Brand Innovation And International Expansion Will Unlock Future Value

Key Takeaways

• Brand innovation, e-commerce expansion, and targeted marketing are increasing market share and supporting sustained growth and improved margins across core and international markets.
  
• Cost efficiency measures and business transformation efforts are funding brand investment and driving multi-year improvements in revenue, operating margins, and earnings.
  
• Heavy dependence on declining categories, weak pricing power, competition, cost pressures, and ongoing promotional spend threaten profitability and the potential for sustained revenue or margin growth.

Catalysts

Manufactures and markets personal care products worldwide.

• Edgewell is aggressively investing in brand innovation and targeted marketing campaigns (e.g., digital-first initiatives with Hawaiian Tropic and Cremo, new Hydro Silk packaging/campaign), which are already driving market share gains across core brands and should support above-category sales growth and improved pricing/mix, positively impacting future revenue and gross margins.
  
• Consistent mid
• to high single-digit organic growth in international markets, now 40% of sales, is supported by rising middle-class demand and successful category entries (e.g., Bulldog Skin Care in EU, Billie Wet Shave launch in Australia), positioning Edgewell to benefit from global consumer health, self-care, and premiumization, which is a multi-year revenue and operating leverage catalyst.
  
• Sustained productivity and cost efficiency initiatives-including automation, global sourcing optimization, and commercial reorganization in North America-have delivered significant gross savings (270–300 basis points in recent quarters) and are expected to continue, funding incremental brand investment while structurally expanding future operating margins and net income.
  
• The company is leveraging omnichannel and e-commerce expansion (evidenced by Cremo Amazon campaign and international DTC launches), which enhances reach, builds data-driven marketing capabilities, and offers higher-margin sales opportunities, supporting both top-line growth and margin accretion.
  
• Ongoing North American business transformation-including new leadership, streamlined operations, and increased consumer-focused brand building-aims to reverse recent underperformance in Edgewell's largest market. Early improvements in on-shelf performance and share, coupled with elevated investment, support the outlook for a multi-year recovery in revenue, margin, and earnings.

Edgewell Personal Care Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Edgewell Personal Care's revenue will grow by 2.3% annually over the next 3 years.
• Analysts assume that profit margins will increase from 2.9% today to 10.3% in 3 years time.
• Analysts expect earnings to reach $242.7 million (and earnings per share of $3.05) by about August 2028, up from $64.8 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 5.9x on those 2028 earnings, down from 15.8x today. This future PE is lower than the current PE for the US Personal Products industry at 21.0x.
• Analysts expect the number of shares outstanding to decline by 5.09% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 11.03%, as per the Simply Wall St company report.

Edgewell Personal Care Future Earnings Per Share Growth

Risks

• Persistent reliance on mature or declining product categories, such as Wet Shave and certain Sun Care brands, combined with increased promotional activity to defend share in highly competitive markets (especially in U.S. Women's Shave), could lead to ongoing volume declines, margin compression, and stagnant or negative revenue growth.
  
• Growing retailer power and tight inventory management in North America-exemplified by continued destocking in fem care and other categories-signal a tougher environment for branded suppliers, likely eroding pricing power and resulting in softer revenues and lower net margins.
  
• Intensifying competitive dynamics in core categories, particularly with new entrants in Sun Care and proliferation of both private labels and direct-to-consumer brands, risks further commoditization of Edgewell's product lines, negatively impacting brand equity and potentially causing sustained gross margin and earnings pressure.
  
• Heightened tariff volatility, unpredictable foreign exchange impacts, and ongoing macro complexity in global supply chains could drive up costs (notably $40-50M in possible annualized tariff exposure and currency headwinds), threatening profitability and compressing net earnings if mitigation efforts are insufficient.
  
• Sustained elevated investment in advertising, promotion, and trade support (A&P as a percentage of net sales has trended up), while necessary to regain U.S. market momentum, risks depressing operating profit and free cash flow in the longer term, especially if top-line recovery or margin improvements remain modest or slower than expected.

Valuation

• The analysts have a consensus price target of $26.0 for Edgewell Personal Care based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $32.0, and the most bearish reporting a price target of just $21.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.4 billion, earnings will come to $242.7 million, and it would be trading on a PE ratio of 5.9x, assuming you use a discount rate of 11.0%.
  
• Given the current share price of $21.72, the analyst price target of $26.0 is 16.5% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.