Prestige Consumer Healthcare (PBH) 8 Aug 24 2025 Q1 Earnings call transcript

Prestige Consumer Healthcare, Inc. recently held its Q1 2025 earnings call, highlighting a solid start to the year and an optimistic outlook for the future. The company reported a sales decline of 4.4% year-over-year, largely attributed to supply chain challenges impacting its Clear Eyes brand. However, this decline was less than anticipated due to improved production trends and effective expedited shipments to retailers.

Strategic Focus on Women's Health

Ron Lombardi, the Chairman, President, and CEO of Prestige Consumer Healthcare, shared updates on the company's performance and strategic initiatives. One of the key focus areas is the Summer's Eve brand, which has undergone significant changes to stabilize sales trends and return it to growth. The company's diverse portfolio has shown solid consumption trends, with strong international growth contributing to the positive performance.

Challenges and Opportunities

Despite supply chain constraints and high inflation, Prestige Consumer Healthcare has managed to maintain a strong financial position. The company reported a net debt of approximately $1.1 billion, with a covenant-defined leverage ratio of 2.8x. The company is also actively managing its cash flow, generating $54 million in free cash flow in Q1, up from the prior year.

Looking Ahead

For the full fiscal year, Prestige Consumer Healthcare anticipates revenues of $1.125 billion to $1.140 billion, with organic revenue growth of approximately 1%. The company expects adjusted EPS growth of approximately 5% to 6%, along with an EBITDA margin in the low to mid-30s.

The earnings call also included a discussion on the company's focus on women's health, specifically the Summer's Eve brand. With two distinct 1 market share brands, Monistat and Summer's Eve, the company is making progress in stabilizing Monistat sales trends and focusing efforts on Summer's Eve to return it to growth. The company's latest media campaign for Summer's Eve emphasizes its key consumer benefit of odor protection and connects with consumers based on the brand's heritage around freshness and confidence.

Addressing Challenges

During the Q&A session, analysts raised concerns about supply chain issues and the impact on inventory levels, particularly in the pharmacy channel. However, Prestige Consumer Healthcare expressed confidence in its ability to manage these challenges, focusing on expediting shipments and maintaining in-stock levels at retailers. The company also highlighted the strength of its brands, particularly in the eye and ear care category, and the resilience of consumers' demand for trusted healthcare products.

A Positive Outlook

Overall, Prestige Consumer Healthcare's Q1 2025 earnings call painted a positive picture of the company's performance and future prospects. Despite facing challenges, such as supply chain constraints and high inflation, the company is making strategic moves to address these issues and maintain its competitive position in the consumer healthcare market. With a focus on innovation, marketing, and operational efficiency, Prestige Consumer Healthcare is well-positioned for growth and value creation for its shareholders.