Prestige Returns to Growth and Raises Outlook
The consumer-health company lifted its fiscal 2027 revenue forecast to as much as $1.315 billion.
Prestige Consumer Healthcare (PBH), the maker of over-the-counter health products, returned to revenue and adjusted-profit growth in its fiscal first quarter as acquisitions and improving organic sales offset pressure on reported earnings.
Revenue rose 6.5% from a year earlier to $265.7 million, reversing a 5.0% decline in the preceding quarter. Organic revenue grew 3.2% after falling 6.4% on a currency-adjusted basis in the fourth quarter, marking a turn in the underlying sales trajectory.
Adjusted diluted earnings increased 3.2% to $0.98 a share, following a 6.8% decline in the prior quarter. GAAP net income fell 38.5% to $29.2 million, and diluted earnings declined to $0.61 a share from $0.95 as acquisition and facility-related costs weighed on results.
GAAP gross margin narrowed to 51.3% from 56.2%, while adjusted gross margin declined to 55.0% and was roughly flat sequentially. Operating expenses climbed to $83.7 million from $68.6 million, contributing to a 26.8% drop in GAAP operating income to $52.5 million. Adjusted EBITDA rose 5.5% to $84.1 million, though its margin edged down to 31.6%.
North American over-the-counter revenue increased 6.4% to $226.2 million, though contribution margin fell 4.9% to $87.0 million. International revenue rose 6.9% to $39.5 million, with contribution margin up 4.0% to $14.5 million. Strength in TheraTears and Debrox helped Eye & Ear Care improve from the prior quarter, when lower sales and constrained Clear Eyes supply were the main drag.
Breathe Right contributed $5.9 million of revenue, including $1.4 million internationally, and prompted Prestige to introduce a Wellness, Sleep & Other reporting category. Acquisition and Pillar5-related items reduced GAAP earnings by $17.3 million, or $0.36 a share.
Prestige now expects fiscal 2027 revenue of $1.290 billion to $1.315 billion and adjusted earnings of $4.55 to $4.65 a share. Adjusted free cash flow is projected at no less than $270 million, while the organic-growth outlook remains 1% to 3%. The higher forecasts entirely reflect Breathe Right and LaCorium, which are expected to add about $240 million in annual revenue and nearly 20% to the company’s revenue base.
Funding that expansion reshaped the balance sheet. Gross debt roughly doubled to $2.045 billion after Prestige borrowed $1.045 billion for Breathe Right. The company also replaced $400 million of 5.125% notes due in 2028 with 6.25% notes due in 2034, extending its nearest maturity to 2031 while increasing the coupon by 1.125 percentage points.