What happened?

Shares of Edgewell Personal Care (EPC 0.26%), a leading consumer products company with a long list of brands focused around shaving, feminine care, and sun and skin care, among other categories, are down 15% after management released fiscal 2019 second-quarter results and announced an acquisition.

So what

Starting with second-quarter results, net sales declined 10.1% from the prior year's result to $546.7 million, which fell short of analysts' estimates calling for $562 million. Adjusted earnings per share checked in at $1.13, which was a decline from the prior year's $1.31 per share but better than analysts' estimates of $1.00 per share.

There were a number of red flags for investors to digest, however. Organic revenue declined 9% during the second quarter, adjusted gross margins slipped 350 basis points to 46%, and adjusted SG&A expense rate moved 60 basis points higher to 17.3%.

Woman shaving her leg.

Image source: Getty Images.

Now what

"As expected, we faced several timing and transitory headwinds in the fiscal second quarter that negatively impacted our top line performance. We are continuing to execute on Project Fuel and make aggressive changes across the organization to realize meaningful cost savings that will increasingly be reinvested in support of our topline growth objectives," said Rod Little, Edgewell's president and CEO, in a press release.

With the second quarter in the books, management also announced the acquisition of Harry's, Inc., a cash-and-stock transaction valuing Harry's at $1.37 billion. The acquisition makes sense for Edgewell and will give Harry's proven brands global scale and infrastructure while boosting Edgewell's e-commerce capabilities, which have lagged behind those of competitors. With most of the headwinds now behind the company, investors should look for improved performance through the second half of Edgewell's fiscal year.