Prestige Consumer Healthcare (NYSE:PBH) released its quarterly earnings results on Thursday, revealing a decline in earnings per share and revenue. The company reported earnings of $1.14 per share for the quarter, falling short of analysts’ expectations, which had set the consensus at $1.16. In terms of revenue, Prestige generated $283.44 million, below the anticipated $286.93 million, according to FiscalAI.
The company’s net margin stood at 18.09%, with a return on equity of 12.43%. This quarter’s performance marks a year-over-year decline in revenue of 2.4%, compared to the same period last year when it recorded earnings of $1.22 per share.
Operational Insights and Future Guidance
In light of the recent results, Prestige Consumer Healthcare has updated its fiscal year 2026 guidance, now projecting earnings per share to be between $4.54 and $4.54. During the conference call, management highlighted improvements in the supply chain for its Clear Eyes product. They anticipate further progress in the upcoming quarter and throughout calendar year 2026, following the acquisition of Pillar Five and the installation of a new high-speed production line aimed at enhancing internal production capabilities and expanding product offerings.
The company reported a decline in Q3 revenue of $283.4 million, which represents a 2.4% decrease year-over-year, or 2.2% when excluding foreign exchange impacts. The drop in revenue was largely attributed to supply constraints for Clear Eyes and a general softness in categories such as analgesics and cough and cold products.
Despite the revenue challenges, Prestige Consumer Healthcare continues to generate strong cash flow, with year-to-date free cash flow reaching $208.8 million, reflecting a 12.9% increase. This robust cash generation supports the company’s careful capital allocation strategy, which includes the recent acquisition of Pillar Five for approximately $110 million and the repurchase of over $150 million in shares, amounting to around 5% of its outstanding shares. The firm’s net debt remains around $1 billion, with a leverage ratio of approximately 2.6x.
Market Reaction and Analyst Opinions
Following the earnings announcement, shares of Prestige Consumer Healthcare declined by 2.2%, closing at $65.58. During trading, 528,495 shares changed hands, surpassing the average volume of 378,281 shares. Over the past year, the stock has seen a low of $57.25 and a high of $90.04. The company currently has a market capitalization of $3.15 billion and a price-to-earnings ratio of 16.27.
Several institutional investors have recently adjusted their holdings in Prestige Consumer Healthcare. For instance, CIBC Private Wealth Group LLC increased its stake by 142.8% in the third quarter, now owning 1,100 shares valued at approximately $69,000. Other notable transactions include new positions acquired by CIBC Bancorp USA Inc. and Danske Bank A S, with the latter estimated at $37,000.
On Wall Street, analysts have mixed views on the company’s performance. Weiss Ratings reiterated a “hold” rating, while Oppenheimer lowered its price target from $82.00 to $72.00 while maintaining an “outperform” rating. Other firms, including Zacks Research and Canaccord Genuity Group, have also provided updated ratings, with Zacks upgrading the stock from “strong sell” to “hold.” Currently, the stock holds a consensus rating of “Moderate Buy” with an average price target of $84.50.
Prestige Consumer Healthcare, a leading manufacturer of branded over-the-counter healthcare products, focuses on a diverse range of consumer health needs, including pain relief, cold and cough remedies, and eye care. Key brands in its portfolio include Clear Eyes, Carmex, and Monistat. As the company navigates its current challenges, stakeholders will be watching closely for further developments in its operational strategy and market performance.
