Prestige Consumer Healthcare (PBV) Q2 2027 Earnings Report

The call was predominantly positive: the company exceeded second-quarter sales and earnings expectations, reported strong profitability, maintained healthy base-business consumption trends, and described both acquisitions as performing well. eCommerce, key GI brands, international brands, and long-term Clear Eyes opportunities were also highlighted. The principal negative was Clear Eyes production volatility, which reduced the full-year outlook and limited near-term sales, while working-capital timing and higher interest expense pressured cash flow and EPS. Overall, the positive operating and acquisition trends significantly outweighed the identified challenges.

For fiscal 2027, the company now expects full-year revenue of $1.28 billion-$1.29 billion, which equates to about 2% organic growth, excluding Clear Eyes, including approximately $190 million of revenue from Breathe Right and LaCorium; Clear Eyes sales are now forecast at less than $20 million for the full year, with limited improvement in the second half expected. Q3 revenue is expected to be approximately $328 million, with organic revenue decreasing year-over-year, and adjusted diluted EPS is expected to be $4.48-$4.55 for the full year and $1.05 for Q3. The company expects adjusted gross margin of just over 57% for the full year and just over 58% gross margin for the remainder of the year, an A&M rate of approximately 14.5% of sales, adjusted G&A of approximately 10% as a percent of sales, interest expense of approximately $104 million, amortization expense of $32 million, adjusted free cash flow of $265 million or more, and a year-end leverage ratio of approximately four times; long-term CapEx is expected to be 1%-3% of sales, with the company taking a look at $26 million for this year.