Edgewell Personal Care Company Canaccord Genuity's 46th Annual Growth Conference

Thanks for attending our conference. I'm Susan Anderson, one of Canaccord's consumer analysts, and I'm very excited to have with us Edgewell Personal Care, and in particular CFO Fran Weissman and Chris Gough, Vice President, IR, Corporate Development, and Treasury. Fran, I guess I'd maybe like to start off with just a broader question. At the beginning of the year, you laid out a framework that the business would return to growth, and I think there was some skepticism around it. But nine months later, we're here, and we've seen the business return to growth, North America's returned to growth. We've really seen a nice inflection. Maybe if you can talk about the key drivers there behind that improvement and the initiatives that have helped to return the business to growth.

Thanks, Susan, and thanks for having us here this morning. Our framework has been pretty consistent, and I'm glad you mentioned the fact that it's remained largely unchanged from the beginning of the year. We took deliberate steps to really simplify our portfolio and sharpen our focus, and the exit of Feminine Care was an important milestone for that, because it allowed us to focus capital, focus our management's attention, and more importantly, focus our innovation capabilities around categories and a portfolio of brands where we felt we had more of a competitive advantage to win. We were always a back-half story, and a lot of that was driven off of the fact that we started our investment profile over 18 months ago, and we knew that those distribution gains, specifically within the U.S., and planogram resets were more towards the second half.

It's encouraged to see Q3 return to growth, and it's really driven off of North America. What we're seeing is better commercial execution. We're seeing better shelf presence and distribution gains and really stronger brand support across the business. When you look at our focus brands like Hawaiian Tropic, Cremo, Schick, you're really seeing momentum improve, not only in our sales trajectory, but also in our share trajectory. There's still a lot more work to do, particularly in North America to drive consistency of growth, but we really feel like we have the right actions in place to continue to deliver long-term.

Great. I guess, just looking out over the long term, given the improvement we've seen and the optimism there, how are you thinking about the long-term growth trajectory? I think in the past, you've talked about 2%-3%. Is that kind of what we should expect, or can we expect maybe even a little bit higher than that? Also maybe if you can talk about international versus domestic and where you see the differences in growth coming from.

Yeah. We are not giving fiscal 2027 guidance today. We will come back in November and give more detail. I think what I can share is that as we exit fiscal 2026, we are in a much stronger position, and I think that growth trajectory in the second half really becomes a good proxy for what we anticipate moving forward. There are a couple of factors that give me confidence. First and foremost, we have a much better and focused portfolio globally that now with brands having stronger equity, stronger penetration, and good distribution gains, we are leading into 2027 in a much healthier position around distribution and formidable growth.

I think the other piece is that 40% of our portfolio is actually in sun and skin, and those are faster-growing categories, and we are participating with brands like Hawaiian Tropic and Cremo, which has consistently been growing market share, and Cremo has been growing double digits. I think the last piece is that now we have got multiple growth engines. We now see that all markets are contributing to growth. Historically, it has disproportionately been international, but we see North America returning to growth, and that is driving more durability in our future stance. We have got the right actions in place. It is not one particular initiative. I think we are in a much better position moving forward.

Okay, great. Then maybe just stepping back and looking a little bit more near term, maybe if you could talk about the drivers that you put in place that drove the organic sales growth in this quarter, and also what gives you confidence that that will continue into fourth quarter.

Yeah. I think for Q3, what we knew is that we actually, within the U.S., had brand campaigns that were focused around all our five core brands, and it was really important to see the unit share growth. We have been growing 39 of the last 43 weeks, specifically within North America, and about 70% of our markets are actually growing or holding share year to date. Those become a really great platform for proof points to continue on, and to continue our growth factor. Half two was always going to be a growth story, and Q4 is our strongest growth quarter, and what we are anticipating is the combination of international returning back to mid-single-digit growth. They have always been very strong in Q4, back-loaded in terms of the sun season.

Now that we've worked through some of the wet shave disruptions that we had in Q3, we see international returning back to that mid-single-digit growth. North America, we've seen the proof points. We think they will continue to remain at a growth trajectory through Q4, and it's really supported by a step up in A&P. We talked about growing A&P about 70 basis points for the year, and within half two, 60% of that incremental spend is actually in Q4. So we're set up to really end the year in a positive note and start fiscal 2027 strong.

Okay, great. Then maybe let's turn to the segments, starting with the sun and skin care. Maybe if we could start off with sun care. The sun season has been better this year, modest, a little bit weaker last year. Maybe if you could talk about Hawaiian Tropic, which has seen some really good performance. You guys had a great marketing campaign around the brand this year. Where do you see that brand longer-term, and is there innovation to be had there?

Yeah, I'll take that one, Susan. I'm going to go back to a point that Fran made, and I'll talk about sun and skin in total first, and then we can get into the piece parts. But 40% of the whole company now in that faster-growing categories, we've got better market share, better rate to win. So that's a real big accomplishment. When we laid out that structure several years ago in our last investor day, it was 25% of the business. We got it up to over a third of the business. That was before the FemCare divestiture, and now it's 40. So being able to grow that part of the business is meaningful, and that's U.S. and international. Within that, Hawaiian Tropic, one of the stronger growing brands. It's beauty and premium based.

It's on trend with tanning. We started the campaign a couple of years ago to refresh the packaging, refresh the brands. Innovation is always at the core there. We're expanding across greater, not really beauty, but just other adjacencies within the sun care space. We've got higher investment against it, household penetration increasing, share increasing. So we think there's a lot of legs for Hawaiian Tropic, and it fits from a segmentation point of view in that beauty and premiumization space, which is very different- from the next topic, which is Banana Boat.

Yeah. Okay, great. I will go to Banana Boat.

Yeah. Go ahead and go to Banana Boat.