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Prestige Consumer (PBH) Stock Up on Q4 Earnings & Revenue Beat

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Prestige Consumer Healthcare Inc. (PBH - Free Report) posted strong fourth-quarter fiscal 2022 results. During the quarter, both the top and bottom lines beat the Zacks Consensus Estimate and grew year over year. This marks the company’s 13th straight quarter of a revenue beat. Prestige Consumer benefited from its vast brand portfolio and solid business strategy, which helped it register a double-digit increase in revenues, earnings and cash flows. Shares of PBH rallied 7.2% during the after-market trading session on May 5.

Quarter in Detail

Prestige Consumer posted adjusted earnings of 91 cents per share, which surpassed the Zacks Consensus Estimate of 89 cents. The bottom line advanced 15.2% from the 79 cents recorded in the year-ago period.

Total revenues grew 12.3% to $266.9 million and beat the Zacks Consensus Estimate of $258 million. Excluding currency impacts and contributions from the Akorn buyout, revenues rose 5.9%. Revenues were backed by strength in key brands, with improved demand across certain categories, brands and channels that were hurt by the pandemic in the year-ago period (such as cold & cough products).
 
The gross profit was $148.9 million, up from the $137.1 million reported in the year-ago period. The operating income of $77.4 million increased from roughly $71 million in the same period last year.

Segmental Performance

Revenues in the North American OTC Healthcare segment were $232.9 million, up 10.1% year over year, driven by the solid performance in the majority of its key brands and favorable demand in certain categories (like cough & cold and motion sickness), which were earlier impacted by COVID-19. Gains of about $16 million from the Akorn acquisition also aided segmental growth.

Revenues in the International OTC Healthcare segment were $34 million, up 29.4% from the year-ago quarter’s figure of $26.3 million. The uptick can be attributed to higher consumer activity in Australia, which led to a significant spike in demand for Hydralyte and other pandemic-impacted brands.

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Financial Updates

Prestige Consumer exited the quarter with cash and cash equivalents of about $27.2 million, long-term debt (net) of $1,476.7 million and total shareholders’ equity of $1,577.6 million.

Net cash provided by operating activities in the quarter under review was $63.1 million. The adjusted free cash flow for the same time frame was $60 million. In fiscal 2022, the adjusted free cash flow amounted to $253.7 million. The adjusted free cash flow is anticipated at $260 million or more for fiscal 2023. As of Mar 31, 2022, PBH’s net debt position was roughly $1.5 billion.

On May 3, 2022, management authorized share buybacks up to $50 million valid till May 2023.

Guidance

Prestige Consumer delivered a robust fiscal 2023 performance despite the resurgence of COVID-19 cases, supply-chain headwinds and cost inflation. The company was in line with its long-term strategy, deploying its capital well by acquiring TheraTears and solidifying its eyecare portfolio.

Based on a robust fiscal 2022 show, management expects fiscal 2023 to witness continued growth. Management anticipates organic sales growth in the range of 2-3%, backed by its brand-building efforts and pricing actions. It expects to witness a manageable inflationary and supply-chain landscape due to which it envisions the operating profit growth to be at or a little more than its rate of sales. The solid guidance is likely to keep helping the company lower debt and undertake other strategic capital utilization moves.  

For fiscal 2023, Prestige Consumer anticipates revenues in the range of $1,120-$1,130 million compared with the $1,086.8 million reported in fiscal 2022. Also, PBH envisions adjusted earnings per share (EPS) in the band of $4.18-$4.23 compared with the $4.06 recorded in fiscal 2022.

This Zacks Rank #3 (Hold) stock has dipped 6.4% in the past three months compared with the industry’s decline of 12.9%.

Stocks to Consider

Some better-ranked stocks are Funko, Inc. (FNKO - Free Report) , GIII Apparel (GIII - Free Report) and Delta Apparel (DLA - Free Report) .

Funko, the pop culture consumer products company, currently sports a Zacks Rank #1 (Strong Buy). Shares of Funko have declined 3.2% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Funko’s 2022 sales and EPS suggests growth of 22.6% and 26.8%, respectively, from the year-ago reported figure. FNKO has a trailing four-quarter earnings surprise of 96.2%, on average.

GIII Apparel, which designs, sources and markets women's and men's apparel, sports a Zacks Rank #1 at present. Shares of GIII Apparel have moved down 2.8% in the past three months.

The Zacks Consensus Estimate for GIII Apparel’s fiscal 2022 sales and EPS suggests growth of nearly 10% and 5.4%, respectively, from the year-ago reported number. GIII has a trailing four-quarter earnings surprise of 160.6%, on average.

Delta Apparel, which designs, manufactures, sources and markets activewear and lifestyle apparel products, sports a Zacks Rank #1 at present. Shares of Delta Apparel have moved down 3.3% in the past three months.

The Zacks Consensus Estimate for Delta Apparel’s fiscal 2022 sales and EPS suggests growth of 14.2% and 20.1%, respectively, from the year-ago reported figure. DLA has a trailing four-quarter earnings surprise of around 41.1%, on average.