Prestige sumer Healthcare (US:PBH)2024-05-15 17:15Financial Data and Key Metrics Changes - For fiscal 2024, revenue was approximately flat at $1.125 billion, with a 20 basis point increase when excluding foreign exchange effects [33] - Q4 revenue was $277 million, down 2.9% on an organic basis compared to $285.9 million in the prior year [32] - Adjusted diluted EPS for fiscal 2024 was $4.21, flat to the prior year, impacted by lower Q4 revenue and associated cost headwinds [35] Business Line Data and Key Metrics Changes - The North American segment revenues decreased by 1.5%, while the International segment increased by approximately 11% [33] - Strong performance was noted in the Ear & Eye Care, GI, and dermatological categories, which helped offset declines in Women's Health and the strategic exit of the private label business [33] - E-commerce grew approximately 8% in fiscal 2024, now representing about 15% of total sales [30] Market Data and Key Metrics Changes - The International segment achieved impressive 10% organic revenue growth against a tough prior year comparison [49] - The Women's Health category faced challenges, particularly in the Summers Eve on-the-go offerings, but there are improving trends noted [28] Company Strategy and Development Direction - The company remains committed to its long-term brand-building strategy, which has historically driven shareholder value [23] - A multiyear share repurchase program of up to $300 million has been approved, reflecting confidence in long-term profitable growth [38] - The company is focused on strategic M&A opportunities while maintaining a disciplined approach to capital allocation [37] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with Q4 performance due to supply chain pressures but remains confident in the long-term strategy [22][41] - For fiscal 2025, revenue is anticipated to be between $1.125 billion and $1.140 billion, with organic revenue growth of approximately 1% [42] - Supply chain headwinds, particularly in Eye Care, are expected to continue in the first half of fiscal 2025 before recovering [41] Other Important Information - The company generated approximately $240 million in free cash flow for fiscal 2024, enabling significant deleveraging to a leverage ratio of 2.8 times [6][53] - The gross margin for fiscal 2024 was 55.5%, slightly up from the prior year, despite supply chain constraints [34] Q&A Session Summary Question: What is the confidence in resolving supply chain challenges by the second half? - Management indicated a plan is in place for suppliers to return to historic levels, expecting recovery in the second quarter and stabilization in the second half [57] Question: How much of the sales miss was related to supply chain issues versus Women's Health challenges? - The majority of the sales miss was attributed to Eye Care, with significant consumption gains noted in other categories [65] Question: Are competitors facing similar supply chain issues? - The suppliers for the Clear Eyes brand are primarily exclusive, so competitors are likely facing different supply chain factors [76] Question: What is the expected impact of supply chain disruptions on market share? - Management does not anticipate losing market share due to supply chain issues, citing strong consumer trust in their brands [91] Question: How will capital allocation priorities change in light of these challenges? - The company will continue to prioritize investing in its business, followed by disciplined M&A and share repurchase programs [96]