Q2 Performance: Edgewell Personal Care

Edgewell Personal Care Company says second fiscal quarter organic net sales decreased 0.7% in the quarter and 0.1% year-to-date. Excluding the impact of international go-to-market changes, sales would have increased by 1% and 1.9%, respectively.
 
According to maker of Banana Boat and Hawaiian Tropic sunscreeens, net sales for the quarter ended March 31, 2016 were $611.2 million in the quarter, a decrease of 6.1%. Organic net sales decreased 0.7%, including a $10.9 million negative impact from international go-to-market changes.  Organic net sales growth in wet shave and sun and skin care was offset in part by lower sales in feminine care. North America net sales were down 0.8%, though wet shave and sun and skin care both grew.  International net sales were down 0.3%, though up 4.5% excluding the negative impact of international go-to-market changes.  Underlying international net sales grew across the Wet Shave portfolio, with particular strength in men's systems, driven by strong Hydro performance in Asia and Europe.
 
Adjusted EBITDA was $137.7 million for the quarter and $232.1 million year-to-date.
 
“Our second quarter results were in line with our expectations, and we are pleased with the progress we're making in this important first year operating as a standalone company.  Our underlying top-line growth was up nearly 2% through the first half of our fiscal year, excluding the impact of international go-to-market changes,” said David Hatfield, Edgewell's president and CEO.  “Delivering solid underlying net sales growth driven by wet shave and sun and skin care, while executing on key initiatives, like our complex international go-to-market strategy, reinforces our view that Edgewell's innovation and products are resonating in the marketplace and that we're taking the necessary steps to further enhance our position for future growth and value creation.”
 
Wet shave organic net sales increased $1.5 million, or 0.4%. Excluding an estimated $9 million negative impact from international go-to-market changes, underlying net sales would have grown 2.7%.  Underlying growth was primarily driven by the Hydro launch globally as well as Hydro distribution gains in North America.  Organic net sales for the remaining brands declined, in part due to international go-to-market changes and unfavorable price mix from promotional investments.  International underlying sales increased in men's and women's systems, disposables and shave preps.  Organic segment profit declined $13.2 million, or 13.2%, driven primarily by increased investments in A&P, promotional spend and Research and development expense, which more than offset higher sales volumes and better cost mix.
 
Net sales reported by sun and skin care, which includes its wipes and gloves brandsincreased $4.9 million, or 3.8%, driven primarily by growth in North America, with growth across both the Banana Boat and Hawaiian Tropic brands.  Organic segment profit improved $2.8 million or 7.5%, driven by higher sales volumes and modestly better cost mix.
 
Edgwell’s feminine care organic net sales decreased $9.3 million, or 9.2%. 
 
Organic net sales of the rest of the company’s business, labeled “all other” decreased $1.6 million, or 3.4%, as continued growth in Diaper Genie was more than offset by lower sales volumes in infant cups and bottles resulting from continued competition in the category.