12. Yeah, I know. I'm in this room till like 1:00 P.M. Luckily, today they're all in the morning. Tomorrow, they're all in the afternoon. I would choose more. They try and group them together, so you just sit here. Yeah. It's ready? Yes. Okay. Good morning, everyone. Thank you, everyone, for attending the conference. I'm Susan Anderson, one of Canaccor 's analysts in the consumer space. We're very excited to have here with us Edgewell Personal Care, and in particular the COO, Dan Sullivan, and CFO, Fran Weissman. Dan, I'd like to start off with a broader question before we get into the more specific questions. Edgewell has been in kind of a transformation mode, and I'd like to understand where you are in that transformation. What are the areas of the business that you believe are strengths, and what areas do you think remain to kind of work on a little bit? Yeah, good question. Good morning, Susan. Nice to be here. We are in transformation mode, and we're doing it in a very unfriendly environment, right? If you think about COVID and inflation and U.S. dollar strength, now tariffs, it's a challenge. Having said that, we're pretty excited about where we are as a business. The strengths that I would point to, and I think there's three or four of them that are noteworthy. One is our international business. It's about 40% of our revenue profile. It has grown 6%-7% the last four years. CAGR, it'll grow about 4%-5% this year. Durable growth, market-leading brand, super talented team. That's one. Following that, we've taken great steps in the last two years to completely replatform our innovation structure and architecture and pushed all of innovation locally. You're actually seeing that much more in our international markets, not yet in the U.S. Even in the last 18 months, we've successfully launched Hawaiian Tropic into a sun-skin place in Mexico under a brand called Hawaiian Tropic Beauty. We are the number one grooming brand in the U.K. with Bulldog, and we've launched that into an advanced premium-priced skin space. We've just launched a brand in Japan called Progista, which is going to play in the men's grooming. We're much better at innovation than we have been. Third thing I would point to is productivity savings. Fran will talk more about that. It is in our DNA. We're good at it. We've taken out 250 basis points- 300 basis points a year, going back the last four or five years, and that's a really good proxy for the future as well. The last thing is the business throws off a ton of cash flow. On average, it'll be $150 million- $180 million in free cash flow. Those are the positives. What are we working on? What's left in the transformation? It's all about the U.S. We've taken some pretty dramatic steps in the last nine months. We hired a new President of North America. We've done a full strategic review of the portfolio, and we've just completed a reorganization of our commercial business. Six new leaders running our businesses, our sales organizations, and data and analytics. Starting to see proof points there, had a really encouraging quarter from a share shelf perspective, but that work remains. Great. A few years ago, maybe you talked about top-line growth over the long term of 2-3%. Maybe if you can talk about if you think that that's still achievable, and is it going to be higher in the international markets than what you're seeing here in the U.S., just given the competitive environment? Fran, maybe if you could touch on those productivity savings as well. Yeah, so we put an algorithm out now five years ago, 2-3% growth at the top, 6-7% growth at the bottom. I think 2-3% is a reasonable proxy for top-line growth. If you just think about 40% of our business growing 4-5%, that's international, you're essentially in the zone already for the algorithm. Then you say, okay, what comes out of the U.S. here with all of the work that I just described? I think how we get there is probably a bit different than maybe what we imagined four or five years ago. We didn't own the Billie brand back then. We were expecting significant tailwinds from the Wet Ones brand. Remember, it was COVID, right? All you're thinking about is personal hygiene and safety. I think now you see a much stronger shave business, particularly internationally. You've got to weather tough days in sun care, as we'll talk about. It was a tough season for us. Over the long term, I think we're very confident 2-3% is the right top-line profile. Yeah, I think on productivity efforts, and Dan alluded to this earlier on, we've been on a journey for the last four plus years and have demonstrated the capabilities to really take cost out of the system. Well over 250 basis points of gross savings, and I think that has been part of our DNA and now part of how we operate. We've also been building on commercial capabilities. Our SRGM efforts have really been significant, and I think more notably in international, where that's been a real catalyst for their operating margin expansion in the recent couple of years. Okay, great. Maybe now just transitioning to the current year, the third quarter was a bit challenging, as you mentioned, the sun season was weak, which was well televised. I guess beneath that, maybe if you could talk about the puts and takes and the positives of the rest of the business during the quarter, and then how should we think about just the Q3 results and then looking out to the fourth quarter as well? Yeah, it's a tough quarter in our business when your sun season is negative, which ours was. Almost a third of our business in the quarter we just exited is sun care. When you have a down quarter in the U.S., consumption, not just us, but the category, that's going to weigh heavily on our business, and it did. I think you all probably recognize what the weather was like pre-Memorial Day till 4th of July. Huge, huge headwind. That's a reality of a seasonal business like ours. That tough weather was not limited to the U.S. Important markets like Puerto Rico, Mexico, Caribbean Islands, where we also have sizable sun care businesses, also suffered. If I put that to the side, I'd point to three things that were encouraging about the quarter, and we see this carrying into the fourth. One, Fran alluded to productivity savings. We had our biggest productivity savings quarter of the year. I think it was 280 basis points, plus or minus. We stayed disciplined and executed really well. Two, we had our strongest market share quarter in international since I've been responsible for that business. 80% of our business internationally held or gained share. If I ticked around the markets, I would talk about some really impressive share gains in areas where we've been focused. Thirdly, we didn't let the sun care season and the tariff noise take us off of our investment stands in the U.S., and we're starting to see some real benefit from that. We performed extremely well with Hawaiian Tropic. We performed extremely well with Cremo. Within our legacy shave business, Hydro Silk had its best quarter on shelf in two years. All three of those brands were a focus for us in terms of investment. Not a great print for us, but I think doing the right things for the business, particularly in the U.S. As we look to the fourth quarter, we see an inflection point. We are calling for organic growth in the quarter, about 2%-2.5%. That has about an 8% growth profile in international, which we have a really high confidence for and good line of sight to. North America will still be down, but it'll sequentially improve significantly. We're looking at gross margin profile. It's flat in constant currency, and an EBITDA profile that's up 2-3 points constant currency. I think Q4, as you cycle out of a really big sun season and bad weather, as some of the investments we're making now gain traction and we perform better on shelf, which we are, I think Q4 is a bit of an inflection moment for the business, then it sets us up really well for 2026. Okay, great. Maybe if you could talk about just how you see the health of the consumer versus last year and heading into the back half in 2026. You talked about the U.S. and North America being a little weaker than international, looking into the fourth quarter. Is that consumer-driven or is that more retail-driven? Have you seen any trade down to private label as consumers maybe feel a little bit more pinched? Yeah, if we take sun care out, that's highly weather-dependent. The categories in which we compete are actually still very structurally strong, growing 3%-4%. No signs yet of consumer hesitancy, no signs of trade down. These are everyday use categories, so you would expect some level of insulation to consumer sentiment. We also are the only shave business that competes in all three dimensions of the category: branded, disposable, and private label. We have a pretty good look if consumers or retailers are starting to shift emphasis here to the point of trade down. We're not seeing that at all. What's going to come next, though, I think is an open question. You all probably have as strong a view. We don't know. Labor market looks like it's wobbling a bit. Certainly, the tariffs are going to put pressure on the consumer. I don't anticipate meaningful challenges in our categories. Sun care is a bit dependent on travel, but otherwise not as much. I think it's hard to predict from here where the consumer will be, but so far we're not seeing any signs of struggle. Okay, great. Fran, maybe moving on to the gross margin, you saw expansion last year, giving some of that back a little bit this year. Maybe if you could talk about the levers there and do you expect to get back to gross margin expansion and what's going to drive that? Yeah, so if we look at gross margin overall, it has historically been our strength. We've got good gross margin profile across all our categories. As we've talked about, productivity and efficiency is really core to how we operate, and we've been building on commercial capabilities with SRGM. 2025 has been definitely more headwinds when we think about tariffs, currency, and even negative mixed headwinds. Despite all that, we've been able to grow about 30 basis points in constant currency, still demonstrating the strength of our productivity initiatives. When you think about the levers, I think we've got the right levers overall to continue to grow our gross margin over the longer term. While 2025 is transitory in terms of some of these pressures, we believe we're still on that journey and focus to expand gross margin. Okay, great. Just looking at the tariff impact, which has been a huge investor focus, and it's been on everyone's minds for a long time now, it feels like. Maybe if you could talk about the impact on your business and how you see that playing out over the next 12 months and if you expect to take any pricing as a result? I'll talk about tariff conceptually. I'll ask Fran to size it. For us, what we've said publicly is the exposure that we have to tariffs on an annual basis is $40 million-$50 million, 3%-4% of COGS. That's our best estimate. That is, of course, subject to a tariff policy that's changing by the minute. You all would have seen the extension on China overnight. There's a lot happening here, and that uncertainty is challenging. Having said that, Fran talked about our productivity muscles. We have an extremely capable supply chain global procurement organization. They are running fast. They have already lined up a significant number of initiatives, some of which have already been executed. That's around global sourcing. That's around altering physical flow of product. We largely manufacture where we sell. From that standpoint, we're in decent shape, but we are going hard at every cost item that we can. We will not offset $40 million-$50 million purely through cost, which means commercial pricing is going to have to play a role. We have already started to initiate pricing in our international markets. That has gone in this quarter, and there'll be more to come. In many international markets, we are market leader. Therefore, we have price leadership positions. Therefore, we will lead the market. In the U.S., a bit more complicated because we are, other than Sun Care, not the market leader in the categories in which we compete. We are preparing to fast follow. We're certainly encouraged by what we've heard recently from market leader that there will be some pricing taken in the U.S., and then we would look to capitalize on that. I'm not going to quantify how much of it can we or won't we or will we offset. That work's still going, but I would want to stress, as an organization, we have a very, very strong point of view. We're not in the business to lose margin dollars to tariffs. We are going to have to offset that. We'd like to do it all through cost. That's the first place we're going, but commercial pricing will also have to play a role. Okay, great. Fran, maybe turning to free cash flow. As Dan mentioned earlier, you guys generate very strong free cash flow, which is a nice outlier. How are you thinking about those drivers and free cash flow as we look forward? Yeah, so free cash flow has definitely been a key strength for us. A lot of that is underpinned by the fact that we've got a fairly low CapEx profile, probably on average 3% of net sales, and we have really strong profit conversion, which we've talked a lot about productivity and how that's helped our overall earnings profile. When we look at the levers as far as free cash flow is concerned and really the headwinds that we've experienced in 2025, we've historically delivered somewhere between $150 million- $200 million. Even at the height of COVID, we delivered $200 million. In 2025, we've taken a step back. We're roughly estimated to deliver around $80 million, and that's really driven off of transitory headwinds. The impact of currencies, the impact of tariffs, and also a weaker sun season has definitely added pressure to our cash. I think what's important to note is that we've also been intentional with some of the working capital increases. We talked about tariff mitigation. Inventory pre-buy was part of that, and that definitely increased our inventory levels in 2025. We've also talked about our Mexican plant consolidation, which we've intentionally increased inventory levels to really protect us around service and making sure that that's a priority. Those were clearly the right things to do for the business, but they came with trade-offs. If we look over the longer term, we still believe our long-term cash profile is still within that range. It's just 2025 is more reflective of a transitory period. Okay, great. Just looking out longer term at that free cash flow and the opportunity you have with it, how do you think about capital allocation, whether it's through dividends, share repurchases, paying down debt, or even M&A? Yeah, so I think our free cash flow has really provided us a great level of optionality, and our focus has been to really put it in areas where you've mentioned that has worked for the greatest return. Over the last 18 months, our focus has really been on debt paydown, and we've also taken advantage of what we believe is an undervalued stock price. That's been generating some of our share repurchase. I think moving forward, we'll clearly look at those areas. Given the fact that our debt leverage goal is to be around 3x, and we're at this point higher than that, I would expect, not making a projection, that we would likely favor debt paydown in the near term. Okay, great. Dan, maybe turning over to the segments now, we'll start with the Sun Care season, which has been the hot topic. Hawaiian Tropic, as you said, performed very well. It's been a hot brand, I think, in the segment. You had Banana Boat, which struggled a little bit more this season. Maybe if you could talk about the differences between the two brands and how you're thinking about the rest of the sun season and looking into 2026 as well. Yeah, so we have two core brands in the portfolio: Hawaiian Tropic and Banana Boat. I'll take them sort of in reverse order. Banana Boat is that family brand, heavy towards moms and kids, plays in a space around outdoor activity, fun in the sun, protection while you are in the backyard, at the beach, on a walk, on a hike. It is going to be highly, highly impacted in bad weather for those exact reasons, and that's what we saw. It is the staple of the portfolio. It's a brand that consumers trust and love, and we think with good weather will continue to grow and gain share as it has. Hawaiian Tropic is a different brand. Hawaiian Tropic plays more in skin, sun, beauty. Its consumer is different. It is largely female. It is largely younger. The offering within the brand plays sort of tanning to sun protection to post-sun treatment. We had a belief coming into this sun season that Hawaiian Tropic had a significant opportunity. We've put a ton of work and effort into repackaging the brand. We brought some interesting new formulations to market. This year, we not only invested incrementally, but we communicated with the consumer in a much different way. Alix Earle was brought on board as our lead spokesperson. If you know who she is and her 5 million followers, we could not ask for a better ambassador for the brand. She's been terrific. She's really brought the essence of the brand, again, back to that beauty, skin, and protection space. She's brought that in a great way. Not surprisingly, the brand has done really well. Amongst a category that has declined, Hawaiian Tropic was the fastest growing brand in the top 10 set, and it grew 150 basis points in the quarter. We love how it's being activated. Retailers are responding, by the way, with incremental shelf space and better locations. We're quite encouraged. The season's not over. 50% of the U.S. consumption happened in the quarter we left, but 30% of the season is still to be had. We're seeing great results here coming out of July. The category was up 8%. Hawaiian Tropic again gained share. Not the best season, Memorial Day to 4th of July, but a lot of work left to do, and the brand's performing really well. Okay, great. Maybe turning over to wet shave. In the U.S., we seem to be a little bit more aware of what's going on with the category, but internationally, not as much. Maybe if you could talk first about the international business, how sizable it is, and how it's been performing. Yeah, so shave is roughly 55% of our total business, and international is roughly 55% of the shave business. Said another way, our shave business outside the U.S. is bigger than inside the U.S. We are market leader in Japan. We have north of a 60% share, men's and women's. We are a sizable and formidable number two across all European markets as a branded business. As I said earlier, we have a really interesting complement of private brands, disposables, and branded businesses. We are quite bullish on the shave category. We have unique IP. Only one other folk in the U.S. can do what we do, which is manufacture high-quality, durable blades consistently, and that's Gillette. That's it. It's two of us. Our opportunity now in the U.S. is to bring the portfolio along with the investments I talked about earlier, which we are making in the women's shave category, and we're seeing really, really impressive results. Let me give you an example. The Billie brand, which we bought three years ago, has been the market leader, has been the disruptor, and has risen to 12%-13% share of category. Some of that share growth has come at the expense of our own portfolio. We have stopped that now. We have invested in Hydro Silk. We've repackaged the brand completely. We have incrementally invested both top and bottom of funnel. In the quarter we just exited, we took a - 1% share profile for the brand and got it to flat. In the last four weeks, we've actually gained share with Hydro Silk. What we don't want to have happen is Billie is growing at the expense of our legacy. We are now seeing pure share gains across our women's portfolio, which is what the thesis was when we bought the Billie brand. We've got great brands, bigger outside the U.S., but formidable here in the U.S. with a leading portfolio of women's brands, which is our focus and our emphasis. Okay, great. Maybe if you could talk a little bit about just the competitive environment in the U.S. last year, it seemed to be fairly competitive, particularly on the women's side. A lot of new brands have jumped into that space. Maybe if you could just talk about if that's changed at all as we head into the back half of this year. I think we're through the days of massive, massive disruption on shelf, right? The DTC players, and you kind of know who they are, coming in and disrupting on shelf in brick and mortar. I think that has largely passed. We, in fact, own the biggest and most successful of those, which is Billie. There are brands out there that are coming to shelf. Athena Club is a brand you may know. It has come into the women's set. We know that brand really well because we manufacture for them. Here again is an advantage where we are participating in a value chain, even though it is obviously with a competitor. What we are seeing is heightened competition and prolonged promotion. A market leader has been extremely active in both breadth and depth of promotion. We had expected that that might sort of curtail. It has not. We have had to stay at a fairly heightened level of promotion as well. That likely stays through the summer. As the category softens a bit for seasonality, we expect that will come off. Still a very competitive category, but we love our portfolio and the diversity of our portfolio. Okay, great. Maybe if you could just quickly touch on your grooming business so everyone knows about the products and the audience and how that's performed in the U.S. and internationally. Then we have one last question. Yeah, the grooming portfolio is a great example of our strategy that we put in place now three years ago, almost four years ago, where we wanted to diversify ourselves outside of a pure shave and sun business. We did it through acquisition. We acquired brands like Jack Black and Bulldog, and most recently Cremo. We've gone from no business to roughly 10% of our business sitting within this grooming space, growing at 10% and growing both internationally and here in the U.S. I talked about Bulldog earlier, number two brand in the UK that we are bringing innovation and product line expansion to. Last quarter, the Cremo brand grew almost 40% at retail, and that brand has doubled since the time that we acquired it. We think this is a super interesting part of the portfolio, a lot more left to do with the brands that we have and living up to our strategy of diversification through M&A. Okay, great. We've covered a lot here, Dan, but you've been CFO for a while and now COO. If you could just talk about what gets you most excited about Edgewell as we look forward and why everyone here in the audience should get on board. Yeah, look, we've done a lot of work to transform this business. We've taken steps forward, and admittedly, at times, we've taken steps back. Having said that, I think if you go back to what is the investment thesis, growing international business that is durable, productivity savings at the core of how we operate, which are more important than ever, not less, strong cash flow profile that Fran talked about, and taking all the right steps in North America now to build that business back up to sustainable growth. It is all right there in front of us. The talent and capabilities of the organization are vastly different than even a year ago, and I think our best days lie ahead of us. Great. Thank you so much, Dan. Thank you. Thank you.