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☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

____________________________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading symbol(s)			Name of each exchange on which registered
Common Stock, par value $0.01 per share			EPC			New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

(Do not check if a smaller reporting company)

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common shares, $0.01 par value - 50,811,891 shares as of July 31, 2023.

(unaudited, in millions, except share data)

 

			June 30, 2023						September 30, 2022
Assets
Current assets
Cash and cash equivalents			$	207.4					$	188.7
Trade receivables, less allowance for doubtful accounts of $6.2 and $3.8			121.5						136.9
Inventories			502.5						449.3
Other current assets			157.2						167.3
Total current assets			988.6						942.2
Property, plant and equipment, net			339.8						345.5
Goodwill			1,336.1						1,322.2
Other intangible assets, net			983.7						996.6
Other assets			118.1						106.6
Total assets			$	3,766.3					$	3,713.1
Liabilities and Shareholders’ Equity
Current liabilities
Notes payable			$	17.7					$	19.0
Accounts payable			241.1						237.3
Other current liabilities			321.0						291.7
Total current liabilities			579.8						548.0
Long-term debt			1,323.1						1,391.4
Deferred income tax liabilities			142.3						140.4
Other liabilities			170.0						173.6
Total liabilities			2,215.2						2,253.4
Shareholders’ equity
Preferred shares, $0.01 par value, 10,000,000 authorized; none issued or outstanding			—						—
Common shares, $0.01 par value, 300,000,000 authorized; 65,251,989 issued; 50,892,000 and 51,573,001 outstanding			0.7						0.7
Additional paid-in capital			1,586.3						1,604.3
Retained earnings			991.2						931.7
Common shares in treasury at cost, 14,359,989 and 13,678,988			(876.3)						(860.9)
Accumulated other comprehensive loss			(150.8)						(216.1)
Total shareholders’ equity			1,551.1						1,459.7
Total liabilities and shareholders’ equity			$	3,766.3					$	3,713.1

(unaudited, in millions)

			Nine Months Ended June 30,
			2023						2022
Cash Flow from Operating Activities
Net earnings			$	83.4					$	64.9
Depreciation and amortization			68.1						67.1
Share-based compensation expense			19.8						18.4
Loss on sale of assets			1.1						0.6
Defined benefit settlement loss			7.2						—
Deferred compensation payments			(4.9)						(7.1)
Deferred income taxes			(0.6)						(10.6)
Other, net			(13.6)						(4.8)
Changes in operating assets and liabilities			7.8						(56.1)
Net cash from operating activities			$	168.3					$	72.4
Cash Flow from Investing Activities
Capital expenditures			(31.1)						(37.4)
Acquisition of Billie, net of cash acquired			—						(309.4)
Collection of deferred purchase price on accounts receivable sold			1.5						5.6
Proceeds from sale of Infant and Pet Care business			—						5.0
Other, net			(2.0)						(1.4)
Net cash used by investing activities			$	(31.6)					$	(337.6)
Cash Flow from Financing Activities
Cash proceeds from debt with original maturities greater than 90 days			645.0						534.0
Cash payments on debt with original maturities greater than 90 days			(715.0)						(413.0)
Proceeds (payments) of debt with original maturities of 90 days or less			5.1						(4.3)
Repurchase of shares			(45.2)						(110.1)
Dividends to common shareholders			(23.8)						(24.7)
Net financing inflow from the Accounts Receivable Facility			9.6						6.5
Employee shares withheld for taxes			(9.0)						(10.4)
Other, net			1.0						0.6
Net cash used by financing activities			$	(132.3)					$	(21.4)
Effect of exchange rate changes on cash			14.3						(11.0)
Net increase (decrease) in cash and cash equivalents			18.7						(297.6)
Cash and cash equivalents, beginning of period			188.7						479.2
Cash and cash equivalents, end of period			$	207.4					$	181.6

(unaudited, in millions)

Edgewell Personal Care Company and its subsidiaries (collectively, “Edgewell” or the “Company”) is one of the world’s largest manufacturers and marketers of personal care products in the wet shave, sun and skin care, and feminine care categories. With operations in over 20 countries, our products are widely available in more than 50 countries.

The Company conducts its business in the following three segments:

•Wet Shave consists of products sold under the Schick®, Wilkinson Sword®, Edge, Skintimate®, Billie®, Shave Guard and Personna® brands, as well as non-branded products. The Company’s wet shave products include razor handles and refillable blades, disposable shave products, and shaving gels and creams.

•Sun and Skin Care consists of Banana Boat® and Hawaiian Tropic® sun care products, Jack Black®, Bulldog® and Cremo® men’s grooming products, Billie women’s grooming products and Wet Ones® products.

•Feminine Care includes tampons, pads, and liners sold under the Playtex Gentle Glide® and Sport®, Stayfree®, Carefree®, and o.b.® brands.

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its controlled subsidiaries and have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) under the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The preparation of the unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results may differ materially from those estimates. All intercompany balances and transactions have been eliminated in consolidation and, in the opinion of management, all normal recurring adjustments considered necessary for a fair statement have been included in the interim results reported. The fiscal year-end balance sheet data was derived from audited consolidated financial statements, but do not include all of the annual disclosures required by GAAP; accordingly, these unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited annual consolidated financial statements included in its Annual Report on Form 10-K filed with the SEC on November 16, 2022.

Acquisition of Billie, Inc. On November 29, 2021 (“the Acquisition Date”), the Company completed the acquisition of Billie, Inc. (“Billie”) (the “Acquisition”), a leading U.S. based consumer brand company that offers a broad portfolio of personal care products for women. The results of Billie for the post-acquisition period are included within the Company’s results since the Acquisition Date. For more information on the Acquisition, see Note 2 of Notes to Condensed Consolidated Financial Statements.

In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update 2022-04, "Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations". This guidance requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services. These amendments are effective for fiscal years beginning after December 15, 2022, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. The Company is assessing the impact, if any, of this guidance on its Consolidated Financial Statements.

The Company completed the Acquisition for cash consideration of $309.4, net of cash acquired. As a result of the Acquisition, Billie became a wholly owned subsidiary of the Company. The Company accounted for the Acquisition utilizing the acquisition method of accounting, which requires assets and liabilities to be recognized based on estimates of their acquisition date fair values. The determination of the values of the acquired assets and assumed liabilities, including goodwill, other intangible assets and deferred taxes, requires significant judgement. The Company has calculated fair values of the assets and liabilities acquired from Billie, including goodwill, intangible assets and working capital. The Company completed the final fair value determination of the Acquisition in the fourth quarter of fiscal year 2022.

The Company used variations of the income approach in determining the fair value of intangible assets acquired in the Acquisition. Specifically, the Company utilized the multi-period excess earnings method to determine the fair value of the definite lived customer relationships acquired and the relief from royalty method to determine the fair value of the definite lived trade name acquired. The Company’s determination of the fair value of the intangible assets acquired involved the use of significant estimates and assumptions related to revenue growth rates, discount rates, customer attrition rates, and royalty rates. The Company believes that the fair value assigned to the assets acquired and liabilities assumed are based on reasonable assumptions and estimates that marketplace participants would use.

The following table provides the allocation of the purchase price related to the Acquisition based upon the fair value of assets and liabilities assumed:

The acquired goodwill represented the value of expansion into new categories, markets and channels of trade and is not deductible for tax purposes. The intangible assets acquired consisted primarily of the Billie trade name and customer relationships with a weighted average useful life of 19 years. All assets are included in the Company’s Wet Shave segment.

The following summarizes the Company's unaudited pro forma consolidated results of operations for the three and nine months ended June 30, 2022, as though the Acquisition occurred on October 1, 2020. The three and nine months ended June 30, 2023 include results of Billie over the full periods presented.

The unaudited pro forma consolidated results of operations were adjusted by pre-tax amortization expense of $1.3 for the nine months ended June 30, 2022. Additionally, pro forma earnings for the three and nine months ended June 30, 2022 exclude $0.9 and $8.0 of pre-tax acquisition costs, respectively, as these costs would have been incurred in the prior year. The pro forma earnings were also adjusted to reflect the capital structure as of the Acquisition Date, and all pro forma adjustments have been included with related tax effects. The unaudited pro forma consolidated results of operations is not necessarily indicative of the results obtained had the Acquisition occurred on October 1, 2020, or of those results that may be obtained in the future. Amounts do not reflect any anticipated cost savings or cross-selling opportunities expected to result from the Acquisition.

In fiscal 2023, the Company is continuing to take actions to strengthen its operating model, simplify the organization and improve manufacturing and supply chain efficiency and productivity. As a result of these actions, the Company expects to incur restructuring and related charges of approximately $18 in fiscal 2023. To date the Company has incurred restructuring and related charges as follows:

(1)Restructuring and related costs of nil and $0.2 are included within Cost of products sold for the three and nine months ended June 30, 2023, respectively.

(2)Restructuring and related costs of $0.1 and $0.2 are included within Selling, general and administrative expense (“SG&A”) for the three and nine months ended June 30, 2023, respectively, and $0.4 and $0.6 for the three and nine months ended June 30, 2022, respectively.

The following table summarizes the restructuring activities and related accrual for the nine months ended June 30, 2023:

																					Utilized
			October 1, 2022						Charge to Income												Cash									June 30, 2023
Severance and related benefit costs			$	1.7					$	4.1											$	(4.7)								$	1.1
Asset write-off and accelerated depreciation			—						0.3												(0.3)									—
Consulting, project implementation and management, and other exit costs			0.8						4.7												(5.4)									0.1
Total restructuring activities and related accrual			$	2.5					$	9.1											$	(10.4)								$	1.2

For the three and nine months ended June 30, 2023, the Company had income tax expense of $17.7 and $29.2, respectively, on Earnings before income taxes of $70.2 and $112.6, respectively. The effective tax rate for the three and nine months ended June 30, 2023 was 25.3% and 25.9%, respectively. The difference between the federal statutory rate and the effective rate is primarily due to an unfavorable mix of earnings in higher tax rate jurisdictions.

For the three and nine months ended June 30, 2022, the Company had income tax expense of $5.8 and $14.7, respectively, on Earnings before income taxes of $36.3 and $79.6, respectively. The effective tax rate for the three and nine months ended June 30, 2022 was 16.1% and 18.5%, respectively. The difference between the federal statutory rate and the effective rate is primarily due to a favorable mix of earnings in low tax jurisdictions and the favorable impact of a change in the Company’s prior estimates.

Basic earnings per share is based on the weighted-average number of common shares outstanding during the period. Diluted earnings per share is based on the number of shares used for the basic earnings per share calculation, adjusted for the dilutive effect of share options, restricted share equivalent (“RSE”) and performance restricted share equivalent (“PRSE”) awards.

The following is the reconciliation between the number of weighted-average shares used in the basic and diluted earnings per share calculation:    

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
Basic weighted-average shares outstanding			51.1						52.5						51.3						53.5
Effect of dilutive securities:
Options, RSE and PRSE awards			0.7						0.6						0.6						0.6
Total dilutive securities			0.7						0.6						0.6						0.6
Diluted weighted-average shares outstanding			51.8						53.1						51.9						54.1

For the three and nine months ended June 30, 2023, the calculation of diluted weighted-average shares outstanding excludes 0.8 and 1.0, respectively, of share options and nil and nil, respectively, of RSE and PRSE awards because the effect of including these awards was anti-dilutive. For both the three and nine months ended June 30, 2022, the calculation of diluted weighted-average shares outstanding excludes 1.0 of share options. For the three and nine months ended June 30, 2022, the calculation excludes 0.5 and 0.3, respectively, of RSE and PRSE awards because the effect of including these awards was anti-dilutive.

 

The following table sets forth goodwill by segment:

			Wet Shave						Sun and Skin Care						Feminine Care						Total
Gross balance as of October 1, 2022			$	1,133.5					$	354.5					$	205.2					$	1,693.2
Accumulated goodwill impairment			(369.0)						(2.0)						—						(371.0)
Net balance as of October 1, 2022			$	764.5					$	352.5					$	205.2					$	1,322.2
Changes in the nine months ended June 30, 2023
Cumulative translation adjustment			10.1						2.0						1.8						13.9
Gross balance as of June 30, 2023			$	1,143.6					$	356.5					$	207.0					$	1,707.1
Accumulated goodwill impairment			(369.0)						(2.0)						—						(371.0)
Net balance as of June 30, 2023			$	774.6					$	354.5					$	207.0					$	1,336.1

The following table sets forth intangible assets by class:

			June 30, 2023																		September 30, 2022
			Carrying Amount						Accumulated Amortization						Net						Carrying Amount						Accumulated Amortization						Net
Indefinite lived
Trade names and brands			$	595.4					$	—					$	595.4					$	587.1					$	—					$	587.1
Amortizable
Trade names and brands			$	339.7					$	84.3					$	255.4					$	339.4					$	72.2					$	267.2
Technology and patents			78.6						76.1						2.5						77.8						75.0						2.8
Customer related and other			271.2						140.8						130.4						267.1						127.5						139.6
Amortizable intangible assets			689.5						301.2						388.3						684.3						274.7						409.5
Total intangible assets			$	1,284.9					$	301.2					$	983.7					$	1,271.4					$	274.7					$	996.6

Amortization expense was $7.8 and $23.2 for the three and nine months ended June 30, 2023, respectively, and $7.8 and $21.8 for the three and nine months ended June 30, 2022, respectively. Estimated amortization expense for amortizable intangible assets for the remainder of fiscal 2023 and for fiscal 2024, 2025, 2026, 2027 and 2028 is $7.7, $30.8, $30.7, $30.5, $30.5 and $30.4, respectively, and $227.7 thereafter.

Goodwill and intangible assets deemed to have an indefinite life are not amortized but are instead reviewed annually for impairment or when indicators of a potential impairment are present. The Company’s annual impairment testing date is July 1. An interim impairment analysis may indicate that carrying amounts of goodwill and other intangible assets require adjustment or that remaining useful lives should be revised. The Company determined there was no triggering event requiring an interim impairment analysis during the nine months ended June 30, 2023.

The Company leases certain offices and manufacturing facilities, warehouses, employee vehicles and certain manufacturing related equipment and determines if an arrangement is or contains a lease at inception. Leases may include options to extend or terminate the lease, and those options are recorded on the Condensed Consolidated Balance Sheet when it is reasonably certain that the Company will exercise one of those options. All recorded leases are classified as operating leases, and lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheet.

A summary of the Company's lease information is as follows:

						June 30, 2023						September 30, 2022
Assets			Classification
Right of use assets			Other assets			$	49.1					$	50.1
Liabilities
Current lease liabilities			Other current liabilities			$	8.6					$	8.8
Long-term lease liabilities			Other liabilities			41.0						41.5
Total lease liabilities						$	49.6					$	50.3
Other information
Weighted-average remaining lease term (years)						11						10
Weighted-average incremental borrowing rate						7.0		%				6.6		%

(1)Lease expense is included in Cost of products sold or SG&A expense based on the nature of the lease. Short-term lease expense is not considered material and is, therefore, excluded from this amount.

The Company's future lease payments, including reasonably assured renewal options under leases, are as follows:

Lease liability repayments			June 30, 2023
Remainder of fiscal 2023			$	2.7
2024			10.3
2025			9.4
2026			8.0
2027			6.2
2028 and thereafter			40.4
Total future minimum lease commitments			77.0
Less: Imputed interest			(27.4)
Present value of lease liabilities			$	49.6

The Company participates in accounts receivable facility programs both in the United States and Japan. These receivable agreements are between the Company and MUFG Bank, LTD, and the subsidiaries of both parties. Transfers under the accounts receivable repurchase agreements are accounted for as sales of accounts receivables, resulting in the receivables being derecognized from the Condensed Consolidated Balance Sheet. The purchaser assumes the credit risk at the time of sale and has the right at any time to assign, transfer, or participate any of its rights under the purchased receivables to another bank or financial institution. The purchase and sale of receivables under accounts receivable repurchase agreements is intended to be an absolute and irrevocable transfer without recourse by the purchaser to the Company for the creditworthiness of any obligor. The Company has considered its performance obligation to collect and service the receivables sold in the United States and Japan and has determined that such services are not material. The compensation received is considered acceptable servicing compensation and as such, the Company does not recognize a servicing asset or liability.

Accounts receivables sold were $388.7 and $916.3 for the three and nine months ended June 30, 2023, respectively, and $354.0 and $791.2 for the three and nine months ended June 30, 2022, respectively. The trade receivables sold that remained outstanding as of June 30, 2023 and September 30, 2022 were $164.6 and $78.7, respectively. The net proceeds received were included in both Cash from operating activities and Cash used by investing activities on the Condensed Consolidated Statements of Cash Flows. The difference between the carrying amount of the trade receivables sold and the sum of the cash received is recorded as a loss on sale of receivables in Other (income) expense, net in the Condensed Consolidated Statements of Earnings and Comprehensive Income. The loss on sale of trade receivables was $2.1 and $4.5 for the three and nine months ended June 30, 2023, respectively, and $0.6 and $1.1 for the three and nine months ended June 30, 2022, respectively.

The detail of long-term debt was as follows:

			June 30, 2023						September 30, 2022
Senior notes, fixed interest rate of 5.500%, due 2028			$	750.0					$	750.0
Senior notes, fixed interest rate of 4.125%, due 2029			500.0						500.0
U.S. revolving credit facility (1)			85.0						155.0
Total			1,335.0						1,405.0
Less unamortized debt issuance costs and discount (2)			11.9						13.6
Total long-term debt			$	1,323.1					$	1,391.4

(1)The U.S. revolving credit facility matures in April 2025.

(2)As of June 30, 2023, the balance for the Senior Notes due 2028 and the Senior Notes due 2029 are reflected net of debt issuance costs of $7.2 and $4.7, respectively. As of September 30, 2022, the balance for the Senior Notes due 2028 and the Senior Notes due 2029 are reflected net of debt issuance costs of $8.3 and $5.3, respectively.

Additionally, the Company had variable-rate international borrowings, recorded in Notes payable, of $17.7 and $19.0 as of June 30, 2023 and September 30, 2022, respectively.

On February 6, 2023, the Company amended its senior secured revolving credit facility in an aggregate principal amount of $425.0 dated March 28, 2020 between the Company and Bank of America, N.A., as administrative agent, and lenders parties thereto (the “Revolving Credit Facility”), to reflect the required transaction from the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”) as the dominant benchmark rate by June 30, 2023. This did not have a material change on interest expense for the period ended June 30, 2023.

The Company has several defined benefit pension plans covering employees in the U.S. and certain employees in other countries. The plans provide retirement benefits based on years of service and compensation. The Company also sponsors or participates in several other non-U.S. pension and postretirement arrangements, including various retirement and termination benefit plans, some of which are required by local law or coordinated with government-sponsored plans, which are not significant in the aggregate and, therefore, are not included in the information presented below.

The Company’s net periodic pension and postretirement costs (income) for its material plans were as follows:

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
Service cost			$	0.5					$	0.9					$	1.4					$	2.9
Interest cost			5.3						2.6						15.9						7.8
Expected return on plan assets			(5.4)						(5.3)						(16.3)						(15.9)
Recognized net actuarial loss			0.4						1.5						1.2						4.6
Defined benefit settlement loss			—						—						7.2						—
Net periodic cost (income)			$	0.8					$	(0.3)					$	9.4					$	(0.6)

The service cost component of the net periodic cost (income) associated with the Company’s retirement plans is recorded to Cost of products sold and SG&A on the Condensed Consolidated Statement of Earnings and Comprehensive Income. The remaining net periodic cost (income) is recorded to Other (income) expense, net on the Condensed Consolidated Statement of Earnings and Comprehensive Income.

The Company initiated the wind-up of its Canadian defined benefit pension plan (“Canada Plan”) in June 2021. On September 1, 2021, Edgewell Personal Care Canada ULC (“EPC Canada”) as administrator of the Canada Plan entered into a buy-in annuity purchase agreement (“Buy-in Agreement”) with Brookfield Annuity Company (“Brookfield Annuity”) for certain members of the Canada Plan. On January 25, 2023, the Company received approval by the Financial Services Regulatory Authority of Ontario to wind-up the Canada Plan. Upon regulatory approval of the Canada Plan, EPC Canada proceeded with purchasing annuities for the remaining Canada Plan participants and converting the Buy-in Agreement to a buy-out annuity purchase agreement (“Buy-out Agreement”), which was purchased and funded by the Canada Plan on March 31, 2023. The Company was relieved of its defined benefit pension obligation through its irrevocable commitment under the Buy-out Agreement. As of the settlement date, the Company remeasured its assets and its projected benefit obligation associated with the Canada Plan. Upon settlement, the Company derecognized the assets, projected benefit obligation and losses remaining in accumulated other comprehensive loss (“AOCI”) associated with the Canada Plan, which resulted in a loss on settlement of $7.2. The loss was recorded in Other (income) expense, net on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the nine months ended June 30, 2023.

In January 2018, the Company’s Board of Directors (the “Board”) authorized the repurchase of up to 10.0 shares of the Company’s common stock, replacing the previous share repurchase authorization from May 2015. The Company repurchased 1.1 shares of its common stock for $45.2 during the nine months ended June 30, 2023. There are 5.4 shares of common stock available for repurchase in the future under the Board’s authorization as of June 30, 2023. Any future share repurchases may be made in the open market, privately negotiated transactions, or otherwise permitted, and in such amounts and at such times as the Company deems appropriate based upon prevailing market conditions, business needs, and other factors.

Dividends declared during the nine months ended June 30, 2023 totaled $23.9. Payments made for dividends during the nine months ended June 30, 2023 totaled $23.8.

The following table presents the changes in AOCI, net of tax, by component:

			Foreign Currency Translation Adjustments						Pension and Post-retirement Activity						Hedging Activity						Total
Balance as of October 1, 2022			$	(131.2)					$	(92.6)					$	7.7					$	(216.1)
Other comprehensive income (loss), net of tax			67.6						(2.3)						(1.5)						63.8
Reclassifications to earnings			—						6.2						(4.7)						1.5
Balance as of June 30, 2023			$	(63.6)					$	(88.7)					$	1.5					$	(150.8)

The following table presents the reclassifications out of AOCI:

						Three Months Ended June 30,												Nine Months Ended June 30,												Affected Line Item in the Condensed Consolidated Statements of Earnings
Details of AOCI Components						2023						2022						2023						2022
Gain / (Loss) on cash flow hedges
Foreign exchange contracts						$	1.0					$	3.4					$	6.8					$	6.3					Other (income) expense, net
Income tax expense (benefit)						0.3						1.1						2.1						2.1						Income tax provision
						0.7						2.3						4.7						4.2
Amortization of defined benefit pension and postretirement items
Actuarial losses (1)						$	(0.4)					$	(1.5)					$	(1.2)					$	(4.6)
Defined benefit settlement loss						—						—						(7.2)						—						Other (income) expense, net
Income tax expense (benefit)						(0.1)						(0.4)						(2.2)						(1.2)						Income tax provision
						(0.3)						(1.1)						(6.2)						(3.4)
Total reclassifications for the period						$	0.4					$	1.2					$	(1.5)					$	0.8

(1)These AOCI components are included in the computation of net periodic cost. See Note 11 of Notes to Condensed Consolidated Financial Statements.

In the ordinary course of business, the Company may enter into contractual arrangements (also referred to as derivatives) to reduce its exposure to foreign currency. The Company has master netting agreements with all of its counterparties that allow for the settlement of contracts in an asset position with contracts in a liability position in the event of default. The Company manages counterparty risk through the utilization of investment grade commercial banks, diversification of counterparties, and its counterparty netting arrangements. The section below outlines the types of derivatives in place as of June 30, 2023 and September 30, 2022, as well as the Company’s objectives and strategies for holding derivative instruments.

A significant share of the Company’s sales is tied to currencies other than the U.S. dollar, the Company’s reporting currency. As such, a weakening of currencies relative to the U.S. dollar can have an unfavorable impact on reported earnings. Conversely, strengthening of currencies relative to the U.S. dollar can improve reported results. The primary currencies to which the Company is exposed include the euro, the Japanese yen, the British pound, the Canadian dollar, and the Australian dollar.

Additionally, the Company’s foreign subsidiaries enter into internal and external transactions that create non-functional currency balance sheet positions at the foreign subsidiary level. These exposures are generally the result of intercompany purchases, intercompany loans and, to a lesser extent, external purchases, and are revalued in the foreign subsidiary’s local currency at the end of each month. Changes in the value of the non-functional currency balance sheet positions in relation to the foreign subsidiary’s local currency results in an exchange gain or loss recorded in Other (income) expense, net. The primary currency to which the Company’s foreign subsidiaries are exposed is the U.S. dollar.

As of June 30, 2023, the Company maintained a cash flow hedging program related to foreign currency risk. These derivative instruments have a high correlation to the underlying exposure being hedged and have been deemed highly effective by the Company for accounting purposes in offsetting the associated risk.

The Company has forward currency contracts to hedge cash flow uncertainty associated with currency fluctuations. These transactions are accounted for as cash flow hedges. The Company had unrealized pre-tax gains of $2.4 and $11.3 as of June 30, 2023 and September 30, 2022, respectively, on these forward currency contracts, which are accounted for as cash flow hedges and included in AOCI. Assuming foreign exchange rates versus the U.S. dollar remain at June 30, 2023 levels over the next 12 months, the majority of the pre-tax gain included in AOCI as of June 30, 2023 is expected to be included in Other (income) expense, net. Contract maturities for these hedges extend into fiscal 2025. As of June 30, 2023, there were 64 open foreign currency contracts with a total notional value of $107.6.

The Company has foreign currency derivative contracts, which are not designated as cash flow hedges for accounting purposes, to hedge balance sheet exposures. Any gains or losses on these contracts are expected to be offset by exchange gains or losses on the underlying exposures and, thus, are not expected to be subject to significant market risk. The change in the estimated fair value of the foreign currency contracts for the three and nine months ended June 30, 2023, resulted in a gains of $3.7 and $1.7, respectively, compared to a gain of $0.3 and $2.0 for the three and nine months ended June 30, 2022, respectively, and was recorded in Other (income) expense, net in the Condensed Consolidated Statements of Earnings and Comprehensive Income. As of June 30, 2023, there were five open foreign currency derivative contracts not designated as cash flow hedges with a total notional value of $34.6.

The following table provides estimated fair values of derivative instruments:

(1)Derivative assets are presented in Other current assets or Other assets. Derivative liabilities are presented in Other current liabilities or Other liabilities.

The following table provides the pre-tax amounts of gains and losses on derivative instruments:

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
Derivatives designated as cash flow hedging relationships:
Foreign currency contracts
Gain (loss) recognized in OCI (1)			$	3.7					$	7.8					$	(2.1)					$	12.7
Gain reclassified from AOCI into income (1) (2)			1.0						3.4						6.8						6.3
Derivatives not designated as cash flow hedging relationships:
Foreign currency contracts
Gain (loss) recognized in income (2)			$	3.7					$	0.3					$	1.7					$	2.0

(1)Each of these derivative instruments had a high correlation to the underlying exposure being hedged for the periods indicated and have been deemed highly effective by the Company in offsetting associated risk.

(2)Gain was recorded in Other (income) expense, net.

The following table provides financial assets and liabilities for balance sheet offsetting:

			As of June 30, 2023												As of September 30, 2022
			Assets (1)						Liabilities (2)						Assets (1)						Liabilities (2)
Foreign currency contracts
Gross amounts of recognized assets (liabilities)			$	5.5					$	(1.8)					$	13.4					$	(0.5)
Gross amounts offset in the balance sheet			—						0.2						—						0.4
Net amounts of assets (liabilities) presented in the balance sheet			$	5.5					$	(1.6)					$	13.4					$	(0.1)

(1)All derivative assets are presented in Other current assets or Other assets.

(2)All derivative liabilities are presented in Other current liabilities or Other liabilities.

Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

The following table sets forth the Company’s financial assets and liabilities, which are carried at fair value and measured on a recurring basis during the period, all of which are classified as Level 2 within the fair value hierarchy:

			June 30, 2023						September 30, 2022
Assets (Liabilities) at estimated fair value:
Deferred compensation liability			$	(19.3)					$	(21.8)
Derivatives - foreign currency contracts (liability) asset			3.9						13.3
Net liabilities at estimated fair value			$	(15.4)					$	(8.5)

The estimated fair value of the deferred compensation liability is determined based upon the quoted market prices of the investment options that are offered under the plan. As of June 30, 2023 and September 30, 2022, the estimated fair value of foreign currency contracts is the amount that the Company would receive or pay to terminate the contracts, considering first the quoted market prices of comparable agreements or, in the absence of quoted market prices, factors such as interest rates, currency exchange rates, and remaining maturities.

As of June 30, 2023 and September 30, 2022, the Company had no Level 1 financial assets or liabilities, other than pension plan assets, and no Level 3 financial assets or liabilities as of June 30, 2023 and September 30, 2022, respectively.

As of June 30, 2023 and September 30, 2022, the fair market value of fixed rate long-term debt was $1,010.1 and $945.9, respectively, compared to its carrying value of $1,250.0 in each period. The estimated fair value of the long-term debt was estimated using yields obtained from independent pricing sources for similar types of borrowing arrangements. The estimated fair value of long-term debt, excluding the the Revolving Credit Facility, has been determined based on Level 2 inputs.

Due to the nature of cash and cash equivalents and short-term borrowings, including notes payable, carrying amounts on the balance sheets approximate fair value. Additionally, the carrying amounts of the Revolving Credit Facility, which are classified as long-term debt on the balance sheet, approximate fair value due to the revolving nature of the balances.

For an overview of the Company’s segments, refer to Note 1 of the Notes to Condensed Consolidated Financial Statements. Segment performance is evaluated based on segment profit, excluding certain U.S. GAAP items that management does not believe are indicative of ongoing operating performance. These items include general corporate expenses, share-based compensation costs, amortization of intangible assets and certain other items, including restructuring and related costs, acquisition and integration costs, Sun Care reformulation costs, value-added tax settlement costs, loss on defined benefit settlement, income from resolution of legal matters, and at times management excludes other costs or income. Financial items, such as interest income and expense, are managed on a global basis at the corporate level and therefore are excluded from segment profit. The exclusion of such charges from segment results reflects management’s view on how management monitors and evaluates segment operating performance, generates future operating plans and makes strategic decisions regarding the allocation of capital.

The Company’s operating model includes some shared business functions across the segments, including product warehousing and distribution, transaction processing functions and, in most cases, combined sales force and management teams. The Company applies a fully allocated cost basis in which shared business functions are allocated between the segments.

Segment net sales and profitability are presented below:

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
Net Sales
Wet Shave			$	324.1					$	326.3					$	908.0					$	917.4
Sun and Skin Care			244.9						216.2						567.5						504.3
Feminine Care			81.0						81.3						242.0						213.1
Total net sales			$	650.0					$	623.8					$	1,717.5					$	1,634.8
Segment Profit
Wet Shave			$	32.1					$	37.5					$	102.6					$	116.6
Sun and Skin Care			61.1						46.6						114.1						92.6
Feminine Care			13.9						8.8						37.7						19.1
Total segment profit			107.1						92.9						254.4						228.3
General corporate and other expenses			(15.8)						(14.8)						(48.7)						(42.8)
Amortization of intangibles			(7.8)						(7.8)						(23.2)						(21.8)
Interest and other expense, net			(15.4)						(13.6)						(53.3)						(43.8)
Restructuring and related costs (1)			(3.1)						(3.9)						(8.9)						(9.8)
Acquisition and integration costs (2)			(1.0)						(0.9)						(5.1)						(8.0)
Sun Care reformulation costs (3)			(0.6)						(0.6)						(1.7)						(4.1)
Defined benefit settlement loss (4)			—						—						(7.2)						—
VAT settlement costs (5)			—						—						—						(3.4)
Legal matters, net income (expense) (6)			6.8						7.5						6.3						7.5
SKU rationalization charges (7)			—						(22.5)						—						(22.5)
Total earnings before income taxes			$	70.2					$	36.3					$	112.6					$	79.6

(1)Restructuring and related costs of nil and $0.2 are included within Cost of products sold for the three and nine months ended June 30, 2023, respectively. Includes pre-tax SG&A of $0.1 and $0.2 for the three and nine months ended June 30, 2023, respectively and $0.4 and $0.6 for the three and nine months ended June 30, 2022.

(2)Includes pre-tax SG&A of $0.9 and $7.2 for the three and nine months ended June 30, 2022, respectively, for the Acquisition. Additionally, includes Cost of products sold of $0.8 related to the valuation of acquired inventory for the Acquisition for the nine months ended June 30, 2022. See Note 2 of the Notes to Condensed Consolidated Financial Statements.

(3)Includes pre-tax R&D of $0.6 and $1.7 for the three and nine months ended June 30, 2023, respectively, and pre-tax R&D of $0.6 for both the three and nine months ended June 30, 2022. Additional, includes pre-tax Cost of products sold of $3.5 for the nine months ended June 30, 2022 related to the reformulation, recall and destruction of certain Sun Care products.

(4)Includes pre-tax loss of $7.2 for the nine months ended June 30, 2023 related the settlement of the Canada Plan. See Note 11 of the Notes to Condensed Consolidated Financial Statements.

(5)Includes pre-tax SG&A of $3.4 for the nine months ended June 30, 2022 related to the estimated settlement of a prior years’ value-added tax audit of the Company’s German subsidiary.

(6)Includes pre-tax SG&A of $7.1 for both the three and nine months ended June 30, 2023 and $7.5 for both the three and nine months ended June 30, 2022 for the favorable resolution of legal matters. See Note 16 of the Notes to Condensed Consolidated Financial Statements. Also includes other costs of $0.3 and $0.8 for the three and nine months ended June 30, 2023.

(7)Includes pre-tax COGS of $22.5 for the three and nine months ended June 30, 2022 for the write-off of certain Wet Ones SKUs and related contract termination charges. Wet one products are included within the Sun and Skin Care segment.

The following table presents the Company’s net sales by geographic area:

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
Net Sales to Customers
United States			$	391.6					$	392.8					$	1,031.3					$	997.2
International			258.4						231.0						686.2						637.6
Total net sales			$	650.0					$	623.8					$	1,717.5					$	1,634.8

Supplemental product information is presented below for net sales:

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
Razors and blades			$	291.2					$	290.1					$	816.6					$	821.1
Tampons, pads, and liners			81.0						81.3						242.0						213.1
Sun care products			184.2						162.4						385.8						334.0
Grooming products			38.2						33.9						123.5						114.6
Wipes and other skin care			22.5						19.9						58.2						55.7
Shaving gels and creams			32.9						36.2						91.4						96.3
Total net sales			$	650.0					$	623.8					$	1,717.5					$	1,634.8

During the three months ended June 30, 2023 the Company settled a legal matter which resulted in a gain of $4.9 related to an intellectual property claim against a third party. This was included in SG&A in the Condensed Consolidated Statements of Earnings and Comprehensive Income. The Company received payment for the intellectual property claim settlement during the three months ended June 30, 2023.

During the three months ended June 30, 2022 the Company settled certain legal matters which resulted in a gain of $7.5 related to intellectual property claims against a third party. This was included in SG&A in the Condensed Consolidated Statements of Earnings and Comprehensive Income. The Company received payment for the settlement subsequent to June 30, 2022.

The Company and its subsidiaries are subject to a number of legal proceedings in various jurisdictions arising out of its operations during the ordinary course of business. Many of these legal matters are in preliminary stages and involve complex issues of law and fact and may proceed for protracted periods of time. The amount of liability, if any, from these proceedings cannot be determined with certainty. The Company reviews its legal proceedings and claims, regulatory reviews and inspections and other legal proceedings on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies when the incurrence of a loss is probable and can be reasonably estimated and discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued if such disclosure is necessary for its financial statements to not be misleading. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company believes that its liability, if any, arising from such pending legal proceedings, asserted legal claims, and known potential legal claims which are likely to be asserted, is not reasonably likely to be material to its financial position, results of operations or cash flows, when taking into account established accruals for estimated liabilities.

(Amounts in millions, except per share data, unaudited)

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the accompanying notes included in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K filed with the SEC on November 16, 2022 (the “2022 Annual Report”). The following discussion may contain forward-looking statements that reflect our plans, estimates, and beliefs and involve risks, uncertainties, and assumptions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed within “Forward-Looking Statements” below and in Item 1A. Risk Factors and “Forward-Looking Statements” included within our 2022 Annual Report.

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of Edgewell Personal Care Company or any of our businesses (the “Company”). Forward-looking statements generally can be identified by the use of words or phrases such as “believe,” “expect,” “expectation,” “anticipate,” “may,” “could,” “intend,” “estimate,” “plan,” “target,” “predict,” “likely,” “will,” “should,” “forecast,” “outlook,” “strategy,” or other similar words or phrases. These statements are not based on historical facts, but instead reflect our expectations, estimates or projections concerning future results or events, including, without limitation, the future earnings and performance of the Company or any of our businesses. Many factors outside our control could affect the realization of these estimates. These statements are not guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause our actual results to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or projections will be achieved. The forward-looking statements included in this report are only made as of the date of this report, and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. You should not place undue reliance on these statements.

In addition, other risks and uncertainties not presently known to us or that we presently consider immaterial could significantly affect the forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Risks and uncertainties include those detailed from time to time in our publicly filed documents, including in Item 1A. Risk Factors of Part I of our 2022 Annual Report.

While we report financial results in accordance with GAAP, this discussion also includes non-GAAP measures. These non-GAAP measures are referred to as “adjusted” or “organic” and exclude items such as restructuring and related costs, acquisition and integration costs, Sun Care reformulation costs, value-added tax (“VAT”) settlement costs, loss on defined benefit settlement, income from resolution of legal matters, and other costs or income. Reconciliations of non-GAAP measures are included within this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. We use this non-GAAP information internally to make operating decisions and believe it is helpful to investors because it allows more meaningful period-to-period comparisons of ongoing operating results. Given certain significant events, including the acquisition of Billie, Inc. (“Billie”) (the “Acquisition”) on November 29, 2021, we view the use of non-GAAP measures that take into account the impact of these unique events as particularly valuable in understanding our underlying operational results and providing insights into future performance. The information can also be used to perform trend analysis and to better identify operating trends that may otherwise be masked or distorted by the types of items that are excluded. This non-GAAP information is also a component in determining management’s incentive compensation. Finally, we believe this information provides more transparency.

The following provides additional detail on our non-GAAP measures for the periods presented:

•We analyze net sales and segment profit on an organic basis to better measure the comparability of results between periods. Organic net sales and organic segment profit exclude the impact of changes in foreign currency translation and the impact of acquisitions.

◦Organic net sales was unfavorably impacted in October and November of fiscal 2023 by the Billie acquisition as sales that were previously reported as third party sales to Billie are now included as inter-company sales.

◦Segment profit will be impacted by fluctuations in translation and transactional foreign currency. The impact of currency was applied to segments using management’s best estimate.

•Additionally, we utilize “adjusted” non-GAAP measures including adjusted gross profit, adjusted selling general and administrative (“SG&A”), adjusted operating income, adjusted income taxes, adjusted net earnings, and adjusted diluted earnings per share internally to make operating decisions. The following items are excluded when analyzing non-GAAP measures: restructuring and related costs, acquisition and integration costs, Sun Care reformulation costs, VAT settlement costs, loss on defined benefit settlement, stock keeping unit (“SKU”) rationalization charges, income from resolution of legal matters and at times management excludes other costs and income.

All comparisons are with the same period in the prior year, unless otherwise noted.

Unless we indicate otherwise, we base the information contained or incorporated by reference herein, concerning our industry on our general knowledge and expectations. Our market position, market share, and industry market size are estimates based on internal and external data from various industry analyses, our internal research and adjustments, and assumptions that we believe to be reasonable. We have not independently verified data from industry analyses and cannot guarantee its accuracy or completeness. In addition, we believe that industry, market size, market position and market share data within our industry provides general guidance but is inherently imprecise and has not been verified by any independent source. Further, our estimates and assumptions involve risks and uncertainties and are subject to change based on various factors, including those discussed in Item 1A. Risk Factors in Part I of our 2022 Annual Report. These and other factors could cause results to differ materially from those expressed in the estimates and assumptions. You are cautioned not to place undue reliance on this data.

Retail sales for purposes of market size, market position and market share information are based on retail sales in U.S. dollars.

We own or have rights to use trademarks and trade names that we use in conjunction with the operation of our business, which appear throughout this Quarterly Report on Form 10-Q. We may also refer to brand names, trademarks, service marks and trade names of other companies and organizations, which are the property of their respective owners.

Throughout the novel coronavirus 2019 (“COVID-19”) pandemic, we have taken and continue to take significant measures to protect our employees and businesses, while remaining in compliance with local, state and national guidelines.

To date, we have not experienced any material operational disruptions across our manufacturing or distribution facilities. However, due to the uncertainty resulting from COVID-19, the impact and timing of additional unforeseen disruptions cannot be reasonably estimated at this time.

We will continue to monitor for any future material developments regarding COVD-19, if any, and related responses of local, state and national governments and our consumers, suppliers and employees.

On November 29, 2021, we completed the acquisition of Billie, a leading U.S. based consumer brand company that offers a broad portfolio of personal care products for women, for a purchase price of $309.4, net of cash acquired, utilizing a combination of cash on hand and by drawing on that certain U.S. revolving credit facility due 2025 between the Company and Bank of America, N.A., as administrative agent, and lenders parties thereto (the “Revolving Credit Facility”). As a result, Billie became a wholly owned subsidiary of the Company. Refer to Note 2 of Notes to Condensed Consolidated Financial Statements for further discussion.

The following is a summary of key results for the third quarter and first nine months of fiscal 2023, as compared to the corresponding periods in fiscal 2022. In addition to net sales, net earnings and earnings per share (“EPS”) for the periods presented were also impacted by restructuring and related costs, acquisition and integration costs, Sun Care reformulation costs, VAT settlement costs, loss on defined benefit settlement, income from resolution of legal matters and other costs or income, as described in the table below. The impact of these items on reported net earnings and EPS are provided as a reconciliation of net earnings and EPS to adjusted net earnings and adjusted diluted EPS, both of which are non-GAAP measures.

•Net sales in the third quarter of fiscal 2023 increased $26.2, or 4.2%, as compared to the prior year quarter to $650.0 as international markets increased $22.8, or 11.0%, and North America markets increased $3.4, or 0.8%. Organic net sales increased $27.9, or 4.5%, compared to the prior year quarter, as international markets increased 8.7%, driven by strong Wet Shave, Sun Care and Grooming performance and North America markets increased 2.3% driven by Sun Care and Grooming growth. In aggregate, growth in organic net sales was driven largely by increased pricing.

•Net earnings in the third quarter of fiscal 2023 were $52.5 compared to $30.5 in the prior year quarter. On an adjusted basis, net earnings for the third quarter of fiscal 2023 were $50.8 compared to $45.8 in the prior year quarter. Adjusted net earnings increased primarily due to higher sales and improved gross profit.

•Net earnings per diluted share during the third quarter of fiscal 2023 were $1.01 compared to $0.57 in the prior year quarter. On an adjusted basis, net earnings per diluted share during the third quarter of fiscal 2023 were $0.98 compared to $0.86 in the prior year quarter.