Edgewell Personal Care Company

Good morning and welcome to Edgewell's first quarter fiscal year 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your questions, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Goff, Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us this morning for Edgewell's first quarter fiscal year 2022 earnings call. With me this morning are Rod Little, our President and Chief Executive Officer, and Dan Sullivan, our Chief Financial Officer. Rod will kick off the call, then hand it over to Dan to discuss our results. and full year 22 outlook before we transition to Q&A. This call is being recorded and will be available for replay via our website, www.edgewell.com. During the call, we may make statements about our expectations for future plans and performance. This might include future sales, earnings, advertising and promotional spending, product launches, savings and costs related to restructuring, changes to our working capital metrics, currency fluctuations, commodity costs, category value future plans for return of capital to shareholders, and more. Any such statements are forward-looking statements which reflect our current views with respect to future events. These statements are based on assumptions and are subject to various risks and uncertainties, including those described under the caption risk factors in our annual report on Form 10-K for the year ended September 30th, 2021, as may be amended in our quarterly reports on Form 10-Q. These risks may cause our actual results to be materially different from those expressed or implied by our forward-looking statements. We do not assume any obligation to update or revise any of these forward-looking statements to reflect new events or circumstances, except as required by law. During this call, we will refer to certain non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is shown in our press release issued earlier today, which is available at the investor relations section of our website. Management believes these non-GAAP measures provide investors with valuable information on the underlying trends of our business. With that, I would like to turn the call over to Rod.

Thanks, Chris. Good morning, everyone. And thank you for joining us on our first quarter earnings call. As you saw in the results we posted earlier today, the improving underlying consumer demand that we witnessed in many of our categories as we exited fiscal 2021 continued in the first quarter. As the category strengthened, so too did our market share results. In the quarter, we grew organic net sales 2.5%, with growth coming from all three segments of the business, led by sun care, women's shave, feminine care, and men's grooming. Importantly, our organic growth was driven by both volume and price gains in the quarter. We also had growth across all geographic regions, and importantly, started to see the first signs of recovery in important markets in Asia and Latin America. Our aggregate market share in North America increased in the quarter, led by sun care, wet ones, and disposable razors. In international markets, we were pleased to see continued share gains in Japan and in most Latin American markets. In addition to our strong top-line performance, we also executed well on the bottom line, delivering 42 cents of adjusted earnings per share and 69.7 million of adjusted EBITDA in the quarter. despite significant cost headwinds resulting from increased inflationary pressure across many commodities, freight, and distribution costs, as well as increasing COVID-19-related impacts on our labor force. These challenges impacted our ability to meet elevated demand in the quarter, particularly in women's branded shave, shave preps, and feminine care. Our organization is working relentlessly to mitigate the impacts of higher costs and supply constraints on the business while remaining focused on executing against our strategic priorities. Dan will take you through more details on the supply chain environment and the impact on our business in a moment. I'm also pleased with how our team designed and now is executing our price increases, thoughtfully balancing a strategy of price leadership with fast followership reflective of category, brand, and market. And we will continue to explore further opportunities as inflationary pressures remain at all-time high levels. Let me now pivot to the progress we're making on some of our key strategic priorities, including the investment in our people and brands in support of our goal to deliver sustained top-line growth. Our performance this quarter is again a testament to our team members who have executed with excellence in an increasingly challenging environment. As you've heard me say before, we've built a people-first culture, and we continue to prioritize the safety and well-being of all of our teammates. The protocols we initiated nearly two years ago have been refined and augmented as the pandemic has evolved, ensuring a safe and effective work environment across all of our offices, manufacturing, and distribution facilities. We've made the COVID-19 vaccine readily available to all employees through vaccine clinics, some of which have been onsite, and offered paid time off for employees to get vaccinated. Conscious of the impact the pandemic has had on our employees, we've implemented several initiatives to date in support of their mental health and wellbeing. And finally, in 2021, we also rewarded our teammates for their dedication and contributions to our success during the pandemic with multiple cash bonuses awarded to our frontline workers, and a one-time cash award for all hourly and salaried corporate individuals who previously were not bonus eligible. At Edgewell, we value our teammates and remain committed to our people-first objective. In addition to the investments in our team members, we also made meaningful investments in our brands and in key markets, which contributed to strong sales and share growth in the quarter in two important areas of the business. the SunCare segment, and the Japan market. In SunCare, we have already secured meaningful new club channel distribution and compelling shelf gains in mass, both in aisle and secondary displays. And we're encouraged by the pace of recovery we're seeing in several international markets. These strong distribution gains are a direct outcome of consecutive seasons of share gains in the United States. And when combined with our expertise in procurement and formulation, position us well for the critical sun season ahead. And in Japan, our second largest country based on sales, the investments we've made in the men's hydro relaunch drove increased shelf presence and share gains. The men's hydro relaunch in Japan is just one example of the innovation we're bringing to consumers this year. In North America, a rebranded Schick portfolio will be on shelf later this month, reinforcing both the authentic and emotional connection between the brand and our consumers and the unparalleled functional product benefits we provide as part of men's daily shave regimen. In Suncare, Banana Boat is targeting the unmet needs in our core sport and kids franchises with sport and kids roll-on SPF 60 and new 100% mineral sea spray. While Hawaiian Traffic is launching a unique mineral powder brush made with 100% mineral actives that mattifies while protecting your skin in a convenient brush format. And in men's grooming, we're combining the inherent equity and credibility of the Cremo brand with the unmatched blade technology of Edgewell to launch a new premium razor to compete in the more premium end of the category. These are just a few examples of the commitment we have made to increasing our capabilities in the areas of brand building and consumer-centric innovation. And I'm personally excited about the progress we are making. And finally, in addition to the organic investments we're making, we completed our acquisition of Billy in the quarter, adding the fast-growing, digitally native, leading DTC brand to our strong and differentiated portfolio of women's shaving brands, including Intuition, Shek Hydro Silk, and Skintimate. And the timing couldn't be better, as Billy has just begun its national retail launch exclusively in Walmart. By the end of February, Billy's shave essentials, including the starter kit, travel case, blade refills, and a new whip shave cream, will be in over 4,000 Walmart stores and fully supported by in-aisle and in-cap signage and display. Edgewell is now playing the role of disruptor to the category at retail, combining a uniquely strong brand with expertise in distribution and retail execution. So in summary, we are seeing a healthier demand environment across many of our categories, particularly in the United States. And we are encouraged by the recovery beginning in other regions of the world. Second, with improving demand environment, we remain committed to investing in our brands and executing on our strategic priorities. Third, our teams remain focused and agile, even as the operating environment becomes increasingly challenging. As we continue to see heightened cost pressures across many commodity categories, as well as higher wages and transportation costs, our teams will continue to focus on service while executing our productivity and efficiency efforts to help mitigate some of these cost headwinds while ensuring our product remains available for our customers. Fourth, we are executing our price increases well while continuing to evaluate further price measures in certain markets. And finally, as evidenced by our dividend and share buyback execution, we remain committed to a balanced and disciplined approach to capital allocation and returning value to shareholders. And now I'd like to ask Dan to take you through our first quarter results and also provide details on our outlook for fiscal 2022.