PBH - Earnings call transcript Q1 2025 | Prestige Consumer Healthcare Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Q1 2025 Prestige Consumer Healthcare, Inc. Earnings Conference Call. [Operator Instructions]

Please be advised that today's conference is being recorded. to Phil conference Relations Terpolilli, like first to and now today, speaker Vice would hand over the your Treasury. I President, Investor ahead. go Please

Philip Terpolilli

Thanks, joined who operator, to and has you thank today. everyone

are Ron the CEO; Christine our Sacco, with On Lombardi, and call CFO. Chairman, President our and me

on today's review It slide A then on and earnings Reconciliations our clicking measures webcast quarter visiting non-GAAP presentation today's presentation today's of call. financial the presentation. our On in measures. be some and today fiscal the release Please and accessed discuss information prestigeconsumerhealthcare.com, analysts. to financial the GAAP results, included call, remember questions the Investors slide nearest outlook year from contained we'll can by presentation. in are full and first link 'XX the then take accompanies includes

On and risks contemplate. These safe of statements the which today's uncertainties, a make disclosure accompanies which the on management call, complete forward-looking review and in X important to Page presentation, harbor detailed around will slide are are call.

recent environment supply and have forecasted today's to most based company information which of estimate SEC in XX-K. the available inflation, on and the best This time, is chain potential cautionary considerations any remains uncertainty are and risk impacts. at high results numerous heightened information means impact available constraints date. and as the concerning of could Business Further change statements factors recent risk our filings due most

CEO, to I'll Now hand over Ron Lombardi. our Ron? it

Ron Lombardi

Thanks, Phil.

X. Slide begin on Let's

set to back sales with exceeded earnings We expectations our start our QX May. year. encouraged are the in and

proven solid and experience continues our portfolio diverse consumption strategy trends, to investments. thanks building Our brand to

supply in million largely due $XXX Eyes were chain prior year that of declined the expected. Sales challenges Clear versus to

on trends ability with focus and However, thanks was expedite improving retailers to aligns than forecast, to our our that service. shipments better production to the impact

The and thanks than gross Meanwhile, Hydralyte led that strong in adjusted anticipated, the lower executed total, largely to with broad-based temporary In was declined $X.XX airfreight growth international brand. sales of by upside. the margin additional continued quarter forecasted. shipments from our resulted that slightly EPS than less also were a benefited

of cash in shareholder versus to the reduced a In shares deployment debt QX, maintaining that continues to capital enable year of million used prior and flow is and Free about value. while repurchasing million X.Xx. by grew million $XX $XX enhance leverage ratio we still $XX

for an let's Now Summer's update Eve. X turn Page to on

quarter, progress X health our Monistat As we represented and brands, discussed making by Summer's share distinct #X in Eve. market are women's last which is franchise,

led Eve further Our to growth. sales trends, action on steps have allowing largely to returning efforts our Summer's to stabilized Monistat focus us

consumers. feminine with sprays made to assortment Summer's Eve wipes, Within hygiene wide from in offers shown category away needs. due product numerous to on-the-go brand, one other and are offerings factors. X as the this of continue comprehensive hygiene connection It most a on separate washes, consumer our the in long pie heritage the left, designed of up face products for from begins with feminine on-the-go and mists offerings certain pressure shifts at sprays behavioral such sprays trends for

each especially and sales set new of performing growth. a factors marketing other will drive new brand of and return sales, XX% make well form believe comparatively about We the which cloth washes, hand, to these growth. are On for up and are innovation long-term help up

with communicating and its For gets connecting back media Summer's consumers highlights protection around Eve, benefit the campaign our consumer brand's odor heritage on based confidence. to of freshness latest and and key

brand reducing us utilizes launches formula, which new build of and building patented place last progresses. leaves is the of year that years. put one this odor emphasizes campaign The right a and should recent we've of several product the momentum the as our Ultimate the This Eve Protection, Summer's one launch is in Odor attribute with best-performing conviction

business turn the remains let's hydration of to exercise Australia. with occasions product great an that The update it it of tasting Hydralyte. turn immediately is a portion history our a and Hydralyte, X defines XX-plus investors Australians for efficacious market, not in majority sport numerous Now a sales and for heat. With on large that the Slide are familiar the A year brand & category to recognize our and majority in our U.S. brand excessive usage sickness, of for and the to a continue International in represents reminder oral Australia. like

focuses clear #X with than to its building grow continues Hydralyte to consumers Leveraging as mid-teens using the rates continue just CAGR, both hydrate ways recently, and penetration Compared improving more grown Most finding thanks market. expanding yield to both Hydralyte brand its market efforts years proven as category digital touch usage emphasize the Hydralyte core to on share results. with robust tactics. efforts points. has through to reason retail position, water brand These well household within to its ago, a the Australian at X

for We geographic growth with with see tactics these opportunities along beyond Zealand. Australia New long-term a further and runway

I'll With through to that, financials. Chris it to pass the walk

Christine Sacco

everyone. morning, Thanks, Ron, and good

results. quarter Let's financial X first turn and Slide to fiscal 'XX review our

release. QX currency. prior X.X% includes closest As our the measure certain effects is to X.X% reconciled the non-GAAP in foreign the of $XXX.X $XXX.X of GAAP in year from the presentation and information information million excluding million a reminder, revenue earnings in today's that declined

As by and both expected, EBITDA costs. timing change quarterly declined QX from in certain of prior majority revenue year, the EPS the the driven with the and lower of

detail to these for results. Slide XX consolidated around turn Let's

the increased fiscal segment QX year. By America decreased International prior year. FX, 'XX excluding our segment North highlighted, just segment, X.X% decreased I and X.X% organically revenues prior X% the As revenues versus versus revenues

demand. Stye care strength exceed in anticipated QX TheraTears, expectations, helped earlier, primarily our supply performance rapidly Ron in This meet offerings pressure in product as we along owing our the on-the-go Debrox and in offset more planned cough/cold was Ron the declines sales Eve to discussed, and cold This brands. and categories of with and to cough ordering to more move faced ear well impact Eyes category. our As constrained noted performance retail Summer's customers health our forecast ability continued we by exceeded eye Clear than to women's as than category where as

savings quarter Clear the partially and and the continued product, the which gross impressive inflation Total use airfreight higher the flat due below the experienced offset efforts. only year double-digit We approximately to XX.X% higher but cost online prior year-over-year pricing actions was in on margin growth cost e-commerce continuing channel, Eyes purchasing. in trend long-term was cost first sequentially, of company of of by

higher more fiscal gross pricing anticipate We airfreight the that we full year, driven cost due inflationary the increase and costs the prior from a XX% incurred by actions still savings of approximately year QX. headwinds. be in cost For than expect to now to the offset margin

gross QX approximately margin is estimated be to XX.X%.

and was as marketing sales, million As of approximately dollars in percentage coming $XX sales. at expected, a and or in up of advertising XX.X%

For year. sales versus up A&M fiscal and anticipate of prior of over just XX% rate 'XX, the in dollars an we still

We in QX still certain sales. as of due to expenses of were sales the a X.X% XX.X% G&A expenses. approximately G&A anticipate percent of of full year timing

of $X.XX timing G&A costs revenues, of and compared in EPS lower air QX $X.XX spend. the year, the the Adjusted of and A&M impact to freight from prior down

'XX, adjusted approximately EBITDA fiscal growth to X% full margin with consistent of For expect well in our as low year we long-term as to EPS X% the an mid-XXs, trends.

effects of from the the expense approximately $XX of below our line, interest reduction benefited debt million looking Finally, efforts. continued

item, tax of normalized Our for of large 'XX. do repeating. tax QX anticipate anticipate XX.X% remaining quarters just adjusted tax an discrete We rate of under we XX% unusually not rate fiscal excluded a the

XX million turn QX, in the flow. cash we cash discuss year. and to free up $XX.X Slide double In prior digits let's Now flow, versus generated

are cash maintaining $XXX to year continue the outlook or our full maintain million industry-leading of We for free and more. flow

At June $X.X maintained fixed, which we net approximately leverage debt XX, ratio our and covenant-defined of X.Xx. $X of a is billion, billion was

repurchases and of for to we XXX,XXX for fiscal opportunistically quarter, the remainder million the 'XX. approximately In $XX continue evaluate repurchased we'll further shares

With to turn it that, back Ron. I'll

Ron Lombardi

Thanks, Chris.

to turn Let's XX Slide up. wrap to

good and year to business our is a building momentum, Our fiscal start. off is

reaffirming health to offset care supply to in helping that chain eye our headwinds thanks year We is outlook, near-term care. leading portfolio are consumer and our diverse full

and 'XX, we fiscal For revenue growth 'XX. $XXX $X.XXX billion, million, approximately again billion organic to of We're X% continue versus fiscal $X.XXX down year-over-year, to Eyes due anticipate revenues timing. revenues of of to Clear slightly QX expecting

retailers to Clear improve ways into shipments support Eyes look in-stock continue levels. to We to for

may change this into full However, year sales first the shift the outlook, half. half doesn't but the second from

the anticipate EPS adjusted of we to year. EPS, to $X.XX full For continue for $X.XX

of EPS For $X.XX [ QX, ]. anticipate we'd

with more to continue has for $XXX of flow the our capital we the optionality of value cash or anticipate that deployment history free benefit million maximizing of shareholders. Lastly,

up I'll open that, With for Operator? it questions.

Operator

comes with from Parikh [Operator Oppenheimer. Instructions] Rupesh The first question

Rupesh Parikh

So to resolving sounds just track supply are supply on the you that in it guys back going as from issue like guys your chain chain, the expected. you commentary,

have seen basis? is as loss? on exactly the And would Or for Just expected then consumption shelf confirm as you that. at the guys have category, to look any want eye you you out it share playing

Ron Lombardi

bit of freight ability to an in saw in at sooner QX, terms stuff about chain, Rupesh, to what terms Eyes the in to a the see be production. we Clear the line of we're in the than we to half continue And May air a back of into supply quarter as in get use by just in versus with talked air looking use I we end we to freight. the can the if bit continuing more anticipated. originally prepared was first the what half remarks, second said get

supply this chain on at Clear Eyes point. track So

about feel continue We it. to good

to in be at making focusing product Eyes positioned In consumption, got sure shelf. Clear terms been shelf. that of on we've We've continues available at share well

meet the all at SKUs, can consumer SKUs So that maybe demand not the but shelf.

so far and consumption share. so good terms of So, in

Rupesh Parikh

one And follow-up then just question. maybe

looks concerns some CVS chain. like channel, pharmacy it rationalizing on stores, Walgreens supply is their given the Just closing

within about any inventory inventory forward? how in do guys concerns feel Just destocking going you pharmacy? And the channel about

Ron Lombardi

big haven't some other growth total. this way from going then activities may industry, it's others Yes. in, inventory and on in channels seen on At thing more the be at point, reducing this other in offset headwinds play is some total, in in have don't And a I'll we the by you from Certainly, that other that's point. categories in hearing really we any being retailers what channels. cough/cold comment

out. positioned that well So we'll But see we at to continue point, that. plays this to through get be how

Rupesh Parikh

my given just consumer. some then there out And the on final concerns question, just

categories, quarter? label your or are at any you shifts this seeing new during other consumer look any you dynamics to As past private

Ron Lombardi

Yes.

rather historically about they value in consumers bought is for for talked seen buy. the than what we've brand what change where we've Rupesh, of any better shifting quarters, they looking over that As the last couple buy, they

So few a look health at or believe we taking your point, to of that to family, it's care the pennies. change place save continue a make this your in someone or you last

Operator

Next with question comes from Susan Canaccord Anderson Genuity.

Susan Anderson

just decline trend as was give the I idea I America we look terms a North into should business, next was versus due Women's quarter? to cold/cough versus wondering of guess, the us we the of season? expect Health can an you Eyes weaker much And same maybe how in Clear that

Ron Lombardi

Yes.

So little you bit beginning. time at of a have we hearing a the hard

you're and what sales behind year-over-year? Susan, little makeup a us think, I give decline the asking to detail drove

Susan Anderson

X those Yes, correct. Between things.

Christine Sacco

It's Chris.

was versus be So remarks, to Health. the expected, the second headwind as cough/cold and of year down strong categories, saw Health, able in last the Debrox eye drive the of And we're commented right? the be the Health, the about eye if have Women's would expecting improvement I be from as say, category The as categories trends the it and and care Cough/cold, and of down Ron to prepared see first going as FX in to for, expected. still look you'll remember, sequential flat the in a improvement, planning the to $X seeing quarter. Women's you prior a slightly, bit quarter his million. we year, little second versus We're bit to again, in mentioned expected, to improvement but heard, second various to is these down -- versus similarly performance what's in care comps Women's challenged quarter, remarks, TheraTears, as but Stye. seasonality that ear likely we also quarter in

So that portfolio cylinders. in on all hitting really brands all the

Susan Anderson

Okay. guess Great. And I follow-up. then a just maybe

impact we it business, freight care expect up yet. do expect are eye the plants should on second necessarily gross And air quarter? margin So more I manufacturing to that like quite Is running the them and guess, And sounds correct? you to not be? the when guys in

Ron Lombardi

Yes.

be anticipated. of levels to line really production end what So through with continue we in the July

So we've up as on earlier, they'll anticipate the And we quarter, expected, freight year as think I both we service be to continue anticipate largely output for X to we continues. air they're again and second suppliers, additional the levels. level as got ramp that the and continuing then focus mentioned to some

So help on. we're can in with back that's get get going to out to we retailers expedite, be shelf, and to what the if it focused in-stock at it

Christine Sacco

that's And in obviously included guide. our

Operator

next question The D.A. with from Linda Davidson. Bolton-Weiser is

Linda Bolton-Weiser

Yes.

So kind of I a tell pretty still was shed had the like are Or why it more you Eyes, issues? retailers the but enough wondering, picture, some on give strong actually. so the I POS a look for you on POS good? little it how doesn't actually Clear that so actually look Can data data, the inventory? there light even in look though can oddly terms channel just Is of little does track just whole know which color really strong supply does strong

Ron Lombardi

Yes.

So our consumption is shipments into Clear Eyes. retailers for the outpacing

So making that on so product can shelf. we've focused that part sure some something is we of we've it. at And ship there's first that's the been the second available got

marketplace. the us. up at a well out for some We've that there's that new So are for the what's and really, there is driving product to And when we've for showing new here continuation which some that nothing there really do shelf got it's consumers It's the going performance products brand. consumption. on strong in continue of had for while campaigns window, them,

Linda Bolton-Weiser

incident exactly And just given you mean is and it's the commented actions Can you on Health the among I stabilizing what I Okay. know then incidents Women's illness business? on taken largely by by that of kind has refresh Monistat business, stabilized. driven that us just women. -- that

that that? So what can be actions taken you've are marketing controlled? So how that the have stabilized that

Ron Lombardi

Yes.

of things. couple a So

was messaging marketing last campaign to the year and First, better consumers. the connect with the refined over

So our years X which the you're year, [indiscernible] of really parts than on kind levels. that the point And X of Linda, right, got Monistat line incident doing well. business. ago. digital really We've more there's is linked a incident of to we've it products and TV there's is messaging was it And then where level, boric out, new number is then products of cure, the got care wash, acid X.X

but one to growth. it's it's be turns that Monistat that thing repositioned So brand elements those around, never have the around really it for positioned back

focused element really that the focus us we're the We're XX on-the-go to get and it's get more continue then on get to to into continue prepared wipes we make digital on are And on it. I Summer's out and progress And that new market to leader right? for that products remarks, messaging share as good segment with there. than we with segment, and and Eve, up revived, to mentioned to that growth, wash to back

Operator

question Anthony Sidoti from Lebiedzinski next Your & Instructions] Co. with [Operator comes

Anthony Lebiedzinski

you bit a offset details I more margin? freight a the air some little just pricing partial And as impact gross as first, on give far actions. of of your there know So can was

a So bit as would you could those if more X things, to be be little great. specific that

Christine Sacco

it's Chris. Anthony, Yes.

difference the So was and had for air delta XX.X% quarter, entire air freight our guided first there. really to the to difference the We freight expectations. was

Anthony Lebiedzinski

gave Okay. then what Chris. color expect All the And right. to you you That's second so some know very guys I helpful, quarter. for as

your guidance, year reaffirmed You full obviously.

bit be to you as something second as shift update balance a for of how we else QX half our sales you had there about and look quarter. there from, for recalibrate year far Ron, the out we can guess, there the the I little that to QX, back you mentioned might fiscal and year? call know and I a from think of could as the of look the to we back anything half models the at cadence the earnings? look models of add to as our But So fiscal anything

Christine Sacco

Anthony. Yes,

you we're comps quarter But the we're be to half just the quarters. 'XX. specific lapping of from remind going of I obviously, that the not would fiscal So giving guide fourth a back to

Anthony Lebiedzinski

you. Got Okay.

All lastly easy then You'll fourth have in And well. for the right. an me. comp quarter as

As your can in again quarter. you far up was that far International that level here ability internationally? performance the or as your the as and call as so Anything segment, out confidence sustain to ability

Christine Sacco

Anthony. Yes,

up. in highlighted digits comps. So the those you few Hydralyte, the brands impressive coming really a off growth Sales International, of period. and were now up as mentioned double we A were geographies has had on call, nice in few growth. of other had years

an We Australia, real is had have brand a quarter. in a called care strong that eye Zaditen allergy

So segment, reason the similar results, of to our that, I over have there diversified anytime America. in can organically, expected, we're that's down soon. what in think no a in X-plus think up to with We confident portfolio to really North going as And X.X% slow algorithm we And that percent. our continue. feel here International line long-term

Operator

comes The next Pinheiro & Sturdivant Mitchell from Co. question with

Mitchell Pinheiro

I down curious, that the oral why understand weakness care, curious, and it, And significantly, in consecutive second have didn't then double-digit cold was but was why cough large. I was there? also I mid-teens. quite down quarter in declines. it's may I really of missed

Ron Lombardi

Last seasonality. year, start I'll historic really cough/cold retailer were level a still of comp than here, with, for So it's order Mitch, issue the right? the different patterns

So issue us. a it's for comp really

We expect cough/cold seasonal of stuff. a more trend for

shipments the how And our see out. wait play be quarter preseason end the QX, really the for But of timing whole then will Chris early to the see segment cough/cold the at retailers. And our we'll goes. for performance buys where year. last see as down for oral to mentioned year, it's first of QX. levels we year versus anticipate maybe flat that we'll whole into We'll care, the incident then tail So slightly the that earlier,

into is and again, So another outpacing shipments consumption where retailer. consumption, just the our -- example

timing a issue. it's So

Mitchell Pinheiro

-- Are But with needs-based with say they are for of any buying or I or mean, asking having back with I more portfolio. pricing but get in obviously, helping stores I see there your anything? conversations sort for -- And Okay. or or any regarding discounts either in have than customers branded. don't needs-based they a you're promotions normal? But asking -- anything of don't are -- a pressure, to price consumers you so more terms is promotion

Ron Lombardi

change that Mitch. like has aisles not food no different Really of We're dynamic, impact kind of in a that those store. Yes. the part inflation the had where -- on

us, work For to consumers brands we're that needs-based, products looking and for for with are trusted them. proven have those

So point, that dynamic. changing haven't seen really at we in this any of kind

Christine Sacco

that, original from and talked volume. our price we highlight of growth from to half guide, in Mitch, about expecting half our about

So still have growth, now anticipating we're volume several which for years. we

some than to point, think, I hearing you may others. different a So highlight categories be other Ron's about little from

Mitchell Pinheiro

What And G&A, that the caused quarter? Chris, costs up. it's on then, discrete the this items little were bump or

Christine Sacco

Yes.

really the I of timing down that step nothing, initiatives, within for just expect one year, remainder to the thing timing. no now the just So of G&A.

Mitchell Pinheiro

And then you comments. in could anything I'd the environment unusual hear out finally, or quarter? change to that last just love M&A over the -- your just call Any

Christine Sacco

the with to No, consistent what the Yes. pipeline we've seen years. continues be over

at things, look to continue remain we'll and We disciplined.

for we'll to M&A seeing, keep a quarter. our investing But we've kind paid We have #X We been in allocation after of our and lot some flow right? cash allocation debt, continue during capital change some as repurchased Mitch. We down to shares, priority what no brands. optionality the of

Operator

with William from Instructions] [Operator Trevor Blair. Sahr question next comes Our

Trevor Sahr

This is Jon. Trevor for on

the of scanning some Would for here an of hear one the bit of and just and Kind little performance. me. the Just a love categories overview. to at question through looking category XX-Q

is these, at Looking and up A are and care the of as of outperforming. lot some well. other quite ones ear eye performing

segmenting lapping? these portfolio? level, you're are kind other leading I rest some broadly walked any in you kind term these what information and category quarter. the a of They're the could seeing high or through them. declines, that some think of short long-term you couple of impacts from provide detail to of across Just over we of of But if a the the are

Ron Lombardi

got first brands start our this the the got cough/cold funny with, care funny talked And morning. and we've for but So portfolio. the for big I'll mentioned, our year-over-year going overall that different we've of them I a just oral of trends all, some were stuff comp generally think reasons, as and those about for already things you comp declines some drivers consumption on, good we few about feel We behind categories.

being supply the the the is more strong challenges Chris it's Clear as offset business to good than performance then performance continues X% Eyes, do to Debrox the Stye, in have International have out. And and and the of but We in eye in performance. way by really in which driver majority mentioned very earlier, chain TheraTears, at category call ear

the quarter our when the chain. at So or the of a around continue supply plus with lot you Clear category of to this I would to so look listen noise Eyes why is of you full encourage year performance, which offset X% guidance

So going on good with feel again, what's here. we

Operator

I'm showing at questions this time. further no

I like comments. to closing the over to So CEO, now Lombardi, call for Ron back turn would

Ron Lombardi

Have providing you, a and Thank morning, us update everyone QX. great forward and to joining look for after day. thanks this another we operator, to

Operator

today's your in This conference. participation you the for Thank does program. conclude

disconnect. now may You

Prestige Consumer Healthcare (PBH) 8 Aug 242025 Q1 Earnings call transcript