Executive Summary
In Q1 2025, Prestige Consumer Healthcare Inc (PBH) reported revenues of $267.1 million, reflecting a 4.4% decline from $279.3 million in the prior year. This drop was primarily due to supply chain constraints notably affecting their Clear Eyes product line. However, management expressed optimism about the overall performance, citing better-than-expected impacts from international growth, especially from the Hydralyte brand. The adjusted EPS stood at $0.90, down from $1.06 last year, yet reiterated a full-year EPS growth forecast of 5% to 6%. The company continues to demonstrate solid cash flow capabilities, with free cash flow reaching $54 million, enabling them to reduce debt and repurchase shares. Management remains committed to long-term growth despite facing near-term challenges.
Key Performance Indicators
QoQ: -12.30% | YoY:-15.43%
Key Insights
1. **Revenue**: $267.1M (down 4.4% YoY)
2. **Net Income**: $49.07M (down 7.9% YoY)
3. **Adjusted EPS**: $0.90 (down 15.1% YoY)
4. **Free Cash Flow**: $54M (up double-digits YoY)
5. **Debt Reduction**: $35M in Q1 2025, maintaining a leverage ratio of 2.8x
6. **Gross Margin**: 54.7%, expected to average 56% for the fiscal year
7. **Operating Margin**: 26.9%
8. **Inventory Turnover**: 0.834, reflecting inventory aging concerns.
The decline in revenues has been attributed to ongoing ...
Financial Highlights
1. Revenue: $267.1M (down 4.4% YoY)
2. Net Income: $49.07M (down 7.9% YoY)
3. Adjusted EPS: $0.90 (down 15.1% YoY)
4. Free Cash Flow: $54M (up double-digits YoY)
5. Debt Reduction: $35M in Q1 2025, maintaining a leverage ratio of 2.8x
6. Gross Margin: 54.7%, expected to average 56% for the fiscal year
7. Operating Margin: 26.9%
8. Inventory Turnover: 0.834, reflecting inventory aging concerns.
The decline in revenues has been attributed to ongoing supply chain issues and a decrease in sales from the cough-cold and women’s health segments. Key brands such as Clear Eyes and Monistat are under pressure, prompting management to focus on supply chain optimization and marketing strategies to stabilize and grow these segments.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
267.14M |
-4.36% |
-3.56% |
| Gross Profit |
140.32M |
-9.28% |
-3.98% |
| Operating Income |
72.05M |
-15.43% |
-12.30% |
| Net Income |
49.07M |
-7.90% |
-0.79% |
| EPS |
0.98 |
-8.41% |
-1.01% |
Key Financial Ratios
operatingProfitMargin
27%
operatingCashFlowPerShare
$1.1
freeCashFlowPerShare
$1.08
Management Commentary
1. Supply Chain Management: CEO Ron Lombardi noted, "Q1 exceeded our sales and earnings expectations...Our diverse portfolio continues to experience solid consumption trends thanks to our proven brand-building strategy and investments."
2. Product Performance: The Hydralyte brand revealed robust international growth potentials. Lombardi shared that ‘Hydralyte continues to emphasize the reason to hydrate with more than just water.’
3. Future Guidance: CFO Christine Sacco stated, "For full-year fiscal '25, we expect adjusted EPS growth of approximately 5% to 6%."
These insights reflect management's strategic focus on resiliency amidst supply chain challenges and their commitment to brand innovation.
"Our business is building momentum, and our fiscal year is off to a good start. We are reaffirming our full-year outlook thanks to our diverse and leading consumer health care portfolio that is helping to offset near-term supply chain headwinds in eye care." - Ron Lombardi
— Ron Lombardi
"We experienced impressive double-digit year-over-year growth in the e-commerce channel, continuing the long-term trend of higher online purchasing." - Chris Sacco},
— Chris Sacco
Forward Guidance
The management's outlook remains cautiously optimistic, reaffirming revenue guidance of $1.125 to $1.14 billion for fiscal 2025. They anticipate Q2 2025 revenues slightly declining due to the timing of Clear Eyes shipments. However, management expects a rebound with adjusted EPS guidance of $4.40 to $4.46. The anticipated gross margin for the year is about 56%, benefiting from pricing actions and cost savings that would offset inflation. The company also underscores the importance of focusing on brand positioning and growth initiatives for women’s health and oral care products moving forward.