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    PBH
    Earnings call· Jun 2026(Q1 FY27)

    Prestige Consumer Healthcare Q1 FY27 earnings call PBH

    Aug 6, 2026 Source

    Executive summary

    Prestige Consumer Healthcare Q1 FY27 — Strong Start with Strategic Acquisitions and Record Free Cash Flow

    Prestige Consumer Healthcare delivered a strong Q1 FY27, exceeding sales and earnings expectations, driven by a diversified portfolio and strategic acquisitions. The company successfully integrated the Breathe Right portfolio and LaCorium Health, enhancing diversification and scale. Despite some supply volatility for Clear Eyes and international order timing, management remains confident in its full-year outlook, emphasizing disciplined capital allocation and debt reduction.

    Highlights

    5

    • Sales increased 6.5% to $265.7 million, reflecting broad-based strength across the portfolio.

    • Adjusted free cash flow reached a quarterly record of $83.7 million, providing additional capital allocation flexibility.

    • Successfully completed integration of the Breathe Right portfolio (contributing $5.9 million revenue in Q1) and LaCorium Health acquisitions.

    • North America organic revenue grew 4.2%, led by strong performance in GI (Fleet, Dramamine) and dermatologicals (Compound W).

    • Full-year FY27 revenue guidance raised to $1.29 billion-$1.315 billion, and adjusted diluted EPS guidance raised to $4.55-$4.65, driven by acquisitions.

    Concerns

    3

    • Clear Eyes sales were below expectations due to supply constraints, leading to a decline in brand revenue in Q1.

    • International segment organic revenue decreased 2.1% versus prior year, affected by the timing of distributor orders.

    • Adjusted gross margin was down 120 basis points versus the prior year, primarily due to higher transportation costs and mix.

    Guidance & targets

    14
    CategoryTargetConfidence
    Full-year FY27 Revenue
    $1.29 billion-$1.315 billion
    high materiality
    High
    Full-year FY27 Organic Revenue Growth
    1%-3%
    high materiality
    High
    Full-year FY27 Adjusted Diluted EPS
    $4.55-$4.65
    high materiality
    High
    Full-year FY27 Adjusted Free Cash Flow
    $270 million or more
    medium materiality
    High
    Full-year FY27 Year-end Leverage Ratio
    just below 4x
    medium materiality
    High
    Q2 FY27 Revenue
    $328 million to $331 million
    medium materiality
    High
    Q2 FY27 Adjusted Diluted EPS
    $1.06 to $1.08
    medium materiality
    High
    Full-year FY27 Adjusted Gross Margin
    just over 57%
    medium materiality
    High
    Q2 FY27 Adjusted Gross Margin
    just over 57%
    medium materiality
    High
    Full-year FY27 Advertising and Marketing Rate
    approximately 14.5% of sales
    low materiality
    High
    Q2 FY27 Advertising and Marketing Rate
    approximately 14.5% of sales
    low materiality
    High
    Full-year FY27 Adjusted G&A as % of Sales
    approximately 10%
    low materiality
    High
    International Segment Organic Revenue Growth
    5% or more
    low materiality
    Medium
    Breathe Right Annualized Accretion
    $0.25
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    North America
    Growth excludes FX and the Breathe Right acquisition. Q1 benefited from some e-commerce order volatility at the expense of Q2.
    GI: continued strength (Fleet, Dramamine)Dermatologicals: strong growth (Compound W)Ear and Eye Care: Clear Eyes supply constrained, TheraTears and Debrox strong growthe-commerce: strong double-digit consumption growth
    		—4.2%——
    International
    Organic growth. Still expects a return to the segment organic revenue long-term growth target of 5% or more for the full year.
    Positive consumption trendsSales affected by timing of distributor orders
    		—-2.1%——

    Operational metrics

    18
    Q1 FY26 Revenue
    $249.5 million
    Q1 FY26

    Prior year comparison for Q1 FY27 revenue growth.

    Q1 FY26 Adjusted EBITDA Growth
    5.5%YoY
    Q1 FY26

    Prior year comparison for Q1 FY27 adjusted EBITDA growth.

    Q1 FY26 Adjusted Diluted EPS
    $0.95
    Q1 FY26

    Prior year comparison for Q1 FY27 adjusted diluted EPS.

    Unsecured Notes Issuance
    $400 million
    July 2026

    Replaced existing notes that were coming due; funded on July 15.

    Breathe Right Accretion
    $0.25
    Annualized

    Annualized rate of accretion from Breathe Right acquisition; some variability expected in initial quarters.

    Q1 FY27 Revenue
    $265.7 millionup 6.5% YoY
    Q1 FY27

    Reflecting broad-based strength across the portfolio.

    Q1 FY27 Organic Revenue Growth
    3.2%YoY
    Q1 FY27

    Excluding the effects of foreign currency and the acquisition of the Breathe Right portfolio.

    Q1 FY27 Adjusted EBITDA Growth
    5.5%YoY
    Q1 FY27

    Mostly tracking the sales growth.

    Q1 FY27 Adjusted Diluted EPS
    $0.98up 3% YoY
    Q1 FY27

    Revenue increase partially offset by higher interest expense from the acquisition.

    Q1 FY27 Adjusted Gross Margin
    approximately 55%down 120 bps YoY
    Q1 FY27

    Largely in line with expectations, flat sequentially.

    Q1 FY27 Advertising and Marketing Expense
    $34.7 million13% of sales
    Q1 FY27

    Down versus the prior year due to the timing of marketing programs.

    Q1 FY27 Adjusted G&A Expense
    11.5%
    Q1 FY27

    As a percent of sales.

    Net Debt
    approximately $2 billion
    June 30, 2026

    As of quarter end.

    Acquisitions' Contribution to FY27 Revenue
    approximately $190 million
    FY27

    Expected contribution from Breathe Right and LaCorium acquisitions.

    Acquisitions' Contribution to FY27 EPS Growth
    about 3 points
    FY27

    Projected EPS growth from the acquisitions, with some near-term timing variability.

    Q1 Order Timing Benefit
    about 2 points
    Q1 FY27

    Benefit to Q1 growth from retailer order timing, expected to reverse in Q2.

    Clear Eyes Sales as % of Total
    less than 3%
    Current

    Due to supply challenges, relative to total sales including acquisition revenue.

    FY27 Revenue Growth from Price
    about 1/4
    FY27

    Projected portion of total revenue growth for fiscal '27 attributed to pricing.

    Industry KPIs

    3
    MetricValueDetails
    EPS revenue guidanceRevenue: $1.29B-$1.315B; Adjusted Diluted EPS: $4.55-$4.65USD
    Price volume mix decompositionabout 1/4%
    Geographic regional revenue growthNorth America: 4.2%; International: -2.1%%

    Product announcements

    2
    ProductTypeDetails
    Breathe Right Menthollaunch
    Breathe Right Sportlaunch

    Deals & partnerships

    2
    Breathe Right portfolioAcquisition of the Breathe Right nasal strips portfolio.

    Closed on June 12. Largely integrated into Prestige's operations within 60 days, running through systems and warehouse network.

    LaCorium HealthAcquisition of LaCorium Health, primarily based in Australia, including its Dermal Therapy brand.

    Closed on July 1. Dermal Therapy brand holds a leading position in therapeutic skin care categories. Employees integrated into Care Pharma office in Sydney; broader integration to proceed methodically over the balance of the year.

    Risks & headwinds

    4
    Clear Eyes supply constraintsQ1 FY27, Q2 FY27 (expected output variability)

    sales that were below our expectations; leading to a decline in brand revenue; less than 3% of sales today

    Mitigation: Investment in Pillar5 facility, management changes at Pillar5, multi-year recovery plan including rebuilding safety stocks, restoring full SKU offering, and marketing investment.

    International segment organic revenue declineQ1 FY27

    -2.1%

    Mitigation: Attributed to timing of distributor orders; still expects return to 5%+ organic growth for full year.

    Higher transportation costs and mix impact on gross marginQ1 FY27

    down 120 basis points versus the prior year

    Mitigation: Factored into outlook; company manages to low to mid-30s EBITDA margin, reinvesting cost savings.

    Business environment uncertaintyongoing

    remains heightened due to supply chain constraints, high inflation and geopolitical events

    Mitigation: Best estimate based on the information available as of today's date (safe harbor).

    What to watch in Q2 FY27

    5

    Clear Eyes supply consistency and output

    H2 FY27
    Currentvolatile and was constrained in Q1
    Targetgreater stability in the second half, supporting sequential improvements in eye care shipments

    Why it matters

    Critical for the multi-year recovery plan to return Clear Eyes to its leadership position and contribute meaningfully to sales.

    Looking ahead, we believe the facility is positioned for greater stability in the second half, supporting sequential improvements in eye care shipments.

    Q&A highlights

    5

    Asked about the long-term growth expectations for Breathe Right and LaCorium, and their EPS contribution for the year.

    Ron Lombardi reiterated optimism for the long-term outlook of the acquisitions, consistent with prior guidance. Chris Sacco stated the acquisitions are projected to add about 3 points of EPS growth for the year, noting some near-term timing variability but confidence in driving sales and profitability.

    “the acquisitions, obviously, higher sales growth projected for the year. It's about 3 points of EPS growth.”

    asked by Susan Anderson · answered by Christine Sacco

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Acquisitions and Integration Progress

    Prestige completed two key acquisitions: the Breathe Right portfolio on June 12 and LaCorium Health on July 1. The Breathe Right integration is largely complete, with the business now running through Prestige's systems and warehouse network, contributing $5.9 million in Q1 revenue. LaCorium Health's integration will proceed methodically over the balance of the year, benefiting from co-location with Care Pharma in Australia and expected synergies from distributor optimization and sales integration.

    02

    Clear Eyes Recovery Strategy and Pillar5 Investment

    The company is focused on a multi-year strategy to return Clear Eyes to its leadership position, which has seen significant declines from peak levels due to product availability. This involves continued investment in the Pillar5 manufacturing facility to strengthen supply capabilities and improve consistency. Management expects greater stability in the second half of FY27, supporting sequential improvements in eye care shipments, with the long-term goal of expanding capacity to fully support demand and rebuild safety stocks.

    03

    Enhanced Portfolio Diversification and Growth Opportunities

    The recent acquisitions further enhance Prestige's portfolio diversity, balancing revenue across eight categories. Breathe Right creates a new 'wellness, sleep and other' category, representing a low teens percentage of pro forma revenue, while LaCorium strengthens the skin care category. Management sees multiple avenues for long-term growth for the iconic Breathe Right brand, including leveraging its heritage through social media marketing, driving innovation (e.g., Menthol and Sport variants), and international expansion across its 20+ country presence.

    04

    Disciplined Capital Allocation and Debt Reduction

    Prestige generated a record $83.7 million in adjusted free cash flow in Q1, providing flexibility for capital allocation. The company funded the acquisitions with a new 7-year Term Loan B and priced $400 million of new unsecured notes, extending debt maturity to 2031. Management is committed to disciplined debt reduction throughout FY27, targeting a year-end leverage ratio of just below 4x, to strengthen the balance sheet and enable future capital deployment opportunities.

    05

    Consumer Environment and Channel Shifts

    In its categories, Prestige continues to observe fairly stable consumption trends, particularly strong growth in GI brands (Dramamine, Fleet) and dermatologicals (Compound W). The primary consumer behavior observed is a search for value, leading to channel shifts. The company noted strong double-digit consumption growth in e-commerce and mass channels, where price shopping is easier, indicating a continued focus on value-driven purchasing.

    AI-generated summary of the company’s earnings call. Not investment advice.