Good day, and welcome to the Edgewell Personal Care Company First Quarter Fiscal Year 2026 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Gough, Vice President, Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us this morning for Edgewell Personal Care Company's First Quarter Fiscal Year 2026 Earnings Call. With me this morning are Rod Little, our President and Chief Executive Officer, and Fran Weissman, our Chief Financial Officer. Rod will kick off the call and hand it over to Fran to discuss our first quarter 2026 results and full-year fiscal 2026 outlook. We will then transition to Q&A. This call is being recorded and will be available via replay on our website www.edgewell.com. Please refer to our website for supplemental information providing more details on the company's divestiture of its feminine care business, which closed on February 2, 2026. During this call, we may make statements about our expectations for future plans and performance. This might include future sales, earnings, advertising and promotional spending, product launches, brand investment, organizational and operational structures and models, cost mitigation and productivity efficiency efforts, savings and costs related to restructuring and repositioning actions, acquisitions, dispositions and integrations, impacts from tariffs and other recent developments, changes to our working capital metrics, currency fluctuations, commodity costs, inflation, category value, future plans for return of capital to shareholders, the disposition of our feminine care business, and more. Any such statements are forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995, which reflect our current views with respect to future events, plans, or prospects. These statements are based on assumptions and are subject to various risks and uncertainties, including those described under the caption Risk Factors in our annual report on Form 10-Ks for the year ended September 30, 2025, and as may be amended in our quarterly reports on Form 10-Q filed with the SEC. These risks may cause our actual results…

Thank you, Chris, and good morning, everyone. We appreciate you joining us for our first quarter fiscal 2026 earnings call. We delivered a solid start to the year with results modestly ahead of our expectations. Our performance in the quarter reflects progress on the strategy we are executing as we continue to concentrate our resources on the categories and markets where we have a clear competitive advantage. While it is still early in the fiscal year, we believe this initial progress demonstrates that we are on the path to delivering on our full-year outlook. Before I get into the details, I want to highlight a significant milestone for Edgewell Personal Care Company. As you saw in our recent announcement, we have successfully closed the sale of our feminine care business to Essity. The transaction closed as scheduled, and importantly, the estimated annualized impact of the divestiture is expected to be favorable to our previous health. This transaction is a pivotal step in our transformation journey and reflects our long-standing strategic intent to sharpen our focus on the categories where we have clear competitive advantages and strong momentum: Shave, Sun, Skincare, and Grooming. By simplifying our portfolio and reallocating capital and resources towards these core businesses, we believe we are strengthening our ability to compete and invest where it matters most. This move, we believe, positions Edgewell Personal Care Company to be a more focused, agile, and durable personal care company. One we believe can drive sustainable growth, deliver stronger margins over time, and create long-term value for our shareholders. Now turning to our performance highlights. We delivered a solid start to the quarter, executing well in a dynamic operating environment. Overall results came in ahead of our expectations as strength in North America offset expected softness in international markets. Organic…

Thank you, Rod. As Rod outlined, we made important progress in the quarter and took decisive actions to further sharpen our portfolio and strategy. We had a solid start to the fiscal year with results modestly better than our expectations on a continuing operation and a consolidated basis. On a consolidated basis, organic net sales declined 30 basis points, adjusted EPS were $0.3, and adjusted EBITDA were $38 million, all better than our outlook. Now let's turn to our performance in the quarter on a continuing operations basis. Organic net sales decreased 50 basis points this quarter, as strong performance in Sun Care and Grooming were more than offset by declines in Wet Shave and Skin. North America organic net sales grew just under 1% in the quarter, driven by meaningful growth in the quarter in Sun Care as certain retailers placed seasonal orders earlier than expected, in addition to strong growth in Grooming, partially offset by Wet Shave and Skin. International organic net sales decreased 1.6% as expected, primarily due to NPD phasing in Wet Shave in Japan and Sun Care sales in distributor markets, where we cycled a large sell-in a year ago as Rod discussed earlier. Outside of this impact, we delivered growth in our other key markets, with Oceania and Greater China experiencing double-digit growth while Europe delivered low single-digit growth. Wet Shave organic net sales declined approximately 4% as substantial growth in preps was more than offset by declines in disposables, and men's and women's systems. International Wet Shave declined less than 1% as volume declines were partly offset by price gains reflecting continued category health, solid distribution outcomes, and strong end-market brand activation. North America Wet Shave declined in the quarter, driven by challenged category and channel dynamics. In the U.S., razor and blades…

Yes, thank you. Good morning, everyone. Hey, Rod, just in a kind of post-feminine care world, just wanted to get your thoughts on portfolio construction. Obviously, you have proceeds coming in. Just wanted to get your thoughts on how you're thinking about the portfolio, M&A, and any thoughts around just kind of helping to lower the seasonality of the business? When you think about the portfolio long term? Thanks.

Yes. Thank you, Nik. Good morning. So from a 150 basis points better in gross margin now without feminine care than we were before. It was capital intensive. And so this was a big strategic move for us to separate and sell this business. The right buyer, which we accomplished. Then what's left is we think a really compelling and interesting company focused on shave, grooming, sun, and skincare. These are global businesses for us. We have scale. We have know-how. And increasingly, the branding and the marketing capability to generate not only awareness but desirability to get through the funnel and household penetration, all the key metrics. Would want that we've been missing in the past. We're focused on those categories. We've got five power brands within those categories. That we're consolidating investment against. And I think we're increasingly confident that we can grow within the range we've always talked about. And two to 3% And it doesn't start next year, it starts in quarter three as we've said, as we get the distribution and planogram outcomes domestically here in the U.S. through which we're positive across the board. We have new innovation launching in the second half. We have higher pricing in international markets in shave primarily coming through. And then we've got our campaigns turning on. As the weather warms up, you'll see our campaigns light up with pretty heavy incremental spend against them because we really like the content. We'll we think we can do. So we're super excited about where we go from here. We've been waiting a long time to get to this point. And we're here now. Nik, on the seasonality question you had, look, Sun Care is a seasonal business. As you know, Q1 is a historic low point, particularly in the Northern Hemisphere. It's obviously the opposite at the Southern Hemisphere. Q2, Q3 are the big seasonal quarters. Behind that. What we are seeing happen though in the sun care category is it is flattening out a bit with a longer season on the front and back end. But we still do have that seasonality in our business that we'll just have to contend with over time. And it's as far as M&A, we're not focused there. We are taking the proceeds towards debt reduction. To get our leverage from you know, more around four to ending the year around three times levered. Which is leverage reduction that we feel good about. Share repurchase at the right price will always be in there as an option. And, you know, if M&A were ever to make sense, it would have to be, you know, super obvious and accretive and makes sense to everybody, including our shareholders, first and foremost.

Thank you.

Thanks, Nik. Operator, next question please.

The next question comes from Chris Carey with Wells Fargo. Please go ahead.

Hey, good morning, everyone. Can you just expand on the expectations for fiscal Q2 organic sales, maybe talk about the differences between North America and the shipment timing in the international business and how do you think about the contribution of North America versus international once we get beyond Q2 into the back half of the year? I have a follow-up.

Yes. So I'll start with let's talk Q2 for a moment. International. I'll take and then, Fran, you can build on this. In international, we have two things going on in the first half. The first is we've had a sun care shipment to our distributor markets that the entire year's worth of volume went in the first quarter last year, due to a formulation regulatory change and just the timing of how we had to manage that. Regulatory change. This year, that's even across all four periods. As you now get into Q2, we have a phasing around innovation primarily driven by Japan that's fairly material. Where we are taking stock back in the market in Q2. Putting new product, new innovation into the markets, meaningful innovation. Across men's and women's systems that will go into the market in Q3 with higher pricing behind it. So the combination of those two you will actually have international back to growth in quarter two. But it's slight growth International, the first half is going to be somewhere around flat. In the back half of the year, six plus percent. As we see it lining up. So that's the international piece. And, Fran, I don't know if you wanna talk to Sun Care a little bit, America. And then the second half innovation and planogram. Yeah.

Chris, good morning. Thanks for the question. So just specifically on Q2, we're expecting organic net sales to be down about 3%. There's a little bit of timing shift between Q1 and Q2, specifically around sun care phasing that was probably worth about 150 basis points. And then we also had the anticipated phasing in Japan for some NPD promo phasing that was between Q2 and Q3. I think most importantly for the half one, we're down 2%. That's what we expect it to be. And overall EBITDA profile is about a third of the year, which is what we called out in our previous outlook. So nothing has changed. A little bit of noise between Q1 and Q2. But really, we're lined up well based on this performance to deliver the full-year outlook.

Okay. Thanks. Can you I guess, expand a bit on the implications for feminine care dilution into maybe fiscal 2027? And I say that because I think the impact this year is about two times the annualized impact mean does that mean that should expect above algorithm earnings growth and fiscal 2027 as you cycle that impact from fiscal 2026? Maybe just expand on that a bit. Thanks.

Yeah. I think, Chris, we got two things going on. We've got transitional services agreement that we've struck with Essity to provide them services for an extended period of time up to a year in some cases. Around some of the service lines. There's an income stream that comes with that. This year. And for the next twelve months. What we also have then is a second factor is we've got a stranded cost primarily in SG&A let's call it, issue that we have to deal with just as the business comes out of a highly integrated structure, which we had, we've got to go address those stranded and right-size the overhead structure of the company to match the new sales revenue line that we have, and we will do that. That will take us some time, but we're committed to doing that. I don't know if there's anything to add to that.

Yeah. No. I think what's most important is when we talked about it at the last earnings call, the impact of segment EBITDA was about $26 million. And then you have the impact of stranded that Rod has talked about, which we're estimating to be around $30 million to $35 million. But the TSA income will mitigate probably about 75% to 80% of that, and that will take us the middle of 2027. We've got plans underway right now to start to address those stranded costs, and that will be, you know, probably about eighteen to twenty-four months, post the start of the TSA to really bring that into full realization. So we feel like we're in good shape there. I think, specifically, Chris, to your top-line question, we anticipated that feminine care was going to be within the total company range for our outlook. So about flat before the divestiture. So we do expect as we ramp up performance in North America for our growth profile to accelerate moving forward.

Yes. And Chris, I will add, we're obviously not going to guide to 2027. Or beyond today. But I think the one of the points you were making we're going to have a stronger portfolio instead of brands. As we look to next year that we're more confident that we can grow nicely. We also are going to have a more profitable P&L. We pick up 150 basis points with no other changes just by having feminine care out. And so we picked that up. The other thing I will point to is we are going to have a really nice cash flow recovery as we look to fiscal 2027 as well. And we're going to put a marker out. We ought to be at a $150 million plus free cash flow as we look to next year. And so from a recovery standpoint, I think the cash flow piece of this is one of the biggest recovery items we'll have primarily because we have all the one-time spend in the Wet Shave consolidation. Hitting 2025-2026, the bulk of that's behind us, and then we start to get the benefit in 2027. As well as some of the cash conversion inventory things that the shape manufacturing unlocks. So you're right. We will have some natural pickup in 2027.

Okay. Thank you.

Thank you, Chris. Operator, next question please.

The next question comes from Peter Grom with UBS. Please go ahead.

Great. Thank you. Good morning, everyone. Two questions for me. I guess, one, just following up on organic sales phasing. So there's a lot of detail that you provided to Chris' question on the timing components. But as you look out to the back half of the year, what are you expecting in terms of category growth? I guess what I'm trying to get at is is the improvement more related to timing and execution and no shifts in category growth expectations? And then my second question is, Rod, you talked about kind of returning to the 2% to 3% top-line growth. And I know there's a lot of moving pieces as it relates to this year. But with the divestiture now in the rearview, can you maybe just talk about your confidence around delivering more sustainable growth in the U.S.? Thanks.

Yes. Will do. So on the sales phasing for the balance of the year, let's call it Q3, Q4, we have an assumption that the category growth rates that we planned on at the beginning of the year are still relevant and still the right level of category growth rates to have in there, which is effectively low modest growth, kind of around 1% to 2% on an aggregate basis globally. We are seeing a little bit of slowdown recently in some cases, but I wouldn't say it's meaningful to change our view on the balance of the year. Where you're going to see the second half ramp up and pick up is going to be around better performance relative to the category, i.e., share growth. And you're already starting to see that in some of the consumption reports come through. I think we see it. You all probably see that as well. And what's going to happen as we get into the back half of the year we have better distribution across the board. Cremo and Hawaiian Tropic are leading the way with material increases in distribution outcomes. Those shelves are resetting now over the next six to eight weeks. It'll largely be complete. So as we get into Q3 and Q4, we have the tailwind of that better set of distribution outcomes. We talked about incremental pricing primarily in international markets. Also hitting with new innovation in Q3, Q4, feel really good about that. And from a share perspective, we will see an improved share position in the back half in both Japan and China. With the plans that we have in place and what we know is launching. And we pivoted to positive shave share in Europe. For the first time since separation from Energizer, this company…

Great. Thank you so much.

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

The next question comes from Olivia Tong with Raymond James. Please go ahead.

Great. Thanks. Good morning. First, just a point of clarification on Sun Care. Part of the Q1 strength in Q1 came from Sun and Skin, and you mentioned that retailers choosing to stock earlier for the season. Why do you think that's the case given that you know, most categories right now, retailers seem to be actively trying to push the pipeline for seasonal categories closer and closer to the start of this season, so basically later. And then following up on that, the full-year outlook for EPS and sales, you did keep an atypically wider EPS outlook despite the feminine care divestiture now having closed. So can you talk about what it incorporates the lower to the upper end? Thanks.

Yes. Good morning, Olivia. Look, on Sun Care, I think it's a situation where it's been a good start to the season. Early season in sun care, the category has been growing consistently versus a year ago. And so I think as retailers look at that combined with the timing of when Easter hits this year, it just sets up in some cases for them to be a little earlier on the orders. In this case, a week or two can make a difference. Right? It can come out of early January into later December. And so I think we just saw some of that shifting happening. But look, it's a good start from a category perspective. I think it's the biggest thing driving it. And I wouldn't read more into it than that. We're not changing our outlook for the year for Sun Care. But it certainly gives us more confidence that what we put in is achievable. Fran, do you want to touch on the EPS outlook?

Yes. Good morning, Olivia. It's important to note that when we thought about our outlook around the key metrics for the prior year, the range really hasn't changed. We had expected on a combined basis that feminine care was broadly going to be in line at the total company level. So pulling feminine care out around organic sales growth, gross margin accretion, the rate year over year remains solid. The only thing that has changed in our outlook is really the impact of the net spend divestiture coming out and that you're seeing that impact in adjusted EBITDA and adjusted EPS. And I'd probably point to the earnings release as well. We included an EndNote eight, a good walk down that takes you through all the pieces of the divestiture. So we're still committed, and believe that the midpoint of the range is where we are targeting for the year. Nothing has changed on that profile. Q1, we delivered slightly ahead of expectations that only reconfirms our commitment to grow in the balance of the year. And I think as Rod alluded to earlier on, really encouraged by the distribution outcomes in North America. That has been at or better than expectations across the board. So once we head into half two and sort of move past the noise of half one, really encouraged to come back to growth.

Got it. Thank you.

Thank you, Olivia. Operator, next question please.

The next question comes from Susan Anderson with Canaccord Genuity. Please go ahead.

I guess maybe just a follow-up on Wet Shave in North America. And just the promotional level. It seems, you know, it's obviously been promotional for some time. So I guess I'm just curious. Are you seeing it pretty similar across all of the channels or are certain channels more promotional than others? And then also, I guess, do you expect this level to kind of persist the rest of the year? You think there's things going on that maybe will bring that back? Thanks.

Yeah. Good morning, Susan. Shave North America, so it's from an off perspective, it's the weakest part of our business. At the moment. Right? If you're looking backwards and looking at printed growth rates. It's a part of the business as we roll forward here again to the second half. We're pretty confident you're going to see a different trend come through and a better trend as we have the new distribution hit, the innovation gets in. And we get into what I would say the peak of the season. But your point around the promotional intensity, the competitiveness of that category still remains very high. We built in, I would say, a slightly higher than typical spend against price promotion dynamics in the category. It's most pronounced in women's, which I would say is the most competitive. We've had competitors driving price discount rollbacks at some of the big retailers. In response to some of the competition that's come in. Frankly, there's too many brands for the space right now. We're very confident that our Schick and Billy brands are part of the future. But as we work through what is a crowded landscape, you just have that promotional intensity in. I suspect it will continue for the balance of this season. As we go through the rest of our fiscal year. We've planned accordingly. We have more tools as we get into the back half of the year along with some new campaigns and incremental investment on both Billy and Schick. As we go forward. So I think our ability to put a better result up in the back half of the year is absolutely there with everything we have line of sight to. I think longer term, as we get more focused on winning in shave, in the U.S., including in men's systems, I think we're confident in our path forward. We've got a really good innovation pipeline. And as I mentioned in one of the earlier answers, we have an increasingly capable team that can build brands in a very interesting way that resonate with the target consumers. And that's been our big missing capability in North America over the last four or five years.

Okay. Great. Thanks for all the details. Maybe if I could just follow-up just on the inventory at retail. Are there any pockets still of higher inventory across your categories out there, whether that's North America or international? Where you would expect still some retailer destocking. And then also just on private label sales, are you seeing any trade down there at all from the branded business? Thanks.

Yeah. We're not aware of any meaningful inventory pockets, Susan. In fact, if you look at our printed results versus consumption, you'd maybe draw the opposite conclusion for our brands and our categories. Right? So we don't see inventory as being any meaningful issue that we have line of sight to anywhere. And I think as we move forward, you know, we're going to be very close to the consumption flows and then feeding it.

Yeah. And I would say, Susan, what's most important is that we are seeing unit share up. So as we think about value share in the U.S. specifically, we're about flat, but unit share is up, and we're seeing that hold true across our key retailers like Walmart and Target. So inventory levels are really what we believe at a healthy level across retail.

Yeah. And then just to close it off, Susan, we're not seeing any meaningful trade down. Private label shares are stable, I would say, in terms of the size of that part of the business. What we are seeing though is consumers deal seeking, value seeking within across all brands. And so there is a lot of price elasticity right now. But I think, you know, to the point Fran's making, the branded piece of this is up. So I think structurally, we're seeing we're still seeing healthy categories with no material trade down. But it's something we're watching very closely because we are seeing a little more pressure come against the target consumer.

Okay. Great. Thanks so much. Good luck for the rest of the year.

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

There are no more questions in the queue. I would like to turn the conference back over to Rod Little for any closing remarks.

All right. Thanks, everybody. Look, there's a lot of noise this quarter with the divestiture of feminine care. And what's continuing versus discontinued operations and all that goes with it. It's complicated, but the key message here is we're on track the first quarter, feel good about the fiscal year. And we have cash in the bank from the feminine care sales. So we feel good about the start. We'll give you an update in early May. Thank you.

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