Prestige Consumer Healthcare Inc. Q1 FY2026 earnings call

• Q1 sales were approximately $250 million, missing the prior forecast. A planned production shutdown in eye care stretched longer than anticipated causing a shortfall for Clear Eyes.
• Acquired Pillar5 to address eye care supply issues, with the first supplier delivering in late Q1 and the second on track for early Q3. Direct ownership of Pillar5 will help expand capacity.
• Gross margin expanded 150 basis points to 56.2% due to cost savings. EPS was $0.95, up ~6% vs adjusted prior year. Free cash flow was $78 million, a quarterly record.
• International segment had strong organic sales growth of 7%. E-commerce channel saw double-digit consumption growth. Tariff outlook revised to ~$5 million with strategic actions to offset.
• Announced acquisition of Pillar5, expected to be neutral to EPS, funded from cash on hand, closing in Q3.

Q1 sales were approximately $249.5 million, down 6.6% from the prior year. Excluding foreign currency effects, North America segment revenues decreased 8.4% and International segment revenues increased 7.1%. Q1 organic revenue decreased 6.4% versus the prior year. Total company gross margin was 56.2% in Q1, up 150 basis points from the prior year.

• Full year fiscal '26 revenue expected $1.1 billion to $1.115 billion, organic revenue down ~1.5% to 3% primarily due to eye care supply constraints and retail environment. Q2 revenue expected $256 million to $259 million. Full year adjusted EPS $4.50 to $4.58, Q2 EPS ~$0.97. Free cash flow expected $245 million or more.
• EBITDA margin expected in low to mid-30s, consistent with long-term trends.

• Business environment uncertainty due to supply chain constraints, high inflation, geopolitical events which could impact results. Eye care supply issues initially caused significant shortfall in Clear Eyes sales. Retail order patterns in July showed volatility disconnected from consumption levels.

Q: Impact of Pillar5 acquisition on fiscal '27 EPS?

A: Anticipated to be largely neutral to P&L, tens of basis points impact, focus on supply stability first.

Q: Maintaining Clear Eyes brand position despite supply issues?

A: Focus on maximizing top SKU availability, expecting to recover share as shipments improve, category decline and spread of share loss across players.

Q: Sustainment of International segment growth?

A: Confident in sustaining through broad-based growth, brand-building, and geographic expansion.