Prestige Consumer Healthcare Q4 2025 Earnings Report

Prestige Consumer Healthcare EPS Results

• Actual EPS: $1.32
• Consensus EPS: $1.30
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: $1.02

Prestige Consumer Healthcare Revenue Results

• Actual Revenue: $296.52 million
• Expected Revenue: $289.36 million
• Beat/Miss: Beat by +$7.16 million
• YoY Revenue Growth: +7.00%

Prestige Consumer Healthcare Announcement Details

• Quarter: Q4 2025
• Date: 5/8/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 8:30AM ET

Prestige Consumer Healthcare (NYSE:PBH), together with its subsidiaries, develops, manufactures, markets, distributes, and sells over-the-counter (OTC) health and personal care products in the United States and internationally. The company operates in two segments, North American OTC Healthcare and International OTC Healthcare. It offers BC/Goody's analgesic powders, Boudreaux's Butt Paste baby ointments, Chloraseptic sore throat liquids and lozenges, Clear Eyes for eye redness relief, Compound W wart removals, DenTek for PEG oral care, Debrox ear wax removals, and Dramamine for motion sickness relief. The company also provides Fleet adult enemas/suppositories, Gaviscon upset stomach remedies, Luden's cough drops, Monistat vaginal anti-fungal, Nix lice/parasite treatments, Summer's Eve feminine hygiene, TheraTears dry eye relief, Fess nasal saline spray and washes, and Hydralyte for oral rehydration products. It sells its products through mass merchandisers; and drug, food, dollar, convenience, and club stores, as well as e-commerce channels. The company was formerly known as Prestige Brands Holdings, Inc. and changed its name to Prestige Consumer Healthcare Inc. in August 2018. Prestige Consumer Healthcare Inc. was founded in 1996 and is headquartered in Tarrytown, New York.

Prestige Consumer Healthcare Q4 2025 Earnings Call Transcript

Key Takeaways

• Record fiscal 2025 results: Net revenue topped $1.1 billion (+1% YoY) with adjusted EPS of $4.52 (+7%), driven by >5% international growth and strong performance in GI and women’s health brands.
• Record Q4 revenue: Fourth-quarter sales reached $296.5 million (+7%/+7.9% ex-FX), supported by broad North America growth, expanded gross margin and a quarterly adjusted EPS record of $1.32.
• Marketing agility: Rapidly reallocated spend from Clear Eyes to TheraTears, Dibrox and Stye—achieving ~10% growth for TheraTears and outperforming its category by over 3 percentage points.
• E-commerce momentum: Online sales again grew in double digits to represent high-teens % of total revenue, backed by brand-specific digital strategies and refreshed consumer experiences.
• Strong financial health: Achieved a 55.8% gross margin (forecasting 56.5% in FY26 despite $15 million in tariffs), generated $243 million in free cash flow and reduced net leverage to 2.4× while funding disciplined M&A and share buybacks.

Presentation

[Operator]

and thank you for standing by. Welcome to the Prestige Consumer Healthcare's Fourth Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

[Operator]

I would now like to hand the conference over to your speaker today, Phil Turpoli, Vice President, Investor Relations and Treasury. Please go ahead.

[Phil Terpolilli, Vice President of Investor Relations & Treasurer at Prestige Consumer Healthcare]

Thanks, operator, and thank you to everyone who has joined today. On the call with me are Ron Lombardi, our Chairman, President and CEO and Christine Sacco, our CFO and COO. On today's call, we'll review our full year fiscal twenty twenty five results, discuss our full year outlook and then take questions from analysts. A slide presentation accompanies today's call. It can be accessed by visiting prestigeconsumerhealthcare.com, clicking on the Investors link and then on today's webcast and presentation.

[Phil Terpolilli, Vice President of Investor Relations & Treasurer at Prestige Consumer Healthcare]

Remember, some of the information contained in the presentation today includes non GAAP financial measures. Reconciliations to the nearest GAAP financial measures are included in our earnings release and slide presentation. On today's call, management will make forward looking statements around risks and uncertainties that are detailed in a complete safe harbor disclosure on Page two of the slide presentation, which accompanies the call. These are important to review and contemplate. Business environment uncertainty remains heightened due to evolving U.

[Phil Terpolilli, Vice President of Investor Relations & Treasurer at Prestige Consumer Healthcare]

S. And international tariffs, supply chain constraints and inflation, which have numerous potential impacts. This means results could change at any time and the forecasted impact of risk considerations is the best estimate based on the information available as of today's date. Additional information concerning risk factors and cautionary statements are available in our most recent SEC filings and our most recent company 10 ks. I'll now hand it over to our CEO, Ron Lombardi.

[Phil Terpolilli, Vice President of Investor Relations & Treasurer at Prestige Consumer Healthcare]

Ron?

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Thanks, Phil. Let's begin on Slide five. We are very pleased with our record fiscal twenty twenty five results, which delivered a year of solid revenue and earnings growth, thanks to our diversified portfolio of brands and proven business attributes. Net revenue of over $1,100,000,000 increased just over 1% versus the prior year consistent with our forecast. Our international segment growth continues to deliver growth in excess of 5%, while in North America, many of our GI brands such as Dramamine and Fleet continue to experience superior results.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

We've also continued to see stabilization for the Summer's Eve brand within the women's health category, which was a key priority we discussed at the start of the year. For profitability, we expanded gross margin slightly, anticipate further expansion in fiscal twenty six, which Chris will discuss later. This helped generate solid adjusted EPS of $4.52 up approximately 7% consistent to our long term growth objective. We continue to execute a steady and disciplined capital allocation strategy using our strong fiscal twenty five free cash flow, which was in excess of $240,000,000 to finish the year at 2.4 times leverage while still executing value enhancing capital deployment. Chris will review our go forward capital allocation priorities later.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Now with that, let's turn to the next section for a reminder of a few of the ways our unique business strategy looks to generate consistent long term performance. To begin, slide seven is a reminder of our marketing agility. One of the benefits of having a wide ranging portfolio of brands is the ability to adjust our brand building strategy and allocations in real time, focusing investments around the best near term opportunities wherever they arise. In fiscal twenty five, we faced supply challenges for Clear Eyes, which we discussed last May. We worked quickly to refocus marketing efforts around the rest of our eye and ear care portfolio, TheraTears, Dibrox and Stye, each of which have unique opportunities available to invest behind.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

For TheraTears, we leveraged its well recognized heritage of the dry eye solution in multiple ways to generate solid growth of approximately 10%. For Stye and Dibrox, two brands synonymous with their categories, a combination of innovation and accelerated marketing investments helped add incremental growth. This result was clear. As shown on the left of the slide, these three brands outperformed their combined category growth by over three percentage points and are well positioned for continued growth. This agility and investments is a unique strength of our business, and we will continuously look to pivot into the best marketing opportunities that drive superior revenue growth.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Now let's turn to slide eight to discuss the ecommerce channel.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Beyond executing successful marketing, we are focused on aligning our investments into channels that are important to consumers. We continue to see consumer shift channels most prominently towards ecommerce where our long term investments have enabled continued success. Even with robust growth over the last five years, we continue to maintain a consistent double digit sales growth profile. For fiscal twenty five, we experienced solid consumption growth with strong performance across our key partners, thanks to multiple tactics and solid retail partnerships. Each of our individual brands develops and maintains its own ecommerce strategy, including continuous improvements to the user experience to help retain loyal consumers.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

For example, our recent refresh of the STI website helps consumers educate themselves around STI symptoms and relief options. Equally important is engaging content that can help drive traffic and conversion of new users. We've had wide ranging success across our portfolio with some examples shown on the right side of the page. So we reviewed both marketing and channel opportunities. Now let's turn to slide nine to discuss innovation.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Innovation continues to be a key part of Prestige's brand building toolkit. We operate with a multi year pipeline of new product development concepts to ensure we generate new SKUs that match the needs of consumers. As shown on the page, the tactical elements to success for the various products launched in fiscal twenty six are wide ranging. Most importantly, all of our innovation seeks to provide better consumer experiences. Each is designed to satisfy key consumer interests, like launching a new flavor, adding of an efficacious ingredient, or a new claim.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Some of the latest product highlights these attributes include the recent launch of watermelon and pineapple flavors for Hydralyte, as well as the Monistat Maintain kit, which contains boric acid in two formats and an all in one odor solution designed for pH balance while addressing odor and discharge. Incrementally, some innovations often seek to build on improving consumer experience through new technologies or form factors. An example of this we've discussed in the past was the launch of CompoundW Nitro Freeze, a work treatment solution with extreme freezing technology not available in other OTC treatments. For fiscal twenty six, we have numerous new form factors across multiple products, including the launch of Summer's Eve whole body deodorant and the recent launch of Fleets Oral Stool Softener. Lastly, many of our product launches help expand our brands into adjacent categories, leveraging their history of efficacy and strong brand heritage with consumers.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

One recent example is Goody's plus headache pain and mental alertness, which takes Goody's proven history of fast pain relief combined with added caffeine to help consumers get back to the things they enjoy faster. So in summary, we have a long history of innovation, another great year planned for '26, and the continuous new product pipeline that should help drive consistent organic sales growth over time. With that, I'll turn it to Chris to discuss the financials.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Thanks, Ron. Good morning, everyone. Let's turn to Slide 11 and review our fourth quarter and full year fiscal twenty twenty five results. As a reminder, the information in today's presentation includes certain non GAAP information that is reconciled to the closest GAAP measure in our earnings release. Please note, I'll also be discussing our initial fiscal twenty twenty six outlook in greater detail by line item.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

This is also available in summary form in the appendix of today's slide presentation. Q4 was particularly strong and above our outlook, featuring record quarterly revenue and adjusted EBITDA and EPS. Q4 revenue of $296,500,000 increased 7% or 7.9% excluding FX versus the prior year. In the North America segment, we experienced broad based growth, which included nice growth in both the women's health and GI categories led by Summer's Eve, Dramamine and Sweet. International segment sales grew 7.1% excluding FX driven by Hydralyte.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Adjusted EBITDA margin grew noticeably versus the prior year, both from the timing of certain marketing spend as well as a favorable prior year comparison of supply chain challenges. Adjusted diluted EPS of $1.32 was a quarterly record, up sharply versus $1.2 in the prior year, thanks to a combination of factors, including the favorable revenue comparison, gross margin expansion and lower interest expense. Let's turn to Slide 12 for detail around consolidated results. For fiscal twenty twenty five, revenues increased 120 basis points organically versus the prior year. Excluding FX, North America and International segment revenues increased 30 basis points and 6.4%, respectively, versus the prior year.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Our International segment experienced solid growth in excess of 5%, thanks to strong performance in Australia, including the Hydralyte brand, which continues to grow household penetration and overall usage. In North America, we were pleased with continued strong broad based growth in the GI category, which helped offset declines from challenged cough and cold sales and the anticipated gradual supply recovery for Clear Eyes, which we anticipate will continue in fiscal twenty twenty six. For Summer's Eve, we experienced the second quarter in a row of year over year sales growth in q four, thanks to the brand's refreshed marketing and innovation strategies. E commerce remains a highlight and our fastest growing channel, up double digits once again in fiscal twenty five and now representing high teens as a percentage of sales. E commerce channel shipment growth accelerated in Q4, outpacing consumption, which we believe was in anticipation of certain tariff actions.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Our outlook assumes this order timing resulted in an approximate $7,000,000 benefit to Q4, which will come out of Q1. Total company gross margin of 55.8% for fiscal twenty twenty five was up 30 basis points versus the prior year, including material improvement in Q4 to approximately 57%. For both fiscal twenty twenty six and for Q1, we anticipate gross margin of approximately 56.5%, driven primarily by cost saving measures. Please note this gross margin forecast includes approximately $15,000,000 in estimated tariff costs, which is about $20,000,000 on an annualized basis. Ron will discuss the tariff and macro backdrop in more detail later, but we have confidence that our need based consumer health care brands and their leading market shares leave us well positioned.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Advertising and marketing was 13.7% as a percentage of sales for fiscal twenty five, up in dollars. For fiscal twenty twenty six, we expect A and M of approximately 14% of sales, both for fiscal twenty twenty six and Q1. This higher percentage is enabled through reinvestment of forecasted gross margin expansion consistent with our long term strategy. G and A expenses were 9.5% of sales in fiscal twenty twenty five as anticipated. We'd anticipate a slight increase in G and A on a percentage basis in fiscal twenty twenty six.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

For Q1, G and A in dollars should be consistent with the prior year. Finally, adjusted EPS of $4.52 compared to $4.21 in the prior year, driven by revenue growth and lower interest expense. Thanks to our debt reduction efforts, we anticipate interest expense of approximately $39,000,000 in fiscal twenty twenty six. Our full year normalized tax rate of 23.7% was consistent with our long term expectations, and we anticipate a similar tax rate of approximately 24% again in fiscal twenty twenty six. Finally, I'd like to point out these results are adjusted to exclude certain noncash, non strategic trade name impairments, which are discussed in further detail in our press release.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Now let's turn to Slide 13 and discuss cash flow. For fiscal twenty twenty five, we generated $243,000,000 in free cash flow, up approximately 2% versus the prior year. As

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

shown

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

on the left side of the slide, this performance is another example of our steady long term free cash flow generation, thanks to our unique business attributes, which continue to enable further net leverage reduction while still leaving capital available for other priorities. In the fiscal year, we reduced our variable term loan debt balance to zero, repurchased over $50,000,000 in shares and built some cash on the balance sheet in advance of future M and A opportunities. With this balanced approach, we achieved a covenant defined leverage ratio of 2.4 times at the March. Looking ahead, we'd anticipate a continuation of our disciplined but flexible capital allocation strategy. Let's review those priorities on Slide 14.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Our improved leverage ratio, robust free cash flow and consistent business performance gives us strategic flexibility with our capital deployment moving forward. We still anticipate approximately $1,000,000,000 of free cash flow over the next four years, which is after the important long term marketing investments we continue to make in our strategic brands. We remain committed to our waterfall of priorities shown on the page that add value for our shareholders. First, we'll continue to evaluate M and A as part of a disciplined capital deployment strategy. We continue to see OTC fragmentation as an opportunity to acquire future brands and portfolios.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Next, we anticipate additional share repurchases under our multiyear share repurchase authorization to offset dilution and return capital to shareholders. Last, we anticipate building further cash on the balance sheet in fiscal twenty twenty six to enhance flexibility around the priorities above. As a reminder, the remainder of our unsecured debt is fixed at attractive rates with maturities in 2028 and 02/1931. So further debt reduction is less attractive from here. So in summary, we have both a healthy leverage position and steady free cash flow profile, which is highly beneficial to enabling disciplined value added capital allocation.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

With that, I'll turn it back to Ron.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Thanks, Chris. Let's turn to Slide 16 to discuss the current environment. As we begin fiscal twenty six, market conditions remain fast changing and hard to predict. To start, as everyone is well aware, tariff volatility and uncertainty continues to be complex for businesses to navigate. The potential impacts are broad, including both the direct costs of a finished good being tariffed as well as the wider inflationary impact.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

These risks are reducing consumer optimism broadly where consumers are actively reviewing their spending decisions. Fortunately, we believe our unique business model leaves us well positioned to help navigate this challenging environment. Many of these attributes were proven to be beneficial during COVID. To start, we have a wide ranging portfolio of needs based products. We have approximately 20 strategic brands across seven distinct product categories, each of which is broadly distributed.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

This allows us to be available with a product that is important to maintaining our consumers' health regardless of economic conditions. Second, we have a diverse and predominantly domestic supplier base that is a strategic advantage. Approximately 80% of our direct domestic cost of goods comes from local manufacturing from numerous suppliers, and we have a modest exposure to high tariff countries. We also have many products produced elsewhere in North America that are currently exempt from tariffs under USMCA. Third, we are moving with urgency to identify cost savings levers across our supply chain help mitigate any near term tariff impacts and resulting long term inflation.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Lastly, with a portfolio of leading brands, we are well positioned to take surgical pricing as necessary. So in summary, our broad portfolio of needs based brands, diverse and mostly domestic supply base and a focus around cost savings leaves us well positioned to navigate the current environment. With that, let's turn to slide 17 for our initial outlook that reflects this backdrop. Even with this fluid macro environment, thanks to our proven business strategy, we achieved a consistent revenue performance in fiscal twenty five and believe we are on track to do so again in fiscal twenty six. For fiscal twenty six, we anticipate revenues of $1,000,000,001.40 to $1,000,000,001.55 with an FX headwind expected of about a point.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

This includes an organic revenue growth forecast of approximately 1% to 2% versus the prior year. For q one, revenues are anticipated of $258,000,000 to $260,000,000 down versus the prior year, largely reflecting the timing of q four e commerce orders, which Chris discussed earlier, as well as the timing of expected eye care deliveries between Q1 and Q2. We anticipate diluted EPS of approximately $4.7 to $4.82 for the full year or about four to 7% EPS growth. This is thanks to higher expected sales, gross margin expansion and lower interest. We expect first quarter EPS between $0.98 and $1 These profitability assumptions include what we know about the tariff environment as of today.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

We currently anticipate tariff impacts of approximately $15,000,000 for fiscal twenty six. Even with these projected impacts, we are still forecasting gross margin expansion to about 56.5, thanks to our strategic cost savings efforts and tactical pricing we've been executing for some time. Lastly, we anticipate free cash flow of $245,000,000 or more, thanks to our strong financial profile. The stable free cash flow will continue to enable multiple capital deployment priorities that will drive upside and maximize shareholder value. With that, I'll open it up for questions.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Operator?

[Operator]

Thank you. And our first question comes from Rupesh Parikh of Oppenheimer. Your line is open.

[Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer & Co. Inc.]

Good morning, and thanks for taking my question. So I just want to go back to your organic sales growth guide of 1% to 2%. So it sounds like maybe there's a zero five point or so headwind just related to that shift in timing of or I guess the pull forward to Q4 versus Q1. But just anything else, you know, that drives it below your 2% to 3% longer term algorithm?

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Yeah. Hey. Good morning, Rupesh. This is Chris. So a couple of things to contemplate in our initial guide, which is a bit wider than it had been in prior year.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Right? First, you know, given the macro environment that Ron touched on a little earlier, just as you're hearing from just about every company in in every industry, there's heightened volatility and uncertainty today. To your point, we did talk about in the prepared remarks the timing of certain ecommerce orders. We highlighted those as about 7,000,000, which we believe was pulled forward. And FX remains difficult to predict.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

We, you know, we saw some highly unusual swings in two of our major exposures, primarily the Australian dollar and the Canadian dollar. So overall, we we think we're being prudent in our guide, given the current environment.

[Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer & Co. Inc.]

Okay. So it sounds like just more, you know, on consumption, just more conservatism versus any weakening you're seeing in your business, I guess, to date. Is that is that is that the right way to think about that?

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

That's a fair way to think about it. Yeah.

[Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer & Co. Inc.]

Okay. Okay. Great. And then second on Clear Eyes, just the latest in terms of how you're thinking about the recovery for Clear Eyes. You know, do you guys expect to get back to, you know, maybe normal normal this year from, I guess, in stocks or retailers and just where you'd like to be with the business?

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Yeah. Good morning, Rupesh. So for starters, there's really no change in the ClearEye supply chain plan that we began to talk about about a year ago where we're looking to expand capacity at the existing suppliers and bring on two new suppliers in fiscal twenty six. Like we saw in fiscal twenty five, the quarterly shipment results can be lumpy. We anticipate them being a bit lumpy as the current suppliers take production down to do upgrades and expand capacity.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

And we work with them to manage that so that we have the best managed timing from quarter to quarter. In addition to that, we would expect that the second half of the year will begin to see the bigger recovery year over year and just in absolute dollars versus the first half as that added capacity and the new suppliers come online.

[Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer & Co. Inc.]

Okay, great. Thank you. I'll pass it on.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Thanks, Lucas.

[Operator]

Thank you. And our next question comes from Susan Anderson of Canaccord. Your line is open.

[Susan Anderson, Managing Director & Senior Analyst at Canaccord Genuity - Global Capital Markets]

Hi, good morning. Thanks for taking my questions. Nice job on the quarter and ending the year. I guess maybe just a follow-up on the women's health category. Definitely saw some nice growth in fourth quarter.

[Susan Anderson, Managing Director & Senior Analyst at Canaccord Genuity - Global Capital Markets]

I guess, how are you feeling about both brands, Summerdiv and Monistat heading into this year? And then do you feel like the brands are in a good position to grow? And do you plan any new innovation as well for this year? Thanks.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Yeah. Good morning, Susan. So women's health in Summer's Eve in particular, we're we feel really good about the progress that the brand made during fiscal twenty five. You know, each quarter, the brand improved quarter to quarter, and we actually were able to grow, enough in the second half of fiscal twenty five to get Summer's Eve to a full year level of growth year over year, even with starting off with with a pretty big decline in the first quarter. So we feel really good about the results of our efforts focused on, redoing our marketing messaging and, our marketing communication tools.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

The new products that we launched in fiscal twenty five, the ultimate odor protection in both wash, spray and wipes forms has been the best launch for, summer's eve in a really long time. And then we've got a number of other products that I touched upon in our in our comments today including whole body deodorant, amongst others that we feel, really good about as we head into '26. So all in all, we we expect that our women's health franchises will get back to a position of being able to grow over the long term.

[Susan Anderson, Managing Director & Senior Analyst at Canaccord Genuity - Global Capital Markets]

Okay. Great. That sounds good. And then maybe if I could just ask about cold cost because down for this year, obviously, it wasn't a great year going into fiscal year twenty six, I guess. How's your inventory there?

[Susan Anderson, Managing Director & Senior Analyst at Canaccord Genuity - Global Capital Markets]

Do you feel like there will be some restocking just given that late surge we had in the cold cost season. Thanks.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Yeah. So going into fiscal twenty five, our outlook for cough, cold shipments of our products was that we thought we'd be flat in '25 to '24, and we actually ended up being, down a bit. But thanks to the benefit of a of a diverse portfolio, it didn't impact our our results at all for the year. But we thought we'd be flat in '25. We ended up being down.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

And our outlook for '26 is that '26, our shipments again will be flat to '25 level. You know, hard to predict what cough, cold incident levels will be, what the retailers will do for inventory management, you know, what's that, in the shelf, in the bathrooms of our consumers at home. So we're starting off with that, that forecast as we head into '26.

[Susan Anderson, Managing Director & Senior Analyst at Canaccord Genuity - Global Capital Markets]

Okay. Great. Then if I could just add one more. So with your leverage down to 2.4, another year of strong free cash flow. And then looking into continued strong cash flow for this year, I guess, how are you thinking about your capital allocation strategy?

[Susan Anderson, Managing Director & Senior Analyst at Canaccord Genuity - Global Capital Markets]

Are you seeing any attractive assets out there that you could potentially add to your portfolio? Thanks.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Good morning, Susan. It's Chris. So to your point, at at the 2.4 times leverage, we feel well positioned to demonstrate multiple uses of our capital just as we did in fiscal twenty five. Right? We did about $50,000,000 in repurchases this year.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

We've paid off our term loan, which was a a hundred and $35,000,000 during the year. We've built about $50,000,000 of of cash on the balance sheet. And so I think the the the story for '26 is gonna be a balanced approach. Right? Obviously, our preference is m and a.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

We continue to see a lot of things out there given the fragmentation of the industry. And, you know, I think you'll see a balanced approach in us doing some share repurchases, but also building some cash on the balance sheet because we wanna be well positioned when something that that fits our criteria is is actionable.

[Susan Anderson, Managing Director & Senior Analyst at Canaccord Genuity - Global Capital Markets]

Okay. Great. Thanks so thanks so much. Good luck the rest of the year.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Thanks, Susan.

[Operator]

Thank you. Our next question comes from Keith Davis of Jefferies. Your line is open.

[Keith D, Vice President at Jefferies]

Hey, good morning. Thanks for the question. I wanted to just drill down a little bit on the consumer uncertainty. It doesn't sound like it's impacting your business. That kind of makes sense given your portfolio.

[Keith D, Vice President at Jefferies]

But I'm curious how you might look to evolve your innovation or marketing plans as the year progresses just as some of this consumer uncertainty persists. It could also be a time where, you know, the consumer is a little less receptive to to marketing or innovation. So curious how you guys might look to adapt or evolve even if it's prioritizing different channels if the uncertainty persists through through the year. Thank you.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Yeah. Good morning, Keith. So,

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

you know,

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

what we've seen in the in the past during challenging economic times or fluid fluid times is that, you know, needs based categories tend to be the last place that consumers look to make a change. They stick with their their trusted brands that that's worked for them. So what we have seen though over time is that where consumers choose to purchase the product will evolve, and we've started to see that, in fiscal twenty five. So they may look for the best value proposition, whether it's price or a different, price point offering. And with our broad distribution and and our varied product offerings within our brand, we're well suited to meet whatever the the consumer might be looking for.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

So we'll look to see where the consumer is evolving to and we'll realign our investments, to better support or best support where the consumer is looking for the products and that proposition that best fits their need at at that moment. So, know, I think I I commented on this today in the prepared remarks. I think one of the things that we do well here is pivot quickly and change to meet a dynamic evolving environment. We saw that in '25 when we pivoted and made changes to eye care investment as we dealt with Clear Eye Supply and took advantage of, TheraTears, Dibrox and STI opportunities. So we'll continue to be, fluid and, work best to meet where the consumer ends up this year.

[Operator]

Thank you. And our next question comes from Glenn West of William Blair. Your line is open.

[Analyst]

Hi, everyone. This is Glenn West stepping in for John Anderson. I was hoping to ask about the hot topic of tariffs. You guys obviously called out the $15,000,000 headwind. I assume that's kind of taking into account that the current tariff environment stays as it is for the full year, obviously.

[Analyst]

And then you talked about being able to offset it with cost savings levers. I was wondering if you guys could give us a little more color what levers you have there. And then you also mentioned maybe the ability to take surgical pricing. I'm wondering if that's kinda just, hey. If if there's anything left over that we can't mitigate with our levers, we'll obviously offset dollar for dollar with extra pricing.

[Analyst]

So maybe just overall color on on your plans there.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Hey. Good morning, Glenn. This is Chris. So, you're correct in your assumption. We are assuming in our guide that all tariffs, that are in place or scheduled to be in place as of today.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

You know, Ron mentioned in the prepared remarks, the USMCA exemptions, the elevated Chinese tariff rate, global baseline and reciprocal. I would just point out that reciprocal tariffs aren't very meaningful to us and have been factored in our guide, just given our limited exposure to that. You know? And we're working closely with all of our suppliers to identify and close exposures that can result in savings for for fiscal twenty six and beyond. You know?

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

You asked about levers, you know, when we have dual sourcing or alternative sourcing even for APIs for some of our our co packers, you know, everything's on the table, and we're looking and working closely with our external partners to to mitigate the cost. And that will obviously be our where we go first. But to your point, we do anticipate taking some surgical pricing, if need be, but our efforts are gonna start with cost savings.

[Analyst]

Okay. That's helpful. And then if I could sneak in one more just on the ecommerce channel up to, you know, a high percentage, high teens of sales at this point. Is that still, like, really mainly North America, or or how is the rollout kinda going internationally? It's it's ecommerce picking up internationally at all sort of

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Yeah. So, Glenn, this is Ron. The ecommerce is still largely US centric. We don't see the growth in online purchases in the other, countries where we are doing business. So in The UK and Australia and even in Canada, ecommerce just hasn't grown to the extent that it has in The US.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Doesn't mean that we're not looking for opportunities and working with our retail partners in those regions to, help them, invest and and grow those those channels. But, for now, it's very much US centric.

[Analyst]

Okay. Thank you guys very much for the time. I'll hop back in the queue.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Great. Thanks.

[Operator]

Thank you. And our next question comes from Anthony Lebiedzinski of Sidoti and Company. Line is open.

[Anthony Lebiedzinski, Senior Equity Research Analyst at Sidoti & Company, LLC]

Good morning, everyone, and thank you for taking the questions and certainly nice results for 4Q. Just wondering, so obviously, as you pointed out, the vast majority of your products are sourced in The U. S. Or North America. Just wondering if there are any opportunities that you think that for those that are sourced outside of The U.

[Anthony Lebiedzinski, Senior Equity Research Analyst at Sidoti & Company, LLC]

S, are there any domestic suppliers that are out there, or or you think you're you're kind of tapped out with that?

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Yeah. We're certainly looking, where where we can. You know, I would say, obviously, the most meaningful impact about half of our tariffs is relating to to to China. Limited exposure, but just given the magnitude of the of the rate. And we'll look to see if there are, other countries even outside of The US, obviously, that don't have the same impact as as the impact China's having.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

But, again, for us, I think it's a little bit similar to COVID where, you know, for for tariffs for us at about $15,000,000 this year, we feel is manageable. We'll look to offset it with a lot of levers of cost savings and, given the brand's positioning, surgical pricing is necessary.

[Anthony Lebiedzinski, Senior Equity Research Analyst at Sidoti & Company, LLC]

Gotcha. Okay. And then you've talked about the innovation of you know, it's it's not the first time, but I'm just just look just wondering, as you look towards this year, are you as far as like the number of products that you're looking to launch, is that comparable to past years? Or do you guys target a specific percentage of sales that you wanna come from new products? Just just wondering how how you think about that and then what's what's the margin profile for for the new products that you're looking to roll out?

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Yes. So good morning, Anthony. So the first part of it is, you know, we tend to see see us a fairly steady impact from new products, each year. We don't target a certain percentage of sales to to come out of new products or innovation each year. We just look to have great ideas, that our teams work on on over a long period of time.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

It can take two or three years to launch new products or bring new innovation to the OTC market. So, it's something that has to be a focus over the long term for us to to be successful, over time.

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

Yeah. And, Anthony, this is Chris. Just to to piggyback on Ron. From a margin perspective, you know, we have an edict that all of our innovation needs to be margin accretive to the brand. Right?

[Christine Sacco, CFO & COO at Prestige Consumer Healthcare]

When when we don't have we we we don't take price if we don't have associated cost impacts. And so, the way to march our margin forward, continually is usually through this innovation.

[Anthony Lebiedzinski, Senior Equity Research Analyst at Sidoti & Company, LLC]

Got it. Well, thank you very much, and best of luck.

[Operator]

Thanks. Thank you. And our next question comes from Doug Lane of Watertel Research. Your line is open.

[Douglas Lane, Head of Consumer Products at Water Tower Research LLC]

Yeah. Hi. Thanks, and, good morning, everybody. Just one thing. I I noticed that the Opelo deal closed this week, and that's a big transaction.

[Douglas Lane, Head of Consumer Products at Water Tower Research LLC]

And I just wondered if that impacts you either competitively or perhaps it could be an m and a catalyst for you.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Yeah. Good morning, Doug. So, I guess, Opel is, the next in line of the spinouts of the of the big pharma. So we've been through this a little bit before. It really doesn't do anything to change the competitive landscape of, where we're focused or the or the competitors in in those space.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

And over time, we've seen, the big pharma spinouts potentially be opportunities for brands that may come to market. So it's more of the same with the latest spin out for us.

[Douglas Lane, Head of Consumer Products at Water Tower Research LLC]

Okay. Thank you. That's helpful, Ron.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Okay.

[Operator]

Thank you. I show no further questions at this time. I'd like to turn it back to Ron Lombardi for closing remarks.

[Ronald Lombardi, Chairman, President & CEO at Prestige Consumer Healthcare]

Thanks, operator. And again, thanks everyone for taking the time to join us today. As we've discussed throughout this call, the current environment is fluid, but we believe our unique business attributes and strategy has us well positioned to navigate the upcoming year successfully. So thanks again for joining us, and have a great day.

[Operator]

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Participants

Executives

• Phil Terpolilli, Vice President of Investor Relations & Treasurer
• Ronald Lombardi, Chairman, President & CEO
• Christine Sacco, CFO & COO

Analysts

• Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer & Co. Inc.
• Susan Anderson, Managing Director & Senior Analyst at Canaccord Genuity - Global Capital Markets
• Keith D, Vice President at Jefferies
• Analyst
• Anthony Lebiedzinski, Senior Equity Research Analyst at Sidoti & Company, LLC
• Douglas Lane, Head of Consumer Products at Water Tower Research LLC