PBH Stock Up on Q1 Earnings and Revenue Beat, Fiscal '27 View Raised

PBH’s Segment Performance Shows Broad Strength

North American OTC Healthcare revenues increased 6.4% year over year to $226.2 million. The gain reflected strong organic sales growth in Gastrointestinal, Dermatological and Cough, Cold & Allergy, along with contribution from the newly created Wellness, Sleep & Other category. Management highlighted continued strength in Dramamine and Fleet, while Compound W drove Dermatological growth.

International OTC Healthcare revenues increased 6.9% to $39.5 million, aided by a $1.4 million contribution from the acquired Breathe Right brand. On an organic basis, International revenues declined 2.1%. Management said positive consumption trends were offset by distributor order timing and continues to expect the segment to return to its long-term organic revenue growth target of 5% or more for fiscal 2027.

Prestige Consumer’s Margins Stay Under Pressure

Adjusted gross margin was 55%, down 120 basis points (bps) year over year. Management attributed the year-over-year pressure mainly to higher transportation costs and mix, while noting that the margin was roughly flat sequentially and in line with expectations.

During the quarter, advertising and marketing expenses declined 0.8% to $34.7 million, while general and administrative expenses increased 52.2% to $43.3 million. Adjusted operating income totaled approximately $81.0 million, up 5.3% year over year. The adjusted operating margin contracted about 30 bps to 30.5% from 30.8% a year ago.

PBH’s Financial Details

Prestige Consumer exited the fiscal first quarter of 2027 with cash and cash equivalents of $89.1 million compared with $63.9 million at the end of fiscal 2026. 

Net cash provided by operating activities totaled $70.8 million, down from $79.0 million in the prior-year period.

PBH Raises Its Fiscal 2027 Outlook

Prestige raised fiscal 2027 revenue guidance to $1.290-$1.315 million (previously $1.100-$1.121 million). The increase entirely reflects the Breathe Right and LaCorium acquisitions, while organic revenue growth guidance remains unchanged at 1%-3%. The Zacks Consensus Estimate for revenues is currently pegged at $1.10 billion.

Adjusted earnings guidance increased to $4.55-$4.65 from the earlier $4.42-$4.51 range. The Zacks Consensus Estimate was pegged at $4.45 for the metric.

For the fiscal second quarter, management expects revenues of $328-$331 million and adjusted earnings of $1.06-$1.08 per share. The consensus mark for second-quarter top and bottom lines stands at $276.41 million and $1.06, respectively.

PBH Moves Quickly on Recent Acquisitions

The Breathe Right portfolio acquisition closed in June and is expected to generate about $200 million in annual revenues. Management said the major integration milestones are largely complete, with the business operating through Prestige’s systems and warehouse network.

LaCorium Health closed in July and is expected to contribute about $40 million in annualized revenues. Prestige plans to integrate the Australian therapeutic skin care business over the balance of fiscal 2027 and expects future opportunities from distributor optimization, sales integration and other operating efficiencies.

Our Take

Prestige Consumer exited the fiscal first quarter with both earnings and revenues beating estimates. Performance reflected broad-based strength across the portfolio, wherein Gastrointestinal and Dermatological brands led growth, while TheraTears and Debrox helped offset continued Clear Eyes supply variability.

The newly closed acquisitions of LaCorium Health and the Breathe Right portfolio bring distinct advantages that are expected to help enhance its business for the long term. Prestige Consumer is also investing in its Pillar5 sterile ophthalmic facility to strengthen supply quality and expand capacity.

However, the contraction of adjusted gross and operating margins in the quarter is discouraging.

PBH’s Zacks Rank & Key Picks

Prestige Consumer currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the broader medical space are Labcorp Holdings LH, Quest Diagnostics DGX and Medpace MEDP.

Labcorp, carrying a Zacks Rank #2 (Buy), reported second-quarter 2026 adjusted EPS of $4.99, which surpassed the Zacks Consensus Estimate by 4.18%. Revenues of $3.73 billion beat the Zacks Consensus Estimate by 0.36%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

LH has an earnings yield of 5.9% compared with the industry’s 4.1% yield. The company's earnings beat estimates in each of the trailing four quarters, the average surprise being 3.09%.

Quest Diagnostics, carrying a Zacks Rank #2 at present, posted second-quarter 2026 adjusted EPS of $3.12, exceeding the Zacks Consensus Estimate by 11%. Revenues of $3.04 billion topped the Zacks Consensus Estimate by 2.1%.

DGX has an earnings yield of 4.7%, almost in line with the industry’s yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 5.77%.

Medpace, carrying a Zacks Rank #2 at present, posted second-quarter 2026 adjusted EPS of $4.25, exceeding the Zacks Consensus Estimate by 4.17%. Revenues of $707.3 million outperformed the consensus mark by 1.12%.

MEDP has an historical five-year earnings growth rate of 30.5% compared with the industry’s 5.6% growth. In the trailing four quarters, the company delivered an average earnings beat of 10.16%.

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