Prestige Consumer Healthcare Inc. (PBH)·Q1 2026 Earnings Summary

Executive Summary

• Q1 FY2026 revenue of $249.5M and diluted EPS of $0.95 declined year over year due to Clear Eyes supply constraints and an expected headwind from Q4 accelerated order timing; gross margin improved YoY and free cash flow was solid at $78.2M .
• The company announced a definitive agreement to acquire Pillar5 Pharma (current Clear Eyes supplier) to secure near-term supply and expand long-term sterile ophthalmic capacity; transaction expected to be approximately neutral to EPS and close in Q3 FY2026, subject to conditions .
• FY2026 guidance was lowered: revenue to $1,100–$1,115M (from $1,140–$1,155M) and diluted EPS to $4.50–$4.58 (from $4.70–$4.82); free cash flow of ≥$245M maintained .
• Relative to S&P Global consensus, Q1 missed on revenue ($249.5M vs $260.4M*) and EPS ($0.95 vs $0.992*), driven by eye care supply shortfalls; back-half supply acceleration and Pillar5 acquisition are key narrative catalysts for a recovery .

What Went Well and What Went Wrong

What Went Well

• International OTC segment revenue grew 6.1% YoY to $37.0M, driven by broad-based geographic growth .
• Gross margin expanded YoY, and non-GAAP EBITDA margin improved to 31.9% in Q1 FY2026 from 29.8% in Q1 FY2025; operating income was stable at $71.8M .
• Management delivered strong operating cash flow ($79.0M) and free cash flow ($78.2M), supported by working capital timing and lower interest expense .
• Quote (CEO): “We experienced momentum… including strong international segment growth, year-over-year improvement in gross margin, and solid quarterly free cash flow.”

What Went Wrong

• Clear Eyes supply constraints reduced shipments and were the primary driver of the 6.6% YoY revenue decline; North American OTC revenue fell to $212.6M (from $232.3M) largely due to Eye & Ear Care .
• The company absorbed an expected headwind from Q4 FY2025 accelerated order timing, impacting Q1 comparability .
• Guidance was lowered for FY2026 (revenue and EPS), reflecting eye care supply shortfalls expected to persist in H1; organic growth outlook moved to an approximate 1.5%–3.0% decrease from prior +1%–2% .

Financial Results

Consolidated Performance vs Prior Quarters and Estimates

Notes: * Values retrieved from S&P Global.

Segment Revenue Breakdown

KPIs

Guidance Changes

Earnings Call Themes & Trends

Note: The Q1 FY2026 earnings call transcript could not be retrieved due to a source database inconsistency; themes below reflect press release commentary and recent quarters’ disclosures.

Management Commentary

• “We experienced momentum in multiple areas of our business in the first quarter… strong international segment growth, year-over-year improvement in gross margin, and solid quarterly free cash flow. Unfortunately, these positives were offset by Clear Eyes supply constraints…” — Ron Lombardi, CEO .
• “As part of a long-term strategy to expand eye care production capacity, the Company has entered into a definitive agreement to acquire Pillar5 Pharma… The transaction is expected to be approximately neutral to EPS and is expected to close in the third quarter fiscal 2026…” .
• “We now anticipate revenue of $1,100 to $1,115 million… we still anticipate year-over-year growth from an acceleration of supply in eye care in the second half… we now anticipate EPS of $4.50 to $4.58… Our free cash flow forecast of $245 million or more is unchanged.” .
• FY2026 macro context previously acknowledged: approximately $15M tariff-related inflationary headwind expected; plan to manage costs via portfolio strength and supply chain agility .

Q&A Highlights

• The Q1 FY2026 earnings call transcript was not retrievable due to source database inconsistency; Q&A highlights could not be synthesized. We verified multiple retrieval attempts for the Q1 FY2026 transcript (Document ID 9) without success.

Estimates Context

• Q1 FY2026 vs Street: revenue $249.5M vs $260.4M* (miss); EPS $0.95 vs $0.992* (miss); EBITDA $79.6M vs $82.9M* (miss). Primary driver: Clear Eyes supply constraints and Q4 order timing shift; management expects supply acceleration in H2 FY2026 aided by Pillar5 .
• Consensus revision risk: FY2026 revenue/EPS likely revised down inline with updated guidance; FCF outlook unchanged at ≥$245M may limit downside to valuation anchored on cash yields .

Notes: * Values retrieved from S&P Global.

Detailed Q1 FY2026 vs Estimates

Notes: * Values retrieved from S&P Global.

Key Takeaways for Investors

• The quarter’s misses were supply-driven rather than demand-driven; International strength and gross margin expansion underpin earnings resilience despite North American eye care headwinds .
• Guidance reset reduces near-term expectations; management’s H2 supply acceleration and Pillar5 acquisition provide a tangible path to recovery in Clear Eyes shipments and mix normalization .
• Free cash flow remains robust ($78.2M in Q1; FY2026 ≥$245M maintained), supporting deleveraging and capital allocation (repurchases and strategic M&A) even through transitory headwinds .
• Watch for Q3 FY2026 close of Pillar5 and subsequent eye care supply ramp as catalysts; operational execution at the acquired facility is key to achieving the back-half recovery .
• Tariff-related cost headwinds (~$15M in FY2026 initial outlook) and inflation remain watch items, but portfolio breadth and pricing/efficiency actions have historically mitigated macro pressure .
• Near-term trading: sentiment likely hinges on evidence of eye care supply recovery; back-half visibility and any incremental guidance updates should drive stock directionality .
• Medium-term thesis: durable FCF, deleveraging to ~2.4x, and disciplined capital allocation support valuation; supply normalization could re-rate margins and earnings power once execution at Pillar5 is proven .