Spin-off hits Edgewell Personal Care results

Edgewell Personal care, which was recently spun-off from the Energizer business, has reported weaker financial results as executives continue to establish the framework for a stand-alone business.

The company reported that net sales for the fourth quarter fell by 14.4% to $560.1m, compared to $654.7m in the corresponding quarter last year.

Likewise, the fall in sales and rising costs associated with the spin-off also hit profits, with a net income of $85.2m in the corresponding period last year turning into a loss of $219.5m for the current period.

Biggest declines in wet shaves

The sales figure was hit by revenue declines for Wet Shaves, Sun and Skin Care, which fell by 14.5% and 4.2% respectively, whereas the cost of sales as an overall percentage also rose by 8.5%.

The company said that on top of those higher costs, it was also hit by incurred incremental costs from evaluating, planning and executing its spin-off from Energizer.

"During the quarter we executed against our international go-to-market initiatives and invested in our brands, actions that will help position us well strategically for the future,” said David Hatfield, Edgewell’s president and CEO.

“Our top and bottom-line results reflect those actions, and while our results for the quarter came in below expectations, they do not change our view of 2016 or affect the long-term strategy that we laid out at our analyst day in June 2015.  We are confident that we are taking the right steps to position our company for future growth and success." 

Full financial year results

For the full financial year, the company reported a net sales decrease of 7.3% to $2.42bn, with Wet Shave, Sun and Skin Care, and Feminine Care segments falling by 9.1%, 4.9%, and 1.6%, respectively.

Reflecting the falling sales and costs associated with the spin-off, net income fell from $356.1m in the previous fiscal year, to a loss of $275.3m for the current fiscal year.