resonate and consumers strengths increased engagement brands support our and on core in We in our IP, ability of to in our build that capabilities value technology, to will and innovation, enhancing drive with

unchanged. our strategic building objectives a products committed company. and are there path the And to the next-generation Harry's business consumer while will include remain We not brands,

our transformation, where are we on share provide insight me business, and now on a let our ongoing So, headed. some perspective

over made foundation compelling brands we augmented we on our and we today, the past and and our capabilities, share global are global that quarters where strong meaningful blade-making our a have infrastructure, formulation the fiscal best-in-class with three maintain Starting have positions by categories. built diverse progress across

a than retail markets. reach countries extensive more operating XX Edgewell is across XX with in with scale company global

about revenue As our diversified XX%. such, revenue profile, contributing we with have North a our America of XX% representing business international global and

Skin across diversity our segments Sun Wet Feminine while This XX% of business, more is known seen Shave also Care revenue. we segments. are the contribute well And for than our and and Care

US It's important it to revenue. considerable our while only represents X% category, men's branded remember Shave the spent time Wet global that we discussing of

clear is to which business our and to ability competitive innovation stack the bring Underpinning technology an our categories property, us repeatedly advantages provide in compete. which intellectual and we

blades durable category, that. we growth do a that for and to have we high-quality the producing requirement Shave know ability the in sustainable Consistently is Wet

Additionally, three R&D a have care capability. sun different formulation leading facilities we and

have have categories; The core sun our our to actions reshape we taken grooming, refocus our skin and in portfolio position care, and care. enhanced feminine and

business investing Tropic, Playtex, our care Jack further are completed, and Hawaiian and Schick, divestiture stable narrowing growth and now our With of brands, successful in in some the Black. new very Sword, exciting Bulldog of we focus including our Boat, Banana infant support and including of Wilkinson brands

that encouraged know, category Wet today. We care high-quality position notably by consumers Shave about consistency where of recent the most has in you us and in North believe But encountered and products over America. that As our I think well we shave headwinds significant years, quality am stand respect.

Black growth double-digit you products. for and are us leading preps in men's performing in positions Bolt-on broader both growth when played respective grooming there expanding exceptionally important role consider in and an delivering opportunities and maintaining and our in their category believe We Bulldog soft markets. shave Jack the are well, have presence acquisitions grooming; men's

sun healthy Grooming brands and we here consumers compelling in have positions, the with Fem the meaningful is market both our fem equity globe growth especially Outside in opportunities category, strong maintain of across and a the US. care. and care category,

organic brands, to the category, exciting existing our and participation of this to Innovation play in strong contemplate role additions important expanding leveraging will portfolio in continue acquired also portfolio. we an increasingly our while

filling We've we're across care In significant made define fem for stages and redefine sales, catalyst of for our helping this path the strategic that marketing, the optimal business. model our the steps to important early efforts finance will and leadership business, roles key future. forward an for be our in commercial operating in

seen business We've performance delivery initial time. top profit which top stemming of work the line although some more line by, in significant declines, this know stable take and we will encouraged repositioning I'm remains for

we important catalyst $XXX productivity our driving reshaping in in over Project This executed million delivering well, evolution, both greater and in ways in And savings Fuel we that gross is continued an in remains rooting all out organization economics. mindset for today. itself, have do.

These in with and growth and innovation have build resources us savings provided brands to our capabilities. invest and

our and to on opportunities and also commercial growth across offerings, retail Specifically, worked most beginning we simplifying, compelling capabilities we've across refining to reshape and entire our our focused towards channels, eye investments key enhance an brands portfolio our the with our company.

urgency of success in Work brings remains here revamped our team and industry team we leadership XX are We've Directors. senior record and and with a categories. to months last over focus. and My added and this experience of progressing the track our operating our Board management significant members also new

XX with three results down underpinned And to Organic are pleased last results improved and growth last basis quarters, with our approximately we points business. period. in the the seeing to the across including the line three fiscal by all geographies. trends Over prior-year I quarters results these QX, compared stabilize top this am continue segments were all

of both a healthy, trade investment, margin year and brands. promotional and and including Fuel R&D, stabilizing muted spend brand are as $XX we promotion on maintaining XXXX, leading advertising supporting moderate we rates spend. increasing and leaning Gross collective are to by After execute our investments, in commitment Project million our in

we is $XXX QX. having inclusive gross million execution, and maturing in have $XX savings realized record to clear Project track of a million of date, Fuel for

a remains and Free fueling cash business deleveraging. our model, systemic of consistent flow strength core generation

Over the accretive providing M&A powder by have our leverage necessary of dry to the we activity. full last support one debt, year, turn reduced

progress, for more shortly. rate earnings. execution stable, free Fuel, of flat gross over year reflects Project further this our in to outlook will of negative, margin cash expectation organic net GAAP net of the Our discuss slightly sales XXX% detail continued Dan flow with and

steadying quarters' achievement. should step we our we and confuse indicate fiscal with right But required business results first in a three of is Foundational progress are path. not on the

strengthen to working business ensure value for further creation with our shareholders. our urgency are and We sustainable

and This thinking is a in time actions. when we must disciplined in be bold our our

Our as follows. priorities are

our consumers First, and build we love. must to increase ability innovate brands

area not center impact this of consumer-centric, the occasion-based have provided our efforts at recent the to needs level be approach. in thinking needed of Our and

capabilities our developing necessary the recently strategic this added meaningfully pipeline existing to continue robust organization talent team of roadmap where to strengthen needed and R&D have forward resources we'll a innovation in seek Enhancing our area. augment to for the priority. is our and opportunities of infusion with We our going a business clear in

Second, will in or This robust beneficial on and unique brands CEO exclusivities strong, build to become most task important the with relationships, the our strategic whether through that we our shelf. important upon shelf, was becoming categories. partnerships at I retailers certain maintain that has exploring win initiated on innovation we first stronger increasingly mutually

We our with retail are key committed relationships strategic our to further solidifying partners.

the drive growth our maintaining to of our Fuel to operations, our in investment in point strategy brough that opportunities. initiatives ways on to continued our will Project we further strengthen continue other and Third, us in through competitiveness drive this to and focus simplify efforts working efficiency enabling

manner, balance returning continue will an profile balanced also on strategy to and a structure disciplined that in allocation a sheet, enables business utilizing capital cash capital investing in a critical to our Fourth, Dan this moment. free healthy and is strong in our shareholders. balanced we Ensuring flow while elaborate maintain efficient value will our

talent for drivers our employees sustainable fact, And key of work matters and, finally, in are profile and success. environment

top North in will commercial with We priority. our America leadership invest commercial in biggest critical roles, talent

time COO Head As dual-heading for not been as some sustainable. and knew America we of you has Hutchison North know, quite both was the and this Colin

new to And sales this so, complement business, geography. to leader the act marketing focus important a in our lead forward expertise our business American and on required leader quickly with of for a who dynamic has North will we right identify seasoned,

drives culture world-class talent Additionally, we engagement among are attracts committed teammates. our to and creating a that and retains

where people our on that values focused is be built love inclusivity to a can of strengthening company are sustainability, which and work. so We we on culture

over important the I Dan, this the want most to takeaway I Before call. from call turn emphasize to

and than been with some quite Our focus in company become urgency and executing unchanged. time. a business is We're today healthier remains has our CPG mission to it world-class

know need where lie. the to of areas continue understand business progress pleased strengths address are We and to our the with our we that making. We we we're

and well-positioned we opportunities the forward succeed believe are redirecting that to we to we lie In ahead. towards focus look our short,

take you results and our XXXX. to Dan And ask I'd through first now for fiscal like to updated outlook quarter

Daniel Sullivan

Good you, everyone. morning, Thank Rod.

Rod solid and mentions, we Fuel and very with more on to pleased execution and Good how focus spend and on effective balance the year continued core trade becoming this entering productive on Project brand efficient business. QX progress As results we fundamentals. shelf, and we're of the the mature how with started organization now further the a our execution run reflect

line margins from run load-in were QX to mix Our business impact by benefiting were We headwinds year rate last the flat the the for execution that, adjusting to an flat, Japan underpinned in Fuel. importantly, underlying reformulation of sun results QX North improve, of Gross the estimate care VAT and America. in for Project continued and of product our and continued cycling basis, of market year a and, also on top improved strong, in growth with ago. organic return the also sales sales net

full-year to QX was therefore a net results sales margin year-over-year. our organic and stable of objectives, deliver gross good demonstration

utilizing our to of on the focus closed This was successfully portfolio, us core in also an care our divestiture, and We important new opportunities. the balance to enabling pet growth further strengthen on the our step infant sheet. proceeds and brands transformation

not This significant over to as several we profit a we past the win fit experienced for clear a business erosion years. was strategic by lacked the right evidenced simply us where

that stranded associated positions better to portfolio potentially impacts and can share, in of from elsewhere long be Although our earnings divestiture freeing while the negatively this the run returns. streamlining foregone deployed a stronger profit at the costs capital segment per up higher company be us

detail full-year the Outside this full-year the for tax outlook We've updated and lower more and reflect shortly. to rate. is outlook unchanged I'll business changes, the those full-year our the of in discuss divestiture

So, for of performance a to let the year. and then move discussion in with me quarter the our start operational our full outlook

line of growth an As growth mentioned, in points, sequential America slightly fiscal representing since QX were net improvement of net The basis first sales in ahead the top XX basis and further quarter of year-over-year flat quarterly was XXXX. North supported sales our organic the on expectations. organic by

also declined although Care this was Skin the organic an And seen Shave and X% segments. Sun Growth Wet to in quarter, compared Fem improvement in as and the Care represented recent net sales trends.

points organic declined XXXX VAT the last growth year the of basis XX the in sales of International negative quarter, the net mid-single ahead load-in and cycling QX impact reflecting digit increase.

growth expanded our strong we e-commerce as by gifting growth holiday capabilities further presence, quarter in execution business. the our accelerated and and in driven

at Wet Looking quarter growth systems organic with shave and Shave men's by in in and X% women's declined the partly systems disposables, just sales offset preps. segment, sales organic declines in over by

also posted most Bulldog We recent growth continue product and offerings, disposables. the label Women's Skintimate in of to two see quarter. private strong razors solid performance our in

continued the our America remain pressure, largely XX-week line trends. course XXXX, that anticipate weeks over resets we providing somewhat progress, with to competitive XX in challenged business in retailers. will North in Shave North perspective, results losses geographic a key mixed the planogram last share face the our Wet spring Despite over America with with From of

innovation Rod discussed focused brands, in capabilities earlier. to improving our We, invest on continuing incrementally therefore, which and our

part and strong this, X% for reformulation run increased by be to year's sales Care estimate Skin Adjusting about with and we rate over cycling wipes. segment underlying up last grooming in in of organic Sun sales aided XX%, performance the for headwinds. the

seasonal the and in with continued Bulldog channel secondary mass distribution leading share US and improved for Wet in over added the to Our digit and quarter, displays categories. business face position velocity by in the Ones business, the Canada XX% realize improved additional grooming demand. grew placement, care both growth mid-single in beard driven in our the gains, market achieved

drug A&P off-season executed retail the we media deploy we're heading sun successfully cautiously will US, across and increases business, summer were although largely both across and our traditional our here digital and increased care In where into in the optimistic season price mass avenues. spend

Internationally, on run a Sun and grew Skin X.X% basis. rate

XX points, consumption. Amazon distribution, liners. across sales positive Tampons Carefree basis largely with spend o.b., Fem our Care increased shipments of Sport stronger trade and result stable Volumes organic increased and were and the

We continued to see in declines Stayfree Pads.

felt performance resets. time, once path as Walmart Changes at this we we be while distribution to year seen and planogram will improve forward sustainable implemented are Fem know they Care two by the be this will with medium our some efforts As reason initial in from of half Rod business mentioned, pleased to the success, for the this reposition business challenging progress over business but our evidenced take we of the will also that remain losses the confident longer-term. that will

X.X%, XX-week decreased razors in Briefly points declining disposables quarter, of Nielsen, looking at the X%. systems category measured of the women's increase category wet shave, the declines US the dynamics as and by and blades XXX in basis X.X% with last men's in data,

that estimate about driven growth online X.X%, razors and by continued unmeasured, offline offline and and e-commerce we unmeasured. both US increased Including blades

share basis by latest basis blades data, Nielsen, razors down our measured versus XX-week XX-week On perspective, down line and about our in a global XXX and was a as in at XX we share ago we're XX.X% a points. year market points share with the in in results. From estimate a basis, US,

points Gross year-over-year margin XX.X%. basis XX to increased

margin Fem timing due our and business. in the gross rates reformulation, performance. helped mostly mitigate trade tailwinds efficient and market with costs other mix, care impact of American expectations associated was favorable trade more margin North price of gains, costs structural spend, Care final a investments benefited to Gross wet in sourcing product combination stages Excluding spend, and investment from of sun the the flat, warehouse improved exceeding our lower and shave which

and the a A&P net decrease quarter NPD as as largely expense XX.X% expected Sense period. this sales cycled was of to Intuition was in X.X% compared Hydro of of sales f.a.b. The the ago. we in net activation year A&P prior-year

incrementally step women's quarters investing seasonal be shave the conjunction up in anticipate in with seen will second year-over-year, care wet as campaign well investment support highly where our third year of $XX brand. Bulldog spending behind and largely in season million the our Our A&P US we and as our in new about this planned and sun in

million expense in of XX.X% sales amortization net was of sales including net the as $XX SG&A period. XX.X% to or compared prior-year

Excluding relates item one-time last the to impact SG&A XX of two-thirds charges, adjustment. other restructuring-related which to a percent QX of in Harry's-related of related year as net increased charges, points, costs and basis vacation a accrual a favorable sales

savings bps, basis by QX results Fuel. a by Project equity higher compensation, like-for-like driven offset from roughly XX on partly increased

XX increased and a prior-year innovation capabilities we of in expense quarter robust basis our points net part pipeline. resources increase the of as to as percent support over added efforts R&D a of more sales as planned reach

diluted of were the $X.XX driven in last favorable first tax equally $X.XX profit share the earnings and operating with prior-year GAAP $X.XX compared per to increase share compared share net share loss in and per quarter interest share were per improved year per costs. $X.XX earnings period, and to adjusted of a by the per

Net was million year. cash cash used the by the million quarter use to operating of compared $XX.X activities a prior of as during $XX.X for

quarter reminder, of in business, of lowest year. a sun fiscal due company's the is the care, to first quarter As operating the typically primarily seasonality the cash the flow

reduction The strong XX representing profile. this times, last is cash net a months the debt company's flow of leverage and current turn full business' ratio evidence X.X over about further free

Fuel. to like turn Project I'd to Now,

growth partially provide offset key the in continue delivering operations incremental to line investments and R&D savings increased this helped million reinvestments year-over-year for brands and These our and behind drivers across to markets. catalyst in inflationary was teams Our headwinds gross $XX which in quarter, with the in of execute the program, savings core expectation.

flow We've new only a for XXXX. our updated effective Turning our for divestiture of full-year care and the profitability impact fiscal our outlook assumption outlook adjusted reflect to cash on and the infant to free pet rate. tax and

impact is to lower and be EPS infant pet, to less offset now tax and stranded headwind the and expected half of partial The segment from approximately with $X.XX from with in a infant by pet guidance, gross is the than from EPS the reported effective sale driven XXXX costs. $X.XX results rate. sale a the half prior a corporate of to expected result coming

to plans structurally we at comment developing We offset. early are to be able will on costs too and, these stranded time, to already address it's what this

For the I of discussed the business, are unchanged quarter. the is remainder our three outlook pillars as last

For top the – flat – to line stabilization first anticipate down we organic sales pillar slightly results.

is element second savings, supported gross margin fuel further moderated selective by stabilization, and spend. price actions trade in part The

finally, outlook two in initiatives meaningful three increased particularly And in overall as A&P and This spend, mentioned contemplate reinvestment to continues choiceful and brand quarters reinvestment. key growth I earlier.

net to the declines our rates sales point from for of the range growth. elements care pet a XXXX. be Now specific not X% and Currency does of full-year estimate to divestiture. X%. at This impact infant to We down impact outlook reflects basis spot in the XXX

is the on charges, outlook and range and GAAP $X.XX for pet restructuring in the of The and Project gain EPS charges. the and enablement other to one-time infant Fuel IT sale $X.XX includes

to outlook EPS Our $X.XX $X.XX. is of range adjusted in the

in of reduction $XXX and care Adjusted the divestiture. to due approximate the to EBITDA pet is infant million $XXX million to estimated reflecting million, an range $XX be

incremental to about in generate is expected million savings. Fuel $XX gross Project

million. remainder expected of Project that other restructuring anticipated approximately input Despite offset the Fuel with are inflation, be savings will wage invested the rising back tariff XX% gross meaningful used approximately categories, costs, to to commodity business. and still Fuel be expect into easing headwinds the charges we continued $XX related many in

X.X% to earnings, in for cash to The CapEx in year estimated GAAP adjusted estimated be is fiscal tax of outlook sales. excess flow the of be our to rate is the XX%. of of free net fiscal XXXX expected be to now range And effective X% XX% for to now XXX% with

reflected be will from free $XX and from other flow cash income, taxes the cash be from a total activities operating in while investing activities. benefit be approximately as infant result the well as expected divestiture for lower cash million care from as sheet in transaction reduction balance will the cash the and adjustments the will transaction While pet transaction year, will reflected net the proceeds in in

our allocation capital address and to like on our capital I'd forward. finally, strategy And structure comment going

process attractive forward and going history, flow of confident obtaining and addressing our recent ability We our the profile while the Harry's required have our already addressing highly proactively the necessary in maturities. strong leveraging to support financing transaction, credit place financing, put begun cash the success for to structure capital near-term are in business in the we

provide coupled terms times this that considerable generation, our with In fact strong we X.X free the end flow strategy, of being below capital us with by our of allocation the anticipate optionality. fiscal cash levered year,

the taken Since $XXX a of $XXX buybacks stock returning Bulldog. successful then, acquisitions of balance Jack off to Black debt million we sheet, of while the million have also over form the over over in ton in shareholders investing and and

growth Our objective long-term the sustainable this both and organic appropriately of to in acquired. be continue will investing business, primary

desired With to we the and X leverage net times, opportunistically ratio capital to longer-term of will between return also the X.X potential shareholder. our consider debt

I'll questions. turn the the open And and up that, for back over operator call to with

Operator

Jason with English Instructions]. And first Sachs. comes from Yes, question you. Goldman the thank [Operator

Jason English

of folks. couple for questions A Hey. Good morning, me.

obviously, how exit First, of a incur light you move the there to in Harry's, I on the the out give the of an expect status had, wake rebuild? of and merger of in seen we've to good not talent can of the turnover whether whether a organization, with and pressure to state current the you costs much we a see paralysis, or the with and in on go forward how of some state has organization I with should us of turmoil, degree to that, imagine FTC's suspect anticipation not been this, decision union

Rod Little

the Hey. question. morning, for resilient. organization you Jason. has Thank Good The been very

the I The from trend that off the team of our have in we results pulled organization to we people perspective. no the think improvement of executing meaningful full our had you no work on any kept continued had We plan, a focus We've time and work. the working have on talent. do building of some on loss the see key turnover, in that business, integration transaction, planning to change

moving here we the when lot the of fact, a organization forward around work, how we and changes come people we with or we transaction. and in results was the show to how operate, without organization in focus. In accountability making with office I think they that, And energized a and value, what expect do We're the what that. has been resilient

Jason English

that to I related mentioned and That's company. you Maybe maybe the to release, remember And language think in missed a committed what that mean the implications organization, strategic direction to it, are the encouraging by past. you're but to next-generation forward? the the energy and don't used as the you CPG of does hear. in press What that Edgewell in going I you we being that about building

Rod Little

forward-looking. language is generation next The

architecting And wants to and being what store, reach to on or do and to the with that's the that try where messages are as want evening their the that experience on consumers offer organization skillset that part buy that consumer want in win digital, of a legacy forward-looking a modern with to wants have shop. late certainly drive you point are of world to and it where the our where it products brick-and-mortar it's relevant, of that, an up way consumer have online, how that, consumer the products online, that product XX it, are in great in interesting, a consumer all products, target they experience, a to way efficient from they over retail model, the then are resonance he wherever current home, able the very want ultimately all eyeballs marketing and its' to through up the drive buy do the based it's an consumer takes years. that consumer delivered how increasingly when of to shops, I do is, they landscape than said, XX, different to the to simply she the all that built And in Just last grew architect in the go purchase. a

And by so, that's that. what we mean

and And, there acquisition we path longer going in to what were being that Harry's on DTC, plug-and-play some example, transparent came cases have Albeit, get again, that opportunity we we'll would as honest, expertise path along, Harry's than take and us had go remain before the there. with forward. with to on we for it's the

Jason English

Got it. a lot, guys. thanks

Chris Gough

you, please. Thank question next Operator, Jason.

Operator

Yes. with And that comes from Bernstein. Ali Dibadj

Ali Dibadj

have at many CPG Hey, from companies if kind back a deal, you investors Harry's One is questions. just guys. I this step a CPG look continuum. few along or of spectrum

On the like something growth, a company. hand, a so you're real, one high cosmetics it's or luxury

part a to almost but rewarded might in Harry's. given to felt sense. to something at flow you other spectrum like of with of the and spectrum, shareholders take a end it's growth shot think that a shot like the free from spectrum return On moving to thought what quite a good be one guys certainly that of risky It of tobacco end good the a good leverage, happened decided cash shot, your like driver, a faster margin you story a driver,

guys? not Harry's, and in prepared doing of change sit. here about how kind about pieces language this to investors should Would I've almost want two think you where your you of remarks conflicting heard

way you just you growthy cash to the in do one where of more lean middle, to I other, we're a think cash to that the flow? is on spectrum? return get sense So, of more or want but always the answer easy or tend where free are shareholders,

Rod Little

for questions. Thanks the morning, Good Yeah. Ali.

categories growth-oriented one, in a healthier has we core flow, flat in reliable company. aspire we to much, we flow in today, to strong it's absolute generator, cash so the beyond Wet say, ago. where place sit of that think do consistent growth, than Wet to of would in where free Shave, and X%, of I we terms our we I play, have certainly where two of more X.X% very although be so do we were characteristics think up And years Shave we're profile, the stabilized cash now just delivery

from digits, the grooming. double at going rates, and men's that, high-single is growth growing. even beyond But women's come to in digits is growth When really areas. you skin care Sun some look care in

actually and categories So, in we're healthier. growing that getting are

so, look that ability retailers cash generating innovations we top innovate to of the with we partner grow and then our And on and consumer bring flow can and ideas and as better strong absolutely wants, free stability. at

that there call do and reliable, still match we assets of player. to think the probably and that more going that, plan the I together a uniquely capabilities would aspire frankly, forward than there's it be consumer different just with have if we another versus with peer the on not at will and aggressive be think combination so so, And be product done even just predictable to to on it, middle, just line. that see combination of out being, that, little a certainly could much what a top set, was that and the consistent, pack Harry's that top let's I and less I opportunity very in

Ali Dibadj

versus of context, about kind of M&A one. should how in helpful Part setting cash now think we forward terms returning the to guardrails that In going shareholders? very of role up. That's

about think not a Rod, growthy, to more Harry's? to want Part given a two with the that it would imagined of move you back level little advertising the that marketplace, we leapfrog attempt how sounds although you should like, is, sustainable bit have into that put

Rod Little

which Jack with case very, growth a Black, remain with going, keep and to performing businesses bolt-on well. put over us we're and thinking track one, time advertising company a this capability businesses, I'll were to it only the acquisitions. successful record to bring the beginning It Bulldog cases. Founder-led bolt-on Most having recently, Dan cover M&A-wise the in incremental for but was accelerate Frankly, to are how we I'll It's a the support via acquisitions. both some acquisitions. starts it those not M&A able of about and for business. throw flourished, continued very from Yeah. together the M&A the series with Ali, founders with a thrived us, on absolutely

we're for but part transformational market the going I absolutely opportunity out M&A forward. of bolt-on a of This us think things. here, plan big for unique is the was

I clean companies into As very and mentioned, do of organization. unique And we leverage have to think we go our have capability a Dan that. sheet also integrating balance a

say The move we'll more move is – a forward. forward this actually, M&A final two disciplined financially way in we very is, do as points with disciplined I'll thing as important. we Being

opportunities beyond The shave. not shave, about about in care this for look it's is piece us. all got and sun particularly category not map. opportunities we it's We've wet an interesting the when wet second globally the at is got We've US of

Daniel Sullivan

on And forward, Yeah. then, the year A&P going said a lean-in is we've us. model for XXXX

points spend sale we a rate more XXX of basis our expect We than to about ago. year did

behind invest I Tropics, in are coming we Hawaiian where to be that QX and money be seeing and behind market we it Boat campaigns the in it to because incremental expect campaigns QX will that in our shelf. is invest largely to we Banana willingness we'll activated expect seeing in. think seasonal going And sun both Bulldog QX. We and and we're QX results care shave we're believe have And what to on the now we're great new put behind heavily to seeing women

see that in place behind, our that we've as in to is we that and So, the plans step QX on we'll invest QX. thinking got I now and A&P see do really think – we you'll up campaigns largely like

Ali Dibadj

much, Okay. guys. Thanks very

Chris Gough

Ali. Thank you, Operator, please. question next

Operator

from that with comes Nik And Modi RBC. you. thank Yeah,

Nik Modi

I everyone. had two morning, Good Yeah. questions.

doing. Rod, should of which shelf? update you on of on some completed transferable guys be understand kind demand touched the Can brand that question. First, been that analysis off to give you the So, us are in some where coming process? was the you SKU Have you've work you streamlining first that

And then, the bigger picture. second is question just

you and need do As you. years? space them, What the retailers to to they're you've do you? few they of saying Edgewell of think speaking What just what over in from What to do shelf lost back order curious are I'm the asking want do? to you gain to been some re-engaging last kind they

Rod Little

And Nik. good you, Thank morning.

brand – made On started disposables. progress point, we're path meaningful streamlining complete the is down think where not yet the in I we've where we've –

a business versus a all the and the we disposable the we our on disposables consolidated men's in support brands building just reduction, big seven out. under disposables now two brands It's know, simplification it's and across brands SKU around side, and under Skintimate brands both those six or the of lines brand. men's you focus around big what was putting in terms had our As we've of multiple entire consolidated And women's women's on brand. side Xtreme

progress. good And so, that we feel about

path as There's be forward. and think on systems. we're we behind that. see Again, on men's us you'll more support bigger make yet progress fewer, brands go And we to work women's can to to but do the I continue towards that put done

far I'd there. So, from complete but started, say we've

successful was got that's value in what were now is the growth products take we retailer what where category, want, the had consumers actually made if want simple. focus buy partners on and be demand Gillette and and propositions and at you to and what category. willing can the grew can retailers I landscape to want. They us look where consumer grow have innovations are ultimately doing today. And quite that the it's that and Harry's that want And the look higher they they in you insights than to them innovation, space think deliver of what to think the the to retailers with to terms help In in at they category I able consumer, leading if what get

look encouraged have. with we our pipeline we're have as coming, think innovation we road I what map very what at And and and we

about my where time corporate move the three we at leading more partnering as centric and we what on including and analytics, an And overall feel commitment, heading. way a forward to about thinking good across priority those. insights we data take our consumer to of strategy delivering that's certainly, we serious shelf, are all As in our with with retailers retailers, look with

grow simple the category. them And to what need want. help into pretty it's We they so, I think and bring value back

Nik Modi

Great. Thank you very much.

Chris Gough

Operator, question Nik. Thanks, next please.

Operator

you. Thank

SunTrust. Chappell Next Bill from comes with

William Chappell

Good morning. Thanks.

Rod little

Good morning, Bill.

William Chappell

I had questions. two

stable stable a – the it's fairly more more any That little it's you and marketing than of if US. new or maybe if just kind the product can to seems if didn't – products, know more I First, bit international be shave, about there's wet outlook? some much there's talk just introductions

Daniel Sullivan

is slightly Yeah, than competitive more in We We US, wet there recall, today XX stable the see pressures. shave stable good in saw where we a out category morning. It heightened particularly Europe. that. in Europe reinforce last outlook QX, you of more and results coming a might Europe challenging in saw weeks the the

when We also, very as presence you results the of and normalize impact in the for a Japan quarter know, in strong have we saw VAT QX. good

the we're So, stable right year-over-year better, like we we we've QX category. brands, incrementally yes, wet saw got executing spending feel more shave and, we're

Rod Little

and is innovation global place, a model. this And, build with not Historically, much at leadership stable, innovation the that resonates innovation better new more global of how innovation Bill, we this, local with have menu resonate we've build around our if in under we to only globally, I could model our brands a local is we gone to on the at consumers. with frankly local consumers. there a average capability category add where and but more And is and were tailored very regional, something more gotten architect our we've

the give you the more led do a led and execution that's brand. team. rebrand That consumer. by on helped global team Europe and regional the much that that, The of global re-launch but we of Sword activation a in regional In couple to work in I'll Germany, examples. a was interesting the local way started not Wilkinson the

Chinese being Schick is, would the X have happen market. those into the with It's travel that built for to In been China. that US in system consumer something then the the example local insights design for launching put razor Another Chinese a market we're past, markets. architected firms to and

And show so, on our in focus the up results. to insights local regional our tailoring starting and the and is market

William Chappell

And it. of then, is I followed year need into us care/skin you kind the that follow-up pricing reformulation, sun Got industry. anything can a assume the just was, within remind Last we the everyone keep care, with effect? And then, there the on quarter. funky pricing on mind? to that in just went

quarters next the like? two just looks So, kind of what the flow

Daniel Sullivan

the first take I'll question.

So, had execution the drug. both has much a took our into bold retailers. we mass strong par pricing We the standpoint pricing. To yet, with steps in extremely won't put on knowledge, no of the specifics frontline around and from we get us in followed to one but sell-in too and

pricing based remarks, only equity, quite care also in costs optimistic but we've and right said the as we has brand on think think comfortable sun I significant the on not We we're As now seen over the about got my that the season. category based time. cautiously entire our

that. feel we So, about good

was what you the repeat can second Sorry, – the question?

William Chappell

sales how over Just quarters, the next two flow?

Rod Little

Yeah.

sell-in matching allocation. we due through last That's being a We simplest with more On think that is, the of essentially started year don't as this like-for-like year. to weren't timing We year, as there the the sales on reformulation. just of headwind couple this we're the about on the last it on year. first allocation to we way consumptions flow, went have year, the go quarters we

William Chappell

you. Thank it. Got

Chris Gough

Thank question next Operator, you, please. Bill.

Operator

Strycula UBS. comes Thank Steve you. And that with from

Steven Strycula

morning. Good Hi.

call, men's question earlier downplaying you're the my US is, Rod, shave in So, business. heard I the

in as of you multinational German cetera. most the few I'm category laundry A next think your they're So, talk wet out about what focused is should curious, on? combinations like company investors lot on where top of terms focused about et years, will country whether think shave, US larger the or

care label, So, that anything would shave, US look out, Japan as of would to point or be sun what you matter most skin US investors kind platforms whether care, it's are you big helpful. the private three

can on the cleanup cash then, would question be, breakup fee? comment And you

Rod Little

be the Sure. Canada US And question, the then Geographically, and international I'll no take from and growing breakup particular perspective. emphasis to cash them a care around sun on first fee. Asia. broadly on in reverse There in was a with is going category priority order.

Steven Strycula

scale these specifically is you about do in-house into change the a And outside lot you of really of outside of look have US? scale the think these how you or as of Japan, Thank regions there you. deliver kind any on out platforms to over

Rod Little

of is infrastructure US infrastructure particularly in got good, Our good the We've Europe. outside reasonably there.

in get which our of strength there, of area the to in a the and, distribution partners the in out, you just of team have I Asia terms we out of outside on ground, you think Japan, point the work scale, we as we we as with. terms is around market us some We're talent for real good of scale in that level already and of markets have share building that of have some Asia. other don't process

our However, building we would it's accelerate where one some over of about the and time. think the via areas, the as we focus, put some forward lever M&A in to there's move you progress if opportunity M&A

of So, I think essentially about it mix Asia. a organic and will think be we M&A as

Chris Gough

Thank you, next Steve. Operator, question please.

Operator

Bank. Yes. with And that Deutsche from Faiza Alwy comes

Faiza Alwy

morning. Hi. Yes. Good

One few So, was is you a could more Harry's litigation comments two just, questions. us around you referenced. give I that the if wondering

that or Sort that just of litigation what of, saying you sort they of what's the premise Like, of are that? is faith out bad operated about? like

the is second forward quarter costs, we be gross my cetera, et thinking and just tariffs, on give go deleveraging, should margin. of input around mix, around those metrics then, question color a if basis? how Maybe And you volume us about some impact the could in

Rod Little

Faiza. morning, the Dan one litigation throw and on gross I'll it margin. first Good take to for

again, saying in from has merit. believe view, the would I'll we do litigation. we that into absolutely On stated be coming as any litigation brought that the pursue that they've no this sent counsel knowledge, their letter towards not has lawsuit. And they knowledge at that filed that don't it a that. of the do call. our intend litigation point, filed to lawsuit as first us release, Harry's We me to our a to press clarify, have But Harry's us know is leave we

Daniel Sullivan

in quarter and eased the anticipated. intensity a quite combination question, of, we had fuel to the margin margin terms gross what program the stronger well in anticipated. remarks, the was of And out terms product the quarter mixed as call, was prepared I the and really bit helped both we pressure. than in also in performed executing from margin would a profile. we in market, which There what inflationary mentioned my well We certainly In then, I Promotional tailwinds. of mitigate performance help slightly

stable So, There more keeps with some it's there, than margin it comfortable feeling we've and but seen. unique a a profile our good full-year gross tailwinds us much which is quarter. timing outlook are

Chris Gough

Thank you. Operator, you, Thank Faiza. question please. next

Operator

Bank from Yes. Olivia That of Tong with comes America.

Olivia Tong

Thanks. Great.

areas. Now focus two that the was could isn't happening, deal on I different hoping you

disproportionately. First, to Sun and in you of Skin further it Obviously, what going mix, expect terms sales look like Is growing have it been diversification? forward?

So, view your support just in of terms you're how sales going to mix.

And help you to then, you. some investments you on, think Harry's to build out digital kind you have make do that some of Thank you of go-to-market investments? to what capabilities specifically and expected the areas

Rod Little

Good morning, Olivia. Thanks questions. for the

lead that and to On the Dan But, care some would improve wise. have changes set skin, and the expect time the distribution that lead that on sales broad in sun but way. growth around grooming, continue continue mix, mentioned, over know would headwinds, so skin care planogram will the we've I trend as continue this to think Care, we certainly, terms, for and us. Fem to year, Care as we moving forward, area got for to Skin would we We expect, Sun look forward, grooming

continue US we where particularly those would is a the optimistic what Wet have that, some and From in US we at Shave we to area we would expect improve And distribution would trends really trends in see with thought shave. that those still about over we the all international in into be about to and what can expect business, changes to we're factored to Nielsen, business going in good That's time continue the think know, we've I headwinds. feel as do our you that. to improve look we an just

the you up quarter finished and The for other data, us thing measured in was but all Nielsen I'll tell in the you don't about just trends, XX%. see it e-commerce

in sales increasingly not are there is so, captured an large base And of Nielsen. that

would trends areas. our but look So, that when together, better, the you obviously put be those

the journey area, investments transaction. the have up what to around make we We'll incremental technology capability and to investment do And any happen, around in marketing to out in take made put investment the DTC that some I we technology like some think on terms direct-to-consumer, that resources know were the to e-commerce about marketing, then, for third-party We'll we some how some It'll do and some to in social We'll incremental required Today, build areas Harry's control a run to direct that of at in digital look leading add significant want that the management, of is thought infrastructure consumer, work. area and people there that we of in value that around us. we resources marketing that channel. in choices also we we design the and looks continue be in-house. to managed have. specifically digital channels that chain to managing bringing media use stack where and in of

number at won't So, looked reallocating where it, but that's Project all company. the on contemplated contemplated and in our we we investment go-forward within plan. put the I it's put how work investment Fuel a in

Olivia Tong

Great, thanks.

Chris Gough

Thank Olivia. you,

Operator

comes from question last the And you. with Jefferies. Kevin Thank Grundy

Kevin Grundy

me. morning, quick ones Good everyone. Thanks. from Two

about Dan leverage times X.X the First sheet and on less balance at maybe with capital news than for now the debt and one even that. Harry's or deployment

business? why level So, to right X this is X.X for the times

leverage stock news, more aggressively then, Thanks. course, thought then, any Harry's of the I the light down towards on your then, to a process, repurchases there And you're follow-up in ratio. with here? in more the was pivoting And share second, have towards Harry's. of And target moving

Daniel Sullivan

good Yeah, question.

and quite be this that guess, ratio very to where capital terms opportunistically us invest handle in to aggressive healthy my in We're to gives in and balance I'd X ammunition times. of this we to just that comfortable balance easily of acquisition, reinvest about allows be to business sheet put return remarks aggressive business a that a I growth a We of leverage healthy shareholders. think think us context. want So, can in X.X

now. was through Harry's We that don't also see you've attractive As even comfortable the higher right than up we us. to seen that if deal, potential something were leveraging

We're lens Rod's acquisitions of bolt-on acquisitions. complementary more of clear. at I looking think through are comments sort the

of those healthy think comfort. a place we all profile think about as is of X.X have to what's of X, So, again, elements And because about the balance forward. times sheet, we this for us going for right the business

Kevin Grundy

be is quick founders that enthusiasm Okay. to the around were going and that follow-up point the lot their now North at by And to there's of on. Rod. assumed in What the Harry's what Thank the positions to be management filled? just a what you. The need that that roles, are team What Thank key leadership was to filled bring. I'll big going need know you. for it be I if pass team? this are any, America

Rod Little

need lead. got Andy going there in results Colin come to America a was you, running get leadership been results, I'm been sales we has job going marketing. It's And role. running as team talk to Thank mentioned, to now over Yeah. and see the in double-headed We the have a We've the the in thing unsustainable. experienced better global American that in dynamic North for And done pick business. stabilized. and America we've from Kevin. Colin America across up proved, work year the a and we big said, North that and and place and North also is leader you can has the great do one that's were role. a in operations Jeff North the can really about now

we're need there portray but if be further get, leader. is in experienced. hand dynamic that with that's how that fill. the leader we'll other it's and then, I the look that And the to that what go as to so, that's you hand forward, changes, accordingly to at going we from need to that profile Starts changes make it. would of point work And position a And leader are made, with

Kevin Grundy

you. Thank

Chris Gough

Thank you, please. question Operator, Kevin. next

Operator

And with last question from comes Consumer Edge. Feeney Jonathan

Jonathan Feeney

for Thanks morning. very Good me. much. questions Two

you overall trying of disposables understanding been issue. any far Wet to can but margin When profitable, specifically it system flat commented comment and That a on it's on are major how my women's systems dimensionalize understand to to on Shave, I'm be you to growing margin between in men's shave mix. number by brands those mix a the men's what and would factors like the crafts, get systems within men's the been systems that's about looks is But most that again plan? think great. critical you Shave, Wet First, way or

bigger, that all execution that diversified. position ways Are a lot in without ways maybe of Harry's, that more anybody could your And that business over could that there second taking There partnership get cost? or question now of else strikes unique of of you're it those you improvement and manufacturer quite strategic of other they're who not and Shave you're you. capabilities me is they're looking your really are is, you deals there's have think and you in have to there lot Thank forward other that in, – to kinds with out manufacturing XX% capability Wet quantum one a whether not it's well. other advantage

Rod Little

systems Good profitable structure, questions. Wet within Jonathan. from an you, below are overall Thank Disposables morning. Yeah. private Shave, and that. most the thanks segments and Wet Shave. men's margin the And are for women's label On

you your an are So, the it economically, declining is right, is systems has when impact. outsized in point business,

correct. And so, that's

only manufacturing Two us but patent and technology, uniqueness technology have do not As the forward, we that of space, we quite have the it. it process, around of IP look unique. manufacturing know-how assets around is

we take so, still of don't we partly believe from fundamentally can have areas anything nice in the that We and do rates And look we we that forward, Wet successful we because and structural dynamics think, Shave, in. grooming in growth in conversation as grow assets be away our can have. sun, the win

investment look is allocate and idea. we manufacturing plants and filling can more at up and forward big move our we a as with so, where And volume develop, grow

as we to systems And with would across at or looking of men other as marginal so, look goes return we the I something ways we to be move can partnerships organically forward. disposable investments private And in had. make that a other those all women's that's label all where value dollar assets, those through we're things at think create way

Chris Gough

Thanks, Jon. question next please. Operator,

Operator

session. there time. And at Actually present else our is concludes the question-and-answer nothing that

to return for like I'd Little any to So, floor Rod closing the comments.

Rod Little

your for appreciate all the you continued investment. time Thank and interest We today.

Operator

concluded. you. attending presentation. you for today's Thank The now Thank conference has

disconnect You your may now lines.

Edgewell Personal Care (EPC) 10 Feb 202020 Q1 Earnings call transcript