Prestige sumer Healthcare (US:PBH)2023-02-02 16:49Financial Data and Key Metrics Changes - Q3 2023 revenues were $276 million, representing a 2% organic growth compared to the prior year, driven by strong performance in the cough and cold category and international segment [54][59] - Diluted EPS for Q3 was $1.4, with a year-to-date diluted EPS of $3.14, slightly down from $3.15 in the prior year due to gross margin compression [60][69] - Gross margin for the first nine months was 56%, a decline of 170 basis points from the previous year's adjusted gross margin of 57.7% [89][135] Business Line Data and Key Metrics Changes - The cough and cold category saw over 20% growth year-to-date, while the women's health and eye & ear care categories experienced declines [70][88] - International segment revenues increased by over 25% in Q3, excluding foreign exchange effects, with strong performance across various regions and product categories [73] Market Data and Key Metrics Changes - North American revenues were down approximately 1% year-over-year, with significant increases in cough and cold and gastrointestinal categories offset by declines in women's health and eye & ear care [88] - E-commerce now accounts for about 15% of total sales, continuing to grow in the high single digits [103] Company Strategy and Development Direction - The company aims to maintain a consistent pipeline of new products and innovation, with expectations for continued growth in fiscal 2024 [107] - Strategic investments in inventory are being made to better align with retail customer service requirements and to mitigate supply chain disruptions [29][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's positioning and consumption trends, anticipating continued growth in fiscal 2024 after two record years [16][68] - The company is adapting to a dynamic supply chain environment, focusing on building inventory buffers to support future growth opportunities [22][29] Other Important Information - The company anticipates free cash flow of $220 million or more for the year, reflecting strategic increases in inventory investments [61][75] - The leverage ratio is expected to gradually decrease over time, providing more capital allocation flexibility [55][96] Q&A Session Summary Question: What drove the sales reduction to the lower end of the range? - The sales guidance was adjusted from 4% growth to 3% growth primarily due to foreign exchange headwinds, particularly with the Australian and Canadian dollars [38] Question: When do you expect improvements in the women's health and eye & ear care categories? - Management did not provide specific timelines but acknowledged ongoing challenges in these categories [40] Question: Is there any pushback from retailers on pricing? - There has been no significant pushback from retailers on pricing, as they are also facing inflationary pressures [113] Question: What percentage of growth is attributed to pricing actions? - Pricing actions are expected to account for about two-thirds of the growth for the year, estimated in the $15 million to $20 million range [117] Question: How is the company addressing supply chain disruptions? - The company is focusing on building inventory buffers and adding new suppliers to mitigate supply chain challenges [28][125]