Please ensure Javascript is enabled for purposes of website accessibility

Why Edgewell Personal Care Is Falling Today

By Rich Duprey – Aug 4, 2020 at 11:48AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The razor maker's scruffy appearance this quarter was brought on by the coronavirus pandemic.

What happened

Shares of Edgewell Personal Care (EPC -0.92%) were tumbling 11% in morning trading Tuesday, after the company reported fiscal third-quarter results that missed analyst expectations on the top and bottom lines. 

So what

The owner of Schick razors suffered a considerable decline in sales as stay-at-home orders to combat the coronavirus pandemic minimized the need for personal grooming and sun care products.

A man shaving his face

Image source: Getty Images.

Edgewell management says that, when taking into account the impact of COVID-19, its organic sales were actually flat to just slightly down compared with the year-ago period, in keeping with its recent trend.

Now what

Earlier this year the Federal Trade Commission determined that Edgewell Personal Care's acquisition of direct-to-consumer (DTC) brand Harry's was nothing like Unilever's purchase of Dollar Shave Club, and it squashed the takeover attempt. Edgewell had wanted to buy Harry's to help juice sales, which as its management noted, were flagging even before the pandemic.

The regulator decided that, while Harry's started as a DTC brand, it had since expanded into the brick-and-mortar retail space -- unlike Dollar Shave Club, which remains online only -- so Edgewell would have too much of a competitive edge, despite Harry's minuscule 2.6% market share.

The pandemic showed having an online presence would have been helpful, as Edgewell's organic sales tumbled 15% in the quarter. Total revenue of $484 million was down 20.6%, missing estimates of $530 million, while earnings of $0.66 per share plunged 40% and missed expectations of $0.82 per share.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Edgewell Personal Care Stock Quote
Edgewell Personal Care
$38.87 (-0.92%) $0.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.