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Prestige Consumer Healthcare Inc. (PBH)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY26 revenue of $274.1M beat internal outlook and Street consensus, driven by Clear Eyes supply timing and retailer order timing; GAAP diluted EPS was $0.86 and adjusted diluted EPS $1.07, with GAAP EPS below consensus but adjusted EPS ahead of management’s expectations .
  • Guidance: FY26 revenue unchanged at $1.100–$1.115B; adjusted EPS tightened to $4.54–$4.58 (raised high end); FY26 FCF $245M+ maintained; Q3 guide set at ~$282M revenue and $1.14 EPS .
  • Operationally, e-commerce consumption remained double-digit and DenTek dental guards gained >5pts market share on omnichannel campaign; 1H FCF rose ~10% to $133.6M; leverage stable at 2.4x; Q2 share repurchases totaled $75M (1.1M shares) .
  • Key near-term swing factor is Clear Eyes capacity: two new suppliers are online and Pillar5 high-speed line ramping; management expects sequential improvement Q3 over Q2 and Q4 over Q3, with shelf space recovery as service stabilizes .

What Went Well and What Went Wrong

What Went Well

  • Revenue and adjusted EPS exceeded internal expectations on timing benefits; CEO: “Our second quarter results surpassed our sales and earnings expectations helped primarily by Clear Eyes supply timing and the timing of certain retailer orders” .
  • Robust cash generation and capital return: 1H operating cash flow $136.5M and FCF $133.6M; Q2 buybacks ~$75M (1.1M shares), 1H ~$109.8M (1.6M shares) .
  • Strategic brand momentum: e-commerce consumption grew double-digit; DenTek guards campaign delivered >5pt share gain and >1B impressions; management reiterated portfolio brand-building success .

What Went Wrong

  • Clear Eyes supply constraints weighed on revenue YoY (-3.4%) and GAAP EPS ($0.86 vs $1.09 PY), and pressured Eye & Ear Care category; management acknowledged shelf-space and share losses during the constraint period .
  • International segment saw timing headwinds in distributor orders and lower Eye & Ear Care sales in Q2; expected to improve with supply normalization .
  • Q3 set-up includes reversal of Q2 timing: ~$5M Clear Eyes shipped late in Q2 will reduce Q3, and an e-commerce order pull-forward in September will adjust in Q3; A&M spend to peak >15% of sales in Q3 .

Financial Results

MetricQ4 FY2025Q1 FY2026Q2 FY2026
Revenue ($USD Millions)$296.5 $249.5 $274.1
Diluted EPS ($USD)$1.00 $0.95 $0.86
Adjusted Diluted EPS ($USD)$1.32 $0.95 $1.07
Gross Profit ($USD Millions)$170.0 $140.3 $151.6
Operating Income ($USD Millions)$88.4 $71.8 $79.7
EBITDA (Non-GAAP) ($USD Millions)$92.0 $79.6 $86.8
Net Income ($USD Millions)$50.1 $47.5 $42.2

Estimates vs Actual (Q2 FY26):

MetricStreet ConsensusActual
Revenue ($USD Millions)$257.24*$274.11
Primary EPS ($USD)$0.97*$0.86
# of Estimates (EPS / Revenue)7* / 8*—

Values retrieved from S&P Global.*

Segment revenue breakdown:

Segment Revenue ($USD Millions)Q2 FY2025Q1 FY2026Q2 FY2026
North American OTC Healthcare$239.8 $212.6 $230.8
International OTC Healthcare$44.0 $37.0 $43.4

Key KPIs:

KPIQ4 FY2025Q1 FY2026Q2 FY20261H FY2026
Free Cash Flow ($USD Millions)$58.37 $78.18 $55.38 $133.56
Net Debt ($USD Billions)——~$0.9 ~$0.9
Leverage (covenant-defined, x)——2.4x 2.4x
Share Repurchases (Shares / $USD)——~1.1M / ~$75.0M ~1.6M / ~$109.8M
Gross Margin (%)——55.3% 55.7%
A&M as % of Sales——14.1% 14.1%
G&A as % of Sales——10.2% 10.8%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2026$1,100–$1,115M $1,100–$1,115M Maintained
Organic Revenue GrowthFY2026~(-1.5%) to (-3.0%) ~(-1.5%) to (-3.0%) Maintained
Adjusted Diluted EPSFY2026$4.50–$4.58 $4.54–$4.58 Raised high end
Free Cash FlowFY2026$245M+ $245M+ Maintained
Gross MarginFY2026~56.5% (initial outlook) ~56.5% reiterated Maintained
A&M % of SalesFY2026~14% (initial outlook) ~14% FY26; Q3 >15% Maintained; Q3 step-up
Tax RateRest of FY2026~24% normalized ~24% remaining quarters Maintained
Tariff Cost AssumptionFY2026~$15M (initial) ~$5M latest forecast Lowered
RevenueQ3 FY26—~$282M New
Adjusted EPSQ3 FY26—$1.14 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY2025, Q1 FY2026)Current Period (Q2 FY2026)Trend
Clear Eyes supply chainPlan to add suppliers; capacity recovery mainly in 2H FY26 Two new suppliers online; Pillar5 high-speed line starting; sequential improvement expected Q3→Q4; end-FY all changes in place Improving capacity; recovery underway
Shelf space/share for Clear EyesN/AShelf-space/share lost during constraints; recovery as service normalizes Recovering as supply stabilizes
E-commerce channelQ4 shipments outpaced consumption (timing); double-digit growth Double-digit consumption growth; Q3 adjustment after September order timing Strong consumption; order variability persists
Tariffs/macroFY26 gross margin plan includes ~$15M tariffs; cost-savings and surgical pricing levers Latest full-year tariff cost ~$5M; diversified domestic supply and exemptions (USMCA) Reduced tariff headwind
International segmentFY25 growth >5%; Hydralyte strength Q2 impacted by distributor timing; expect improvement; long-term ~5% growth Stable algorithm; near-term timing noise
Capital allocationDeleveraging, buybacks, M&A flexibility 1.6M shares repurchased 1H; pipeline disciplined; Pillar5 ~$100M funded primarily with cash Continued optionality
Innovation/brand-buildingMultiple launches; women’s health stabilization DenTek guards campaign; broad omnichannel reach Active marketing execution
Regulatory/M&AAnnounced Pillar5 acquisition Pillar5 closing expected Q3; integration to secure sterile eye capacity Closing imminent

Management Commentary

  • CEO on Q2 drivers: “Our second quarter results surpassed our sales and earnings expectations helped primarily by Clear Eyes supply timing and the timing of certain retailer orders” .
  • CEO on FY26 outlook: “We are reaffirming our fiscal 2026 net sales outlook… For profitability, we are now expecting earnings per share at the higher end of our previous range as well as free cash flow of $245 million or more” .
  • CFO on margin/expenses: “We still expect a 56.5% gross margin for the year, with a Q3 gross margin of approximately 56%.… For fiscal 2026, we now anticipate an A&M percentage of approximately 14%, while Q3 A&M is expected to be… over 15% of sales” .
  • CEO on capital returns: “We were out in the market opportunistically buying back our shares… about 2% of our float during the quarter” .
  • CFO on Pillar5 financing: “Primarily cash on hand” .

Q&A Highlights

  • Clear Eyes timeline and shelf space: Sequential improvement Q3→Q4; retailers adjusted shelf during constraints; recovery expected as service stabilizes .
  • Q3 setup: ~$5M of Clear Eyes shipments late in Q2 reduce Q3; e-commerce order patterns to adjust in Q3; Q3 EPS guided to $1.14 .
  • Margin trajectory: 1H gross margin up 60bps; bigger step-up in Q4 from timing of cost savings; international margins to improve as warehouse transition costs fade .
  • Tariffs: Latest full-year cost forecast ~$5M (reduced from prior $15M) with mitigations via cost savings and selective pricing .
  • Capital allocation and M&A: Balanced approach with buybacks and cash build; disciplined M&A pipeline; Pillar5 close expected Q3 (~$100M) .

Estimates Context

  • Q2 FY26 revenue beat consensus ($274.1M vs $257.24M*) and GAAP EPS missed ($0.86 vs $0.97*). Adjusted EPS of $1.07 benefited from timing and lower interest but Street tracks GAAP primary EPS, so the headline was a mixed print . Values retrieved from S&P Global.*
  • Estimate count: 7 EPS and 8 revenue estimates*; expect revisions to raise revenue run-rate modestly while trimming near-term GAAP EPS given timing reversals into Q3. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Mixed headline: revenue beat and adjusted EPS strong vs internal expectations, but GAAP EPS miss vs Street; near-term trading likely sensitive to Q3 order timing reversal and Clear Eyes supply cadence .
  • Watch Q3: Guidance embeds ~$5M Clear Eyes shift and e-commerce order normalization; A&M intensity peaks in Q3 (>15%), temporarily pressuring EPS before expected Q4 margin step-up .
  • Eye care inflection: Two new suppliers live; Pillar5 high-speed line ramping with close expected in Q3; shelf/share recovery should support 2H shipments and FY27 normalization .
  • Cash returns intact: 1H FCF +10% YoY; buybacks accelerated ($75M in Q2); leverage 2.4x preserves optionality for M&A and continued repurchases .
  • Tariff headwind easing: Latest full-year cost ~$5M with diversified supply base and mitigations; supports gross margin target ~56.5% .
  • Portfolio resilience: Needs-based categories, GI and women’s health momentum, and strong e-commerce consumption underpin medium-term thesis despite near-term eye care noise .
  • Catalysts: Pillar5 close and supply ramp; visible Q4 margin step-up; potential incremental buybacks; any update on reclaiming shelf space in eye care segment .

Appendix: Additional Q2 Materials

  • Company announced timing for Q2 release and call (Nov 6) .
  • International business saw timing impacts in distributor orders; management reiterated confidence in ~5% annual growth algorithm .