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Prestige Consumer Healthcare Inc. (PBH - Free Report) posted second-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 11th straight quarter of revenue beat. Results gained from the company’s brand-building strategy, strong consumption trends, market share gains in its leading brands, and a significant increase in the demand in certain categories and channels.
The company witnessed higher-than-anticipated recovery in COVID-impacted areas. Gains from the acquisition of TheraTears also contributed to quarterly results. Encouragingly, management raised its fiscal 2022 guidance.
This Zacks Rank #3 (Hold) stock has gained 4.9% in the past three months against the industry’s decline of 4.3%.
Image Source: Zacks Investment Research
Quarter in Detail
The company posted adjusted earnings of $1.02 per share, which surpassed the Zacks Consensus Estimate of 99 cents. The bottom line advanced 30.8% year over year.
Total revenues grew 16.3% to $276.2 million and beat the Zacks Consensus Estimate of $261 million. Strength in key brands, driven by healthy demand across certain categories and channels, aided top-line growth.
Adjusted gross profit was $159.3 million, up 15.7% year over year. The adjusted gross margin contracted 30 basis points to 57.7%. Adjusted EBITDA was $92.7 million, up 14.9% year over year. However, the adjusted EBITDA margin contracted 40 bps to 33.6%.
Segmental Performance
Revenues in the North American OTC Healthcare segment were $251.7 million, up from the year-ago quarter’s $216.6 million, driven by a solid performance in the majority of its key brands and favorable demand in certain categories, which were earlier impacted by COVID-19. Gains of $12.4 million from the Akorn acquisition also aided segmental growth.
Revenues in the International OTC Healthcare segment were $24.5 million, up from the year-ago quarter’s figure of $20.8 million. The uptick can be attributable to higher consumer activity in Australia, which led to a significant spike in demand for Hydralyte and other COVID-impacted brands. Gains from foreign currency of $0.5 million also aided segmental growth.
Financial Updates
The company exited the quarter with cash and cash equivalents of $42.8 million, long-term debt (net) of $1,593 million, and total shareholders’ equity of $1,461.6 million.
Net cash provided by operating activities in the quarter under review was $61.2 million. Adjusted free cash flow for the same time frame was $61.9 million. Adjusted free cash flow is anticipated to be $245 million or more for fiscal 2022. As of Sep 30, 2021, the company’s net debt position was $1.6 billion.
Prestige Consumer Healthcare Inc. Price, Consensus and EPS Surprise
Driven by the impressive quarterly results, the continued recovery of COVID-impacted brands and positive business momentum, management raised its fiscal 2022 view.
The company anticipates revenues of $1,050-$1,060 million or more, up from the earlier mentioned $1,045 million. Organic growth is projected to be 7%, reflecting a sharp improvement from the previously communicated 6%. Gains from the Akorn acquisition are likely to contribute $40 million to the top line.
Finally, the company envisions adjusted earnings per share of $3.93-$3.98 or more, up from $3.90 or more mentioned before. In fiscal 2021, Prestige Consumer’s top and bottom lines were $943.4 million and $3.24 per share, respectively. The gross margin is forecast to be 57% for fiscal 2022 and 56% for the second half of fiscal 2022. This includes elevated costs and supply-chain disruptions.
For third-quarter fiscal 2022, management expects revenues of $260 million or more. Adjusted earnings are expected to be 88 cents for fiscal 2022, while the metric is predicted to grow in double-digits in the second half of fiscal 2022.
Image: Bigstock
Prestige Consumer (PBH) Tops Q2 Earnings & Revenue Estimates
Prestige Consumer Healthcare Inc. (PBH - Free Report) posted second-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 11th straight quarter of revenue beat. Results gained from the company’s brand-building strategy, strong consumption trends, market share gains in its leading brands, and a significant increase in the demand in certain categories and channels.
The company witnessed higher-than-anticipated recovery in COVID-impacted areas. Gains from the acquisition of TheraTears also contributed to quarterly results. Encouragingly, management raised its fiscal 2022 guidance.
This Zacks Rank #3 (Hold) stock has gained 4.9% in the past three months against the industry’s decline of 4.3%.
Quarter in Detail
The company posted adjusted earnings of $1.02 per share, which surpassed the Zacks Consensus Estimate of 99 cents. The bottom line advanced 30.8% year over year.
Total revenues grew 16.3% to $276.2 million and beat the Zacks Consensus Estimate of $261 million. Strength in key brands, driven by healthy demand across certain categories and channels, aided top-line growth.
Adjusted gross profit was $159.3 million, up 15.7% year over year. The adjusted gross margin contracted 30 basis points to 57.7%. Adjusted EBITDA was $92.7 million, up 14.9% year over year. However, the adjusted EBITDA margin contracted 40 bps to 33.6%.
Segmental Performance
Revenues in the North American OTC Healthcare segment were $251.7 million, up from the year-ago quarter’s $216.6 million, driven by a solid performance in the majority of its key brands and favorable demand in certain categories, which were earlier impacted by COVID-19. Gains of $12.4 million from the Akorn acquisition also aided segmental growth.
Revenues in the International OTC Healthcare segment were $24.5 million, up from the year-ago quarter’s figure of $20.8 million. The uptick can be attributable to higher consumer activity in Australia, which led to a significant spike in demand for Hydralyte and other COVID-impacted brands. Gains from foreign currency of $0.5 million also aided segmental growth.
Financial Updates
The company exited the quarter with cash and cash equivalents of $42.8 million, long-term debt (net) of $1,593 million, and total shareholders’ equity of $1,461.6 million.
Net cash provided by operating activities in the quarter under review was $61.2 million. Adjusted free cash flow for the same time frame was $61.9 million. Adjusted free cash flow is anticipated to be $245 million or more for fiscal 2022. As of Sep 30, 2021, the company’s net debt position was $1.6 billion.
Prestige Consumer Healthcare Inc. Price, Consensus and EPS Surprise
Prestige Consumer Healthcare Inc. price-consensus-eps-surprise-chart | Prestige Consumer Healthcare Inc. Quote
Guidance
Driven by the impressive quarterly results, the continued recovery of COVID-impacted brands and positive business momentum, management raised its fiscal 2022 view.
The company anticipates revenues of $1,050-$1,060 million or more, up from the earlier mentioned $1,045 million. Organic growth is projected to be 7%, reflecting a sharp improvement from the previously communicated 6%. Gains from the Akorn acquisition are likely to contribute $40 million to the top line.
Finally, the company envisions adjusted earnings per share of $3.93-$3.98 or more, up from $3.90 or more mentioned before. In fiscal 2021, Prestige Consumer’s top and bottom lines were $943.4 million and $3.24 per share, respectively. The gross margin is forecast to be 57% for fiscal 2022 and 56% for the second half of fiscal 2022. This includes elevated costs and supply-chain disruptions.
For third-quarter fiscal 2022, management expects revenues of $260 million or more. Adjusted earnings are expected to be 88 cents for fiscal 2022, while the metric is predicted to grow in double-digits in the second half of fiscal 2022.
3 Better-Ranked Stocks to Consider
PVH Corp (PVH - Free Report) currently sports a Zacks Rank #1 (Strong Buy) and has a long-term earnings growth rate of 59.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Gildan Activewear (GIL - Free Report) presently has an impressive long-term earnings growth rate of 28% and a Zacks Rank #2 (Buy).
Lululemon Athletica (LULU - Free Report) has a long-term earnings growth rate of 20%. The company has a Zacks Rank #2 at present.