Prestige Consumer Healthcare (NYSE:PBH) reported a 6.5% increase in fiscal 2027 first-quarter revenue to $265.7 million, bolstered by strategic acquisitions and strong category performance. The company raised its full-year financial outlook, citing the integration of the Breathe Right and LaCorium Health portfolios while maintaining its steady organic growth projections.
Financial Performance and Growth Drivers
The company’s revenue growth from $249.5 million in the prior-year period was supported by a 3.2% increase in organic revenue, excluding foreign exchange impacts and the Breathe Right acquisition. Profitability also saw an uptick, with adjusted diluted earnings per share (EPS) rising to $0.98 from $0.95, and adjusted EBITDA climbing 5.5%.
“Our business exceeded sales and earning expectations in the first quarter,” said Ron Lombardi, Chairman, President and CEO. “We also delivered record adjusted free cash flow, providing additional flexibility for disciplined capital allocation moving forward.”
Category Performance and Supply Chain Challenges
North American organic revenue grew by 4.2%, driven by strong demand for gastrointestinal brands like Fleet and Dramamine, alongside dermatological successes from Compound W. While TheraTears and Debrox also performed well, these gains helped offset supply-constrained weakness in the Clear Eyes brand.
Management is actively investing in the Pillar5 sterile ophthalmic manufacturing facility to stabilize Clear Eyes production. While output variability is expected through the first half of fiscal 2027, the company anticipates sequential improvements in eye-care shipments in the second half of the year. Currently representing less than 3% of sales, the restoration of Clear Eyes is described as a multiyear initiative involving safety stock replenishment and renewed marketing investment.
Strategic Acquisitions: Breathe Right and LaCorium
Prestige finalized the acquisition of the Breathe Right portfolio on June 12 and LaCorium Health on July 1. Breathe Right contributed $5.9 million to the first-quarter results and is expected to generate approximately $200 million in annual revenue. Integration of this portfolio, including new product lines like Breathe Right Menthol and Sport, is largely complete.
LaCorium Health, based in Australia, is projected to add roughly $40 million in annualized revenue. Its Dermal Therapy brand strengthens Prestige’s position in therapeutic skincare. Over the next two years, the company expects to realize synergies through sales-force integration and supply-chain optimization.
Margin Outlook and Cash Flow
Adjusted gross margin held steady at 55% during the quarter, though it faced a 120-basis-point dip compared to the previous year due to transportation costs and product mix. Looking ahead, Prestige forecasts an adjusted gross margin of slightly over 57% for the remainder of the fiscal year, driven by the higher margins of the newly acquired businesses.
The company achieved a record $83.7 million in adjusted free cash flow, prompting an upward revision of its full-year guidance to at least $270 million. With a net debt of approximately $2 billion at the end of June, the company has refinanced its debt profile, with the earliest maturity now pushed to 2031.
Fiscal 2027 Projections
Prestige has updated its fiscal 2027 revenue guidance to a range of $1.290 billion to $1.315 billion. While organic revenue growth expectations remain at 1% to 3%, the report acknowledges that consumers are becoming increasingly value-focused. Despite a potential slight dip in organic revenue for the second quarter due to order timing, the company remains confident in its overall growth trajectory for the first half of the year and beyond.