PBH Q1 2027 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: Approximately $266 million, up 6.5% from $249.5 million in Q1 2026. Excluding foreign currency effects and the Breathe Right acquisition, organic growth was 3.2%.

Adjusted EPS: Increased to $0.98, a 3% rise from $0.95 in the prior year.

Adjusted EBITDA: Grew 5.5% in line with sales growth.

Adjusted Free Cash Flow: Reached a record $83.7 million, with expectations of at least $270 million for fiscal 2027.

Gross Margin: Approximately 55%, flat sequentially but down 120 basis points year-over-year due to higher transportation costs.

Net Debt: Approximately $2 billion, with a leverage ratio expected to be just below 4x by year-end.

2Strategic Updates and Business Highlights

Acquisitions: Completed the acquisition of the Breathe Right portfolio and LaCorium Health, expected to contribute approximately $190 million in revenue for fiscal 2027.

Integration Progress: Breathe Right integration is largely complete, while LaCorium's integration will continue over the fiscal year.

Product Performance: Strong growth in GI brands (Dramamine and Fleet) and skin care (Compound W). However, Clear Eyes faced supply volatility, impacting sales negatively.

Investment in Manufacturing: Continued investment in the Pillar5 facility to enhance eye care capacity and stabilize supply for Clear Eyes.

3Forward Guidance and Outlook

Fiscal 2027 Revenue Guidance: Updated to $1.29 billion to $1.315 billion, maintaining organic growth expectations of 1% to 3%.

Q2 Revenue Expectation: Projected between $328 million and $331 million, with a modest organic revenue decline anticipated due to retailer order timing.

Adjusted EPS Guidance: Expected to be between $4.55 and $4.65 for the full year, with Q2 EPS anticipated at approximately $1.06 to $1.08.

4Bad News, Challenges, or Points of Concern

Clear Eyes Performance: The brand is currently underperforming, representing less than 3% of sales due to supply chain issues. The recovery is expected to take multiple years.

Market Volatility: Ongoing uncertainties in the business environment due to supply chain constraints, inflation, and geopolitical events could impact future results.

Retailer Order Timing: Benefited Q1 results but is expected to negatively impact Q2, indicating potential fluctuations in sales.

5Notable Q&A Insights

Acquisition Growth: Management remains optimistic about the long-term growth potential of Breathe Right and LaCorium, with expected contributions of 10% total growth over the next several years.

Consumer Environment: Consumption remains stable, but there is a noted shift towards value-oriented shopping channels.

Pricing Strategy: Minimal pricing benefit in Q1, with about 25% of projected growth for the year expected to come from price increases due to inflationary pressures.

Integration Confidence: Management expressed confidence in handling the integration of both acquisitions simultaneously, leveraging existing resources and infrastructure. Overall, PBH reported a strong start to fiscal 2027, driven by strategic acquisitions and solid performance in key product categories, while also navigating challenges with specific brands and market conditions.