Prestige Consumer (PBH) Q2 Earnings Surpass Mark, Revenue Rises
Prestige Consumer Healthcare Inc. PBH released second-quarter fiscal 2023 results, in which the high and low beat Zacks’ respective consensus estimate. Revenues have increased year on year. This is PBH’s sixth consecutive quarter of earnings and revenue. Prestige Consumer continued to benefit from its portfolio of brands and a solid commercial strategy.
Quarter in detail
Prestige Consumer reported earnings of $1.02 per share, which beat Zacks’ consensus estimate of $1.00. Net income was stable year-on-year.
Total revenue rose 4.7% to $289.3 million and topped Zacks’ consensus estimate of $283 million. Excluding currency effects, revenues jumped 5.5%. Revenues were supported by the strength of the majority of its key brands and a strong performance in the international OTC segment.
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Gross profit was $161 million, up from $157.7 million reported a year ago. Adjusted EBITDA of $91.8 million increased from $83.9 million for the same period last year. In addition, the adjusted EBITDA margin of 31.7% increased by 130 basis points compared to the figure for the quarter of the previous year.
Revenue from the North American over-the-counter healthcare segment was $252.1 million, compared to $251.7 million in the prior quarter. The strength of key brands, primarily in the Gastrointestinal and Analgesics categories, drove revenues.
International OTC Healthcare segment revenue was $37.2 million, up 51.9% from $24.5 million in the prior year quarter. The rise can be attributed to an increase in demand for Hydralyte, partly countered by currency headwinds of $1.4 million.
Prestige Consumer ended the quarter with cash and cash equivalents of $42.4 million, long-term debt (net) of $1,438.3 million and total equity of $1,619.8 million. of dollars.
Net cash provided by operating activities in the first six months of 2022 was $115.8 million. Adjusted free cash flow for the same period was $112.4 million. Adjusted free cash flow is expected to be $260 million or more for fiscal 2023.
During the second fiscal quarter, Prestige Consumer repurchased 0.2 million shares for $12.3 million. In the first six months, it repurchased 0.9 million shares for $50 million, completing its previously authorized share repurchase program.
Management reiterated its guidance for fiscal 2023, even amid a buoyant supply chain and inflationary scenario, based on its strong portfolio and three-pillar business strategy. These include strengthening the brand, maintaining a strong financial position and optimizing capital allocation.
Management continues to expect organic sales growth in the range of 2-3% for fiscal 2023. For the full fiscal year, Prestige Consumer expects revenue in the range of $1,120-1,130 million , versus $1,086.8 million in fiscal 2022. PBH still expects earnings per (EPS) in the range of $4.18 to $4.23, versus $4.06 recorded in fiscal year 2022.
The stock currently Zacks Rank #4 (Sell) has lost 7.9% over the past three months, against an industry decline of 5.3%.
3 Consumer Discretionary Stocks to Note
Here we have highlighted three top ranked stocks namely, Oxford Industries OXM, lululemon athletic LULU and wedges CAL.
Oxford Industries, which designs, sources, markets and distributes lifestyle products and other brands, currently sports a Zacks #1 (Strong Buy) rating. OXM has a last four quarter earnings surprise of 91.1% on average. You can see the full list of today’s Zacks #1 Rank stocks here.
The Zacks consensus estimate for OXM’s current year EPS suggests growth of 31.2% from the number reported a year ago.
lululemon athletica is a yoga-inspired sportswear company. LULU currently has Zacks Rank #2 (Buy).
Zacks’ consensus estimate for lululemon Athletica’s current-year sales and EPS suggests growth of 26.7% and 27%, respectively, over the corresponding figures for the prior year. LULU has a surprise on earnings for the last four quarters of 10.4% on average.
Caleres, a shoe retailer, currently has a Zacks rank of 2. CAL has a trailing four-quarter earnings surprise of 34.9% on average.
Zacks’ consensus estimate for Caleres’ current year sales and EPS suggests growth of 5.6% and 0.9%, respectively, over the corresponding figures for the prior year.
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