Prestige Consumer Healthcare Inc. PBH recorded second-quarter fiscal 2025 earnings per share (EPS) of $1.09, in line with the Zacks Consensus Estimate. However, the bottom line improved 1.9% from the year-ago period’s reported figure.
Following the release, shares of PBH improved 3.2% at yesterday’s close.
Total revenues dropped 0.9% year over year to $283.8 million but exceeded the Zacks Consensus Estimate by 0.7%. Revenues were affected by the limited ability to supply strong demand for Clear Eyes as well as declines in the Cough & Cold and Analgesic categories, partially offset by continued strong growth in the International OTC segment.
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Segments in Detail
The company conducts its operations through two reportable segments — North American OTC Healthcare and International OTC Healthcare.
Revenues in the North American OTC Healthcare segment totaled $239.8 million, down 1.9% from the year-earlier quarter. Our model projected the segment’s revenues to be $240 million in the second quarter.
Prestige Consumer Healthcare Inc. Price, Consensus and EPS Surprise
Prestige Consumer Healthcare Inc. price-consensus-eps-surprise-chart | Prestige Consumer Healthcare Inc. Quote
The revenue decline in the quarter was due to the inability to fully cater to demand for Clear Eyes and declines in the Cough & Cold and Analgesics categories.
Revenues in the International OTC Healthcare segment were $44 million, up 5% from the year-ago quarter’s figure (up 4.4% at constant exchange rate or CER). Our model projected the segment’s revenues to be $41.7 million in the second quarter.
The company reported strong performance across the Hydralyte brand.
Margins
The gross profit in the fiscal second quarter declined 1.6% year over year to $157.4 million. Meanwhile, the gross margin contracted 43 basis points (bps) year over year to 55.5% on a 0.1% increase in the cost of sales (excluding depreciation).
During the quarter, advertising and marketing expenses rose 3.3% to $41.4 million. General and administrative expenses were up 0.3% to $26.1 million. Adjusted operating income in the quarter under review was $89.9 million, highlighting a decrease of 4.3%. The adjusted operating margin contracted 112 bps to 31.7%.
Financial Update
Prestige Consumer exited the fiscal second quarter with cash and cash equivalents of $51.5 million compared with $34.3 million recorded at the end of fiscal 2024. Net long-term debt totaled $1.05 billion, down from $1.09 billion at the end of the fiscal first quarter.
The cumulative net cash provided by operating activities at the end of the fiscal second quarter was $124.6 million compared with $110.5 million in the year-ago period. The cumulative adjusted free cash flow at the end of the fiscal second quarter was $121.4 million compared with $106.1 million in the year-ago period.
Guidance
The company reiterated its earlier-provided fiscal 2025 revenue growth and EPS outlook.
Revenues for the full year are once again anticipated in the range of $1.125 billion-$1.140 billion. Organic revenue growth for the full year is anticipated to be approximately 1%. The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $1.13 billion.
Prestige Consumer continues to expect fiscal 2025 adjusted EPS to be in the range of $4.40-$4.46. The Zacks Consensus Estimate for fiscal 2025 EPS stands at $4.43.
Free cash flow for the full year is likely to be $240 million or more (unchanged).
Our Take
PBH exited the fiscal second quarter of 2025 with better-than-expected revenues and in-line earnings. The year-over-year decline in revenues added to our concern. Sales were largely impacted by the ongoing supply chain challenges in the Clear Eyes business. Meanwhile, the quarter’s results benefited from continued strong international growth that was broad-based and led by the Hydralyte brand.
The contraction of the gross and adjusted operating margins during the quarter was discouraging.
Zacks Rank and Key Picks
Prestige Consumer currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated DGX, ResMed Inc. RMD and Boston Scientific Corporation BSX.
Quest Diagnostics, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2024 adjusted EPS of $2.30, beating the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion outpaced the consensus mark by 3.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quest Diagnostics has a long-term estimated growth rate of 6.5%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.4%.
ResMed reported first-quarter fiscal 2025 adjusted EPS of $2.20, beating the Zacks Consensus Estimate by 8.4%. Revenues of $1.22 billion surpassed the Zacks Consensus Estimate by 2.9%. It currently carries a Zacks Rank #2.
ResMed has a long-term estimated growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.4%.
Boston Scientific reported third-quarter 2024 adjusted EPS of 63 cents, beating the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion surpassed the Zacks Consensus Estimate by 4.4%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 13.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.
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