Executive Summary
In Q1 2026, Prestige Consumer Healthcare Inc reported revenues of approximately $249.5 million, marking a 6.6% decline year-over-year primarily due to significant supply chain challenges in its eye care segment, particularly for its flagship product, Clear Eyes. Despite the revenue miss against prior guidance of $258-$260 million, the company achieved gross margins of 56.2%, enhanced by continued cost-saving efforts. EPS remained resilient at $0.95, reflecting a 6% improvement versus the prior year's adjusted EPS of $0.90. Management expressed commitment to strategizing around supply chain disruptions, notably with the acquisition of Pillar5 to bolster production capabilities. The company anticipates recovery in the second half of the fiscal year as supply improves.
Key Performance Indicators
QoQ: -15.91% | YoY:-6.59%
QoQ: -23.08% | YoY:-3.69%
QoQ: -18.85% | YoY:-0.40%
Key Insights
**Revenue:** $249.5 million (YoY: -6.6%, QoQ: -15.9%)
**Gross Profit:** $135.1 million (YoY: -3.69%, QoQ: -23.08%)
**Operating Income:** $71.8 million (YoY: -0.4%, QoQ: -18.85%)
**Net Income:** $47.5 million (YoY: -3.3%, QoQ: -5.3%)
**EPS:** $0.95 (YoY: +6%)
**Gross Margin:** 56.2% (up 150 basis points YoY)
**Free Cash Flow:** $78 million, a quarterly record, positioning the company for strategic investments.
Management noted a leverage ratio of approximately 2.4x, indicating prude...
Financial Highlights
Revenue: $249.5 million (YoY: -6.6%, QoQ: -15.9%)
Gross Profit: $135.1 million (YoY: -3.69%, QoQ: -23.08%)
Operating Income: $71.8 million (YoY: -0.4%, QoQ: -18.85%)
Net Income: $47.5 million (YoY: -3.3%, QoQ: -5.3%)
EPS: $0.95 (YoY: +6%)
Gross Margin: 56.2% (up 150 basis points YoY)
Free Cash Flow: $78 million, a quarterly record, positioning the company for strategic investments.
Management noted a leverage ratio of approximately 2.4x, indicating prudent debt management during a challenging operational environment.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
249.53M |
-6.59% |
-15.91% |
| Gross Profit |
135.15M |
-3.69% |
-23.08% |
| Operating Income |
71.76M |
-0.40% |
-18.85% |
| Net Income |
47.47M |
-3.26% |
-5.31% |
| EPS |
0.96 |
-2.10% |
-5.01% |
Management Commentary
Supply Chain Initiatives: Management outlined decisive steps to mitigate supply issues, specifically within eye care: '...the first phase of this was to bring on 2 new suppliers...the second supplier is on track to begin supply in early Q3...'
Gross Margin Performance: 'We experienced gross margin expansion of 150 basis points to 56.2%, thanks to ongoing cost-saving efforts...'
Revenue Forecasts: 'For fiscal '26, we now anticipate revenues of $1.1 billion to $1.115 billion...'
Free Cash Flow Focus: 'In Q1, we generated $78 million in free cash flow, driven largely by the timing of working capital...'
Market Position Concerns: '...we still had decent supply and availability at shelf...but that all changed in late May...a significant decrease...in our share.'
"We experienced gross margin expansion of 150 basis points to 56.2%, thanks to ongoing cost-saving efforts..."
â Ron Lombardi, CEO
"In Q1, we generated $78 million in free cash flow..."
â Christine Sacco, CFO
Forward Guidance
Management has provided an updated revenue forecast expecting approximately $1.1 billion to $1.115 billion for fiscal 2026, primarily influenced by expected recovery in supply chain capabilities in the eye care segment starting in H2 2026. The company anticipates diluted EPS to range between $4.50 to $4.58 and expects free cash flow to remain strong at $245 million for the full year, suggesting a robust capital deployment ability post-acquisition of Pillar5. Key areas to monitor will include the recovery trend in retail order patterns and the performance of international markets which have shown promise with 7% growth in Q1.