Financial Data and Key Metrics Changes - Q3 revenue was $283 million, slightly better than forecast but down 2.4% from $290.3 million in the prior year, primarily due to lower eye and ear care category sales [5][12] - Adjusted EPS was $1.14, down from $1.22 in the prior year, reflecting lower sales and increased G&A costs [7][12] - Free cash flow for the year to date was $209 million, up 13% versus the prior year, allowing for stock repurchases and acquisitions [7][18] Business Line Data and Key Metrics Changes - Sales declines were largely due to anticipated Clear Eyes supply chain constraints, with North America segment revenues down 4.4% and international segment revenues down 90 basis points [14][16] - E-commerce channels showed strong growth, offsetting declines in other categories like analgesics and cough and colds [14][15] Market Data and Key Metrics Changes - The company continues to see consumption growth in e-commerce, with over 10% growth in Q3 [35] - The eye care category is expected to improve sequentially, driven by an aging population and strategic actions taken to enhance supply [8][10] Company Strategy and Development Direction - The company is focused on a disciplined capital allocation strategy, including share repurchases and potential M&A opportunities to enhance its portfolio [19][20] - The acquisition of Pillar Five is expected to improve supply chain control and production capabilities for eye care products [9][10] Management's Comments on Operating Environment and Future Outlook - Management noted heightened business environment uncertainty due to supply chain constraints, high inflation, and geopolitical events [4] - The company has narrowed its sales outlook for fiscal 2026 to approximately $1.1 billion, reflecting consumption momentum in growth channels but slower order patterns in others [21] Other Important Information - The company anticipates a full-year G&A of just over 10% as a percent of sales, with adjusted diluted EPS expected to be approximately $4.54 for the year [17][21] - The company has maintained a strong financial position with a net debt of approximately $1 billion and a leverage ratio of 2.6x [18] Q&A Session Summary Question: Are you seeing consumption shift to other retailers? - Management confirmed a continuation of channel shifts, with consumption picking up based on where consumers purchase products [24] Question: When do you expect the headwinds to go away? - Management indicated it is difficult to predict, but they are well-positioned to manage through the volatility [26] Question: What is the status of the eye care supply? - Management noted that restocking will take time, but they expect sequential improvement in supply [33] Question: How is the e-commerce penetration performing? - E-commerce consumption grew over 10% in Q3, with management noting the importance of adapting marketing strategies to connect with consumers [35] Question: What is the outlook for the women's health business? - Management reported that Monistat is performing well, while Summer's Eve is positioned for long-term growth despite some volatility [39] Question: What is the capital allocation strategy moving forward? - Management emphasized that investing in brands is the top priority, with share repurchases being a secondary focus based on market conditions [44]

Financial Data and Key Metrics Changes - Q3 revenue was $283 million, slightly better than forecast but down 2.4% from $290.3 million in the prior year, primarily due to lower eye and ear care category sales [5][12] - Adjusted EPS was $1.14, down from $1.22 in the prior year, reflecting lower sales and increased costs [7][12] - Free cash flow was $209 million year to date, up 13% versus the prior year, allowing for stock repurchases and acquisitions [7][18] Business Line Data and Key Metrics Changes - Sales declines were largely due to Clear Eyes supply constraints, impacting the eye care category [12][14] - Strong growth was observed in e-commerce channels, offsetting declines in other categories like analgesics and cough and colds [15][21] - The women's health segment showed volatility, with Monistat performing well while Summer's Eve faced challenges [39] Market Data and Key Metrics Changes - North America segment revenues decreased 4.4%, while international segment revenues decreased 90 basis points [14] - E-commerce consumption grew over 10% in Q3, indicating a shift in consumer purchasing behavior [35] Company Strategy and Development Direction - The company is focused on improving Clear Eyes supply through strategic actions, including acquiring Pillar5 and adding new suppliers [9][10] - A disciplined capital allocation strategy is in place, prioritizing investments in brands, M&A, and share repurchases [19][20] - The company anticipates a revenue forecast of approximately $1.1 billion for fiscal 2026, reflecting consumption momentum in growth channels [21] Management's Comments on Operating Environment and Future Outlook - Management noted heightened business environment uncertainty due to supply chain constraints, high inflation, and geopolitical events [4] - Confidence remains in the core business, with expectations for free cash flow growth for the fiscal year [8][21] - Sequential improvement in Clear Eyes supply is anticipated, contributing to a positive outlook for the next fiscal year [21] Other Important Information - The company experienced a $10 million write-off related to a supplier loan, which was secured by the supplier's assets [12][13] - Adjusted gross margin for the first nine months was 55.7%, up 50 basis points from the prior year [16] Q&A Session Summary Question: Are consumers shifting to other retailers? - Management confirmed a continuation of channel shifts, with consumption patterns adapting to where consumers choose to shop [24][25] Question: When might the headwinds subside? - Management indicated that it is difficult to predict, as volatility has been high, but they are well-positioned to manage through it [26] Question: Update on eye care supply and margins? - Management expects sequential improvement in Clear Eyes supply but noted that restocking will take time; margins are expected to remain stable [33][34] Question: E-commerce growth and penetration? - E-commerce consumption grew over 10% in Q3, with management noting the importance of adapting marketing strategies to connect with consumers [35][36] Question: Capital allocation and stock repurchases? - Management emphasized that investing in brands is the top priority, but they are also evaluating M&A opportunities while repurchasing shares at attractive levels [44][45] Question: Sales outlook for the fourth quarter? - Management explained that the sales guidance reflects order patterns observed in Q3, with consumption remaining strong [50][51] Question: Future M&A focus? - Management indicated that future M&A will primarily focus on brands and long-term brand building value [69]

Financial Data and Key Metrics Changes - Q3 revenue was $283 million, a decline of 2.4% from $290.3 million in the prior year, primarily due to lower eye and ear care category sales attributed to Clear Eyes supply constraints [10][12] - Adjusted EPS was $1.14, down slightly from $1.22 in the prior year, reflecting lower sales and increased G&A costs [10][15] - Free cash flow for the year to date was $209 million, up 13% compared to the previous year [5][10] Business Line Data and Key Metrics Changes - Sales declines were largely due to anticipated impacts from Clear Eyes supply chain constraints, with North America segment revenues decreasing 4.4% and international segment revenues down 90 basis points [12][13] - E-commerce channels showed strong growth, offsetting declines in other categories like analgesics and cough and colds [12][19] Market Data and Key Metrics Changes - The company continues to see positive consumption trends in e-commerce, with consumption growth over 10% in Q3 [34] - The eye care category is expected to see sequential improvements in supply, driven by strategic actions taken, including the acquisition of Pillar Five [6][8] Company Strategy and Development Direction - The company is focused on a disciplined capital allocation strategy, enhancing shareholder value through stock repurchases and strategic acquisitions [5][17] - The acquisition of Pillar Five is expected to improve supply chain control and production capabilities for eye care products [7][8] Management's Comments on Operating Environment and Future Outlook - Management noted heightened business environment uncertainty due to supply chain constraints, high inflation, and geopolitical events [3] - The company has narrowed its sales outlook for fiscal 2026 to approximately $1.1 billion, reflecting consumption momentum in growth channels but offset by slower order patterns in others [19] Other Important Information - The company anticipates a full-year G&A of just over 10% as a percentage of sales, with adjusted diluted EPS expected to be approximately $4.54 for the year [15][19] - The company has repurchased over $150 million in shares year to date, nearly 5% of shares outstanding [17] Q&A Session Summary Question: Are you seeing consumption shift to other retailers? - Management confirmed a continuation of channel shifts, with consumption picking up based on where consumers purchase products [22][24] Question: When might the headwinds go away? - Management indicated it is difficult to predict, but they are well-positioned to manage through the volatility [25] Question: Update on eye care supply and margins? - Management expects sequential improvement in Clear Eyes supply, with stable margins anticipated as the business normalizes [30][32] Question: E-commerce growth and penetration? - E-commerce consumption grew over 10% in Q3, with management noting the importance of aligning marketing initiatives with consumer shopping behavior [34][35] Question: Update on women's health business? - Monistat is performing well, while Summer's Eve is positioned for long-term growth despite some volatility [36][37] Question: Capital allocation and stock buybacks? - Management emphasized the importance of investing in brands while also evaluating M&A opportunities, with stock buybacks being a secondary focus [42][44] Question: Sales outlook for Q4? - Management indicated that the sales guidance reflects order patterns seen in Q3, with consumption remaining strong [47][48] Question: Expectations for fiscal 2027? - Management expressed confidence in base business performance and anticipated improvements in supply conditions for Clear Eyes [52][53]

Prestige Consumer Healthcare (NYSE:PBH) FY Conference Summary Company Overview - **Company**: Prestige Consumer Healthcare - **Date**: January 13, 2026 - **Key Speakers**: CEO Ron Lombardi, CFO Chris Sacco, VP of IR and Treasury Phil Terpolilli Industry Context - The year 2025 was marked by significant external events including a new administration, tariffs, and government shutdowns, impacting consumer behavior and purchasing decisions [2][2] - The healthcare products industry remains resilient as consumers prioritize health-related purchases regardless of economic conditions [2][2] Core Business Insights - **Product Portfolio**: Prestige Consumer Healthcare offers a diverse range of health products, which are essential for treating illnesses, positioning the company well during economic fluctuations [2][2] - **Brand Strategy**: The company focuses on building and growing product categories through innovation rather than merely competing for market share [4][4] - **Innovation Examples**: The introduction of non-drowsy Dramamine and ginger chews for nausea exemplifies the company's strategy to expand product offerings and cater to consumer needs [6][7] Financial Performance - **Gross Margin Impact**: The company faced challenges with gross margins due to tariffs and disruptions in the eye care business, with tariffs costing approximately $5 million in fiscal 2026 [19][19] - **EBITDA Margin**: The company maintains a strong EBITDA margin of 33%-34%, indicating robust profitability despite margin pressures [21][21] Distribution Channels - The company has a broad distribution strategy, successfully adapting to consumer shopping preferences, particularly with growth in mass retail and e-commerce channels [13][14] - The Amazon business continues to grow at double-digit rates, while traditional drug and regional grocery channels are experiencing declines [14][14] M&A and Capital Allocation Strategy - **M&A Focus**: The company is actively seeking acquisition opportunities in the fragmented consumer healthcare market, with a disciplined approach to evaluating potential brands [25][29] - **Capital Allocation**: The company plans to balance M&A, share repurchases, and cash build, expecting to generate $1 billion in free cash flow over the next four years [26][26] International Business - The international segment has been performing well, contributing over 10% of total revenue, with brands like Hydralite and FESS showing strong growth [32][32] Private Label Competition - The company acknowledges the presence of private label products but emphasizes its focus on niche brands with strong consumer trust, which helps mitigate the impact of private label competition [37][38] Women's Health Segment - Brands like Monistat and Summer's Eve are positioned for growth, with Monistat achieving a market share of approximately 55% [41][41][42] Conclusion - Prestige Consumer Healthcare is well-positioned for future growth through a diversified product portfolio, strong brand strategies, and a proactive approach to market changes and consumer needs. The company remains focused on innovation and strategic acquisitions to enhance its market presence and profitability.

Financial Data and Key Metrics Changes - Q1 sales were approximately $250 million, which was below the forecast of $258 million to $260 million, representing a year-over-year decline largely due to supply chain issues in eye care [6][12] - Gross margin expanded by 150 basis points to 56.2%, attributed to ongoing cost savings efforts [8][12] - Diluted EPS was $0.95, up approximately 6% compared to the adjusted prior year, despite the sales miss [9][16] - Free cash flow reached a quarterly record of $78 million, enabling capital deployment to enhance shareholder value [9][17] Business Line Data and Key Metrics Changes - North America segment revenues decreased by 8.4%, while International segment revenues increased by 7.1% year-over-year [13] - The International segment experienced organic sales growth of 7%, driven by broad-based sales growth [14] Market Data and Key Metrics Changes - The company anticipates a full-year revenue of $1.1 billion to $1.115 billion, with organic revenue expected to decline approximately 1.5% to 3% [22] - For Q2, revenues are expected to be approximately $256 million to $259 million, down year-over-year due to supply chain timing and lower retail order patterns [22] Company Strategy and Development Direction - The company announced the acquisition of Pillar Five to secure and expand long-term supply for eye care products, which is expected to improve supply stability in the second half of the year [11][19] - The company maintains confidence in its diverse consumer healthcare portfolio and long-term growth opportunities despite the disappointing start to the year [21] Management Comments on Operating Environment and Future Outlook - Management highlighted heightened business environment uncertainty due to supply chain constraints, high inflation, and geopolitical events [5] - The company expects significant improvement in Clear Eye shipments in the second half of the year, with a focus on recovering lost sales in FY 2027 and beyond [22][29] Other Important Information - The anticipated cost of tariffs for the full year is approximately $5 million, which the company expects to offset through strategic actions [15] - The acquisition of Pillar Five is expected to be funded from cash on hand and will have a minimal impact on the P&L, being approximately neutral to EPS on a normalized basis [19][63] Q&A Session Summary Question: Change in retail order patterns and inventory destocking - Management noted increased order volatility from retailers in July, which is expected to significantly impact Q2 but anticipates a return to normalized order trends in the second half [25][26] Question: Confidence in Clear Eyes supply normalizing - Management expressed confidence in supply normalizing in the back half of the year, with expectations of recovering lost sales in FY 2027 and beyond [29][30] Question: Impact of bringing eye care manufacturing in-house on margins - Management does not expect any meaningful movement in gross margin as a result of the acquisition of Pillar Five, indicating it will be largely neutral to the P&L [37][38] Question: Inventory levels and destocking expectations - Management does not see any meaningful ramp-up of inventory among their largest customers, indicating that inventory levels are not inflated [45][46] Question: Performance of the women's health business - Management remains optimistic about the continued recovery of the Summer's Eve brand, expecting positive performance for the remainder of the year [48] Question: Sustaining international growth - Management is confident in sustaining international growth, expecting a slight softening compared to the first quarter but still in line with long-term growth algorithms [70]

Financial Data and Key Metrics Changes - Q1 sales were approximately $250 million, which was below the forecast of $258 million to $260 million, representing a year-over-year decline largely due to supply chain issues and lower sales in eye care [5][10] - Gross margin expanded by 150 basis points to 56.2%, attributed to cost savings efforts [6][12] - Diluted EPS was $0.95, up approximately 6% from the adjusted prior year, despite the sales miss [7][14] - Free cash flow reached a record $78 million, enabling capital deployment for shareholder value enhancement [7][15] Business Line Data and Key Metrics Changes - North America segment revenues decreased by 8.4%, while International segment revenues increased by 7.1% year-over-year [11][12] - The eye care segment faced significant supply constraints, impacting sales, while other segments like Dramamine and Fleet showed healthy consumption trends [6][12] Market Data and Key Metrics Changes - The International segment experienced organic sales growth of 7%, driven by broad-based sales growth [12] - E-commerce channel saw double-digit year-over-year consumption growth, indicating a long-term trend towards higher online purchasing [12] Company Strategy and Development Direction - The company announced the acquisition of Pillar Five to secure and expand long-term supply for eye care products, which is expected to improve supply stability in the second half of the year [9][17] - The company anticipates revenues for fiscal 2026 to be between $1.1 billion and $1.115 billion, with organic revenue expected to decline approximately 1.5% to 3% [20] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in the start of the year but remains confident in the long-term growth opportunities of their consumer healthcare portfolio [19] - The company expects significant improvement in Clear Eye shipments in the second half of the year, despite current supply chain challenges [20][29] Other Important Information - The company maintained a leverage ratio of approximately 2.4 times and repurchased over 400,000 shares in Q1 [7][15] - The anticipated cost of tariffs for the full year is approximately $5 million, which the company expects to offset through strategic actions [13] Q&A Session Summary Question: Change in retail order patterns and inventory destocking - Management noted increased order volatility from retailers in July, disconnected from consistent consumption levels, impacting Q2 significantly [23][24] Question: Confidence in supply normalizing for Clear Eyes - Management expressed confidence in supply normalizing in the back half of the year, with new suppliers and a high-speed line expected to contribute [26][29] Question: Impact of bringing eye care manufacturing in-house on margins - Management indicated no meaningful movement in gross margin as a result of bringing manufacturing in-house, expecting it to be largely neutral to the P&L [36][39] Question: Outlook for cough and cold season - Management maintained the initial guidance for a modest decline in the cough and cold category, too early to tell at this point [42] Question: Inventory levels within segments - Management reported no meaningful ramp-up of inventory, indicating that current order patterns are disconnected from consumption [44] Question: Performance of Summer's Eve brand - Management expressed confidence in the continued positive momentum of the Summer's Eve brand for the remainder of the year [46] Question: International segment growth sustainability - Management expects to sustain international growth, projecting a long-term algorithm of over 5% for the segment [68]

Core Insights - Prestige Consumer Healthcare Inc. reported a revenue of $249.5 million for the first quarter of fiscal 2026, a decrease of 6.6% from $267.1 million in the same period last year, primarily due to supply constraints in the Clear Eyes product line [3][10] - The company announced an acquisition of Pillar5 Pharma to enhance its eye care production capacity, which is expected to be neutral to earnings per share (EPS) and close in the third quarter of fiscal 2026 [10][11] - The updated fiscal 2026 revenue outlook is revised to $1,100 to $1,115 million, with diluted EPS expected to be between $4.50 and $4.58 [14][16] Financial Performance - Reported net income for the first quarter of fiscal 2026 was $47.5 million, down from $49.1 million in the prior year, with diluted EPS of $0.95 compared to $0.98 in the same period last year [4][10] - Free cash flow for the first quarter increased to $78.2 million from $53.6 million in the prior year, attributed to improved working capital timing and lower interest expenses [6][10] - The company's net cash provided by operating activities was $79.0 million, compared to $54.8 million in the prior year [6][10] Segment Performance - North American OTC Healthcare segment revenues decreased to $212.6 million from $232.3 million year-over-year, primarily due to lower sales in the Eye & Ear Care category [8][29] - International OTC Healthcare segment revenues increased by 6.1% to $37.0 million, driven by broad-based growth across various geographies [9][29] Strategic Initiatives - The acquisition of Pillar5 Pharma is part of a long-term strategy to secure supply and enhance production capacity for eye care products, addressing current supply chain challenges [10][13] - The company aims to leverage its diverse portfolio and strong financial profile to drive long-term shareholder value [2][14]

Core Viewpoint - Prestige Consumer Healthcare Inc. is set to release its fiscal 2026 first quarter earnings on August 7, 2025, before market opening, followed by a conference call at 8:30 a.m. ET to discuss the results [1]. Group 1 - The earnings release will be available on the company's Investor Relations page [2]. - Participants can join the conference call via phone by registering to receive dial-in details and a unique pin, with a recommendation to join 10 minutes early [2]. - A replay of the conference call will be accessible for approximately one week after the live event on the Investor Relations page [3]. Group 2 - Prestige Consumer Healthcare Inc. markets, sells, manufactures, and distributes a variety of consumer healthcare products across the U.S., Canada, Australia, and other international markets [4]. - The company's product portfolio includes brands such as Monistat, Summer's Eve, BC, Goody's, Clear Eyes, TheraTears®, DenTek, Dramamine, Fleet, Chloraseptic, Luden's, Compound W, Little Remedies, Boudreaux's Butt Paste, Nix, Debrox, Gaviscon, and Hydralyte [4].

Prestige Consumer Healthcare (PBH) FY Conference Summary Company Overview - Prestige Consumer Healthcare sells and distributes over-the-counter health care products in the US, Canada, and certain international markets, with well-known brands like Dramamine, Clear Eyes, Dentech, and Ludens [2][4] Core Strategy and Financial Performance - The company's strategy focuses on building a consumer health care portfolio with leading brands in niche categories, which has remained unchanged over time [4][5] - Fiscal year 2025 ended with record sales and earnings per share (EPS), alongside significant cash flow performance, resulting in the lowest leverage in the company's history [7] - The company anticipates generating approximately $1 billion in free cash flow over the next four years [7][54] Consumer Behavior and Market Dynamics - Consumers are becoming more thoughtful in their shopping habits, seeking better value propositions without switching to different products [9][10] - There have been no significant changes in the competitive landscape, with no new entrants affecting the categories in which Prestige competes [12][13] Tariffs and Pricing Strategy - The company expects a cost impact of approximately $15 million for fiscal year 2026 due to tariffs, with a total annualized impact of around $20 million [16] - Prestige is well-positioned to navigate the tariff environment due to a diverse portfolio and a largely domestic supply base [19][20] Product Portfolio Insights - Clear Eyes is expected to recover from supply chain challenges over the next couple of years, with efforts to expand capacity and bring on new suppliers [24][25] - Women's health products, particularly Monistat and Summer's Eve, are showing signs of recovery, with Monistat stabilizing and Summer's Eve experiencing year-over-year sales growth for the first time in three years [28][30] - The international segment is projected to grow in the mid-single digits, driven by strong brand performance in Australia and surrounding regions [31][33] E-commerce and Marketing Strategy - E-commerce has been growing at over 10% annually, with a focus on leveraging online platforms as marketing tools to connect with new shoppers [34][36] Financial Outlook and Growth Targets - The company targets 2% to 3% organic sales growth and 6% to 8% EPS growth in the long term, supported by a diverse portfolio and stable profit margins [46][48] - Gross margin is expected to improve to approximately 56.5% for fiscal year 2026, with ongoing cost-saving initiatives [51][52] Capital Allocation and M&A Strategy - Capital allocation priorities include organic growth investments, M&A opportunities, and share repurchases, with a focus on maintaining leverage below three times [54][56] - The company continues to see consistent M&A opportunities, particularly in the consumer health care space, with a preference for acquisitions in the $200 million to $500 million range [62][65] Conclusion - Prestige Consumer Healthcare is well-positioned for long-term growth, with a strong portfolio, effective strategies to navigate market challenges, and a clear focus on capital allocation and M&A opportunities [66]

Core Insights - Prestige Consumer Healthcare's long-term growth strategy focuses on building strong brands and expanding its brand portfolio through both organic growth and acquisitions [1][10] - The company has seen significant momentum in e-commerce, with sales growing at a double-digit rate and e-commerce now representing a high-teens percentage of total sales, up from approximately 15% the previous year [7][8] - Despite solid revenue growth forecasts, the company faces challenges from long-term debt of $1.01 billion and currency fluctuations that could impact profitability [8][11][12] Financial Performance - Prestige Consumer's stock has increased by 30.9% over the past year, outperforming the industry and S&P 500, both of which grew by 9.1% [2] - The company has a market capitalization of $4.23 billion and an earnings yield of 5.6%, significantly higher than the industry's 0.6% yield [2] - The Zacks Consensus Estimate for fiscal 2026 earnings per share is $4.77, with revenues projected at $1.15 billion, indicating a 0.9% increase from the previous year [13] Brand and Product Strategy - The company emphasizes targeted brand-building and innovation, particularly in niche consumer healthcare categories, which supports its market share leadership [4] - Recent product innovations include new flavors for Hydralyte and the Monistat Maintain Kit, aimed at enhancing consumer engagement [5][10] - Acquisitions, such as TheraTears and Hydralyte, have diversified the product portfolio, providing multiple growth sources and minimizing the impact of category-specific slowdowns [10] E-Commerce and Digital Strategy - E-commerce sales growth is driven by brand-specific digital strategies, including website refreshes and engaging content, which enhance consumer education and retention [7][9] - The company is expanding its digital channels internationally while maintaining strong profitability across all sales channels [8][9] Debt and Currency Risks - Prestige Consumer's long-term debt of $1.01 billion and a cash position of $98 million indicate a moderately leveraged debt-to-capital ratio of 35.6% [11] - Currency fluctuations pose a risk, as approximately 15.6% of revenues come from international markets, potentially affecting pricing and costs [12]