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Prestige Consumer (PBH) Beats Q1 Earnings & Revenue Estimates

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Prestige Consumer Healthcare Inc. (PBH - Free Report) posted first-quarter fiscal 2022 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and grew year over year. Notably, this marks the company’s 10th straight quarter of a revenue beat. Results gained from the company’s brand-building strategy, market share gains in its leading brands, and a significant increase in the demand in certain categories and channels. Encouragingly, management raised its fiscal 2022 guidance.

This Zacks Rank #3 (Hold) stock has gained 22.5% in the past three months against the industry’s decline of 23.6%.

Quarter in Detail

The company posted adjusted earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate of 86 cents. The bottom line advanced 32.6% year over year.

Total revenues grew 17.3% to $269.2 million and beat the Zacks Consensus Estimate of $234 million. Strength in key brands, driven by a healthy demand across certain categories and channels, aided top-line growth.

Gross profit was $159 million, up 18.8% year over year. Gross margin expanded 70 basis points to 59.1%. Adjusted EBITDA was $99 million, up 13.1% year over year. However, adjusted EBITDA margin contracted 140 bps to 36.8%.

 

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Image Source: Zacks Investment Research

 

Segmental Performance

Revenues in the North American OTC Healthcare segment were $242.4 million, up from the year-ago quarter’s $210.7 million, driven by a solid performance in key brands, which, in turn, was fueled by the demand in certain categories.

Revenues in the International OTC Healthcare segment were $26.8 million, up from the year-ago quarter’s figure of $18.7 million. The uptick can be attributable to higher consumer activity in Australia, which led to a significant spike in the demand for Hydralyte and other COVID-impacted brands. Gains from foreign currency of nearly $3 million also aided segmental growth.

Financial Updates

The company exited the quarter with cash and cash equivalents of $163.6 million, long-term debt (net) of $1,545.4 million, and total shareholders’ equity of $1,416.2 million.

Net cash provided by operating activities in the quarter under review was $69.3 million. Adjusted free cash flow for the same time frame was $67.8 million. Free cash flow is now anticipated to be $245 million or more for fiscal 2022, up from the earlier mentioned $225 million.

As of Jun 30, 2021, the company’s net debt position was $1.4 billion. Also, management increased debt outstanding by $65 million in the reported quarter for the expected completion of the TheraTears acquisition. TheraTears and other brands, acquired on Jul 1, are likely to add $40 million of revenues and 7 cents of adjusted earnings per share to fiscal 2022 results.

Prestige Consumer Healthcare Inc. Price, Consensus and EPS Surprise

 

Guidance

Driven by impressive quarterly results, the continued recovery of COVID-impacted brands and positive business momentum; management raised its fiscal 2022 view. The company now anticipates revenues of $1,045 million or more, up from the earlier mentioned $957-$962 million. Organic growth is projected to be 6%, which reflects a sharp improvement from the previously communicated 1.5-2%. Finally, the company envisions adjusted earnings per share of $3.90 or more, up from $3.58 or more mentioned before.

The Zacks Consensus Estimate for earnings is pegged at $3.60. In fiscal 2021, Prestige Consumer’s top and bottom lines were at $943.4 million and $3.24 per share, respectively.

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Crocs (CROX - Free Report) currently has an impressive long-term earnings growth rate of 15% and a Zacks Rank #2.

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