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Prestige Consumer Healthcare Attributes Soft Results to Low Eye Care Sales, Weak Consumer Backdrop

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Prestige Consumer Healthcare Attributes Soft Results to Low Eye Care Sales, Weak Consumer Backdrop

Prestige Consumer Healthcare's (PBH) officials said Thursday that weak eye care sales and a difficult consumer backdrop drove disappointing fiscal fourth-quarter results at the consumer healthcare products company.

Prestige late Wednesday reported adjusted earnings of $1.23 per share on revenue of $281.6 million. Analysts polled by FactSet expected $1.39 and $293.6 million. The company owns brands including motion sickness treatment Dramamine and Goody's pain relievers.

Fourth-quarter revenue was particularly impacted by lower eye care sales, while some international sales were affected by shipping disruptions caused by the Middle East conflict, Chief Financial Officer Christine Sacco said on an earnings call on Thursday, according to a FactSet transcript.

"The difficult consumer environment persisted into (the fourth quarter) and was further impacted by global conflict," Chief Executive Ron Lombardi told analysts. "While these dynamics led to certain shipment disruptions late in the quarter, we expect to return to organic growth in fiscal 2027 and are well-positioned to manage ongoing macro pressures, including inflation as we have successfully done in the past."

Sales for the Clear Eyes brand were below expectations due to delayed shipments and production shutdowns ahead of line updates, Lombardi said on the call.

The company's shares plummeted 10% in Thursday trade, bringing their year-to-date decline to nearly 25%.

Prestige guided adjusted EPS for the year ending March 2027 in the range of $4.42 to $4.51 on sales between $1.10 billion and $1.12 billion. The current consensus on FactSet is for non-GAAP EPS of $4.74 and revenue of $1.17 billion.

Oppenheimer said it expected a below-consensus guide, but "this was worse than we envisioned," according to a note. The brokerage downgraded its rating on the company's stock to perform from outperform and removed the $65 price target.

Prestige on Wednesday announced a deal to acquire LaCorium Health for about $150 million in cash. The transaction is expected to close in the second quarter of fiscal 2027.

Prestige previously agreed to buy the Breathe Right brand from Foundation Consumer Healthcare.

"With management now digesting two acquisitions, Clear Eyes execution challenges in recent quarters, higher levels of leverage, and a more uncertain consumer backdrop, we see a weaker outperformance case," Oppenheimer analysts, including Rupesh Parikh, said.

Price: $47.49, Change: $-4.33, Percent Change: -8.35%

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