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) (NYSE: PBH) develops, markets and distributes over-the-counter health care products and household consumer products. Its portfolio includes branded treatments for eye care, gastrointestinal health, women’s health, oral care, respiratory conditions, pain relief and skin care, along with products for lice treatment and motion sickness.

The company’s brands include Clear Eyes, Dramamine, Monistat, Summer’s Eve, Compound W, Chloraseptic, Luden’s, BC, Goody’s, Nix and Hydralyte, among others. Prestige’s products are sold through retailers, drugstores, supermarkets, e-commerce channels and other distributors.

Prestige Consumer Healthcare is headquartered in Tarrytown, New York, and serves consumers primarily in the United States, with additional operations and distribution in markets including Canada and Australia. The company was formerly known as Prestige Brands Holdings and has expanded its business through the development and acquisition of established consumer health brands.

Prestige Consumer Healthcare Q4 2025 Earnings Call Transcript

Key Takeaways

• Record FY25 results with net revenue over $1.1 billion (+1 %), adjusted EPS $4.52 (+7 %), free cash flow > $240 million, and leverage reduced to 2.4×.
• Q4 revenue of $296.5 million (+7 % or +7.9 % ex-FX) delivered record quarterly adjusted EBITDA margin and EPS of $1.32, driven by broad-based growth in women’s health, GI brands, and international markets.
• FY26 guidance calls for ~1–2 % organic revenue growth, revenues of $1.14–$1.155 billion, EPS of $4.70–$4.82 (+4–7 %), gross margin expansion to ~56.5 %, and > $245 million free cash flow.
• E-commerce remains a high-growth channel (double digits, now high-teens of sales) with ongoing brand-specific digital investments, and a multi-year innovation pipeline is delivering new flavor extensions and form-factor launches in FY26.
• Management anticipates ~$15 million of tariff costs in FY26 amid ongoing U.S. and international tariff volatility and inflation, though cost-saving measures and tactical pricing are planned to mitigate the impact.

Presentation

[Operator]

Thank you for standing by. Welcome to the Prestige Consumer Healthcare's Fourth Quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Phil Terpolilli, Vice President, Investor Relations and Treasury. Please go ahead.

[Phil Terpolilli, VP of Investor Relations and Treasury at Prestige Consumer]

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 2025 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. 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. They're 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.

[Phil Terpolilli, VP of Investor Relations and Treasury at Prestige Consumer]

Business environment uncertainty remains heightened due to evolving U.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 a 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-K. I'm now handing over to our CEO, Ron Lombardi. Ron?

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Thanks, Phil. Let's begin on slide five. We are very pleased with our record fiscal 2025 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 $1.1 billion 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. 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 margins slightly, anticipate further expansion in fiscal 2026, which Chris will discuss later.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

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 2025 free cash flow, which was in excess of $240 million, to finish the year at 2.4x leverage while still executing value-enhancing capital deployment. Chris will review our go-forward capital allocation priorities later. 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.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

In fiscal 2025, 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, Debrox, and STYEE, each of which had unique opportunities available to invest behind. For TheraTears, we leveraged its well-recognized heritage as a dry eye solution in multiple ways to generate solid growth of approximately 10%. For STYE and Debrox, two brands synonymous with their categories, a combination of innovation and accelerated marketing investments helped add incremental growth. The 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 in 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.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Now, let's turn to slide eight to discuss the e-commerce channel. Beyond executing successful marketing, we are focused on aligning our investments into channels that are important to consumers. We continue to see consumers shift channels, most prominently toward e-commerce, 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 2025, 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 e-commerce strategy, including continuous improvements to the user experience to help retain loyal consumers. For example, our recent refresh of the STYE website helps consumers educate themselves around STYE symptoms and relief options. Equally important is engaging content that can help drive traffic and conversion of new users.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

We've had wide-ranging success across our portfolio, with some examples shown on the right side of the page. We reviewed both marketing and channel opportunities. Now, let's turn to slide nine to discuss innovation. 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 2026 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 an efficacious ingredient, or a new claim.

[Ron Lombardi, Chairman, President, and 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 have discussed in the past was the launch of Compound W NitroFreeze, a wart treatment solution with extreme freezing technology not available in other OTC treatments. For fiscal 2026, we have numerous new form factors across multiple products, including the launch of Summer's Eve Whole Body Deodorant and the recent launch of Fleet 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.

[Ron Lombardi, Chairman, President, and 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. In summary, we have a long history of innovation, another great year planned for 2026, and a continuous new product pipeline that should help drive consistent organic sales growth over time. With that, I'll turn it to Christine to discuss the financials.

[Christine Sacco, CFO and 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 2025 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 2026 outlook in greater detail by line item. 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 $296.5 million 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 Fleet. International segment sales grew 7.1% excluding FX, driven by Hydralyte.

[Christine Sacco, CFO and 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 $1.02 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 2025, 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. 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.

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

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 2026. For Summer's Eve, we experienced the second quarter in a row of year-over-year sales growth in Q4, 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 2025, 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. Our outlook assumes this order timing resulted in an approximate $7 million benefit to Q4, which will come out of Q1.

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

Total company gross margin of 55.8% for fiscal 2025 was up 30 basis points versus the prior year, including material improvement in Q4 to approximately 57%. For both fiscal 2026 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 million in estimated tariff costs, which is about $20 million on an annualized basis. Ron will discuss the tariff and macro backdrop in more detail later, but we have confidence that our needs-based consumer healthcare brands and their leading market shares leave us well-positioned. Advertising and marketing was 13.7% as a percentage of sales for fiscal 2025, up in dollars. For fiscal 2026, we expect A&M of approximately 14% of sales, both for fiscal 2026 and Q1. This higher percentage is enabled through reinvestment of forecasted gross margin expansion, consistent with our long-term strategy.

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

G&A expenses were 9.5% of sales in fiscal 2025, as anticipated. We'd anticipate a slight increase in G&A on a percentage basis in fiscal 2026. For Q1, G&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 million in fiscal 2026. 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 2026. Finally, I'd like to point out these results are adjusted to exclude certain non-cash, non-strategic trade name impairments, which are discussed in further detail in our press release. Now, let's turn to slide 13 and discuss cash flow.

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

For fiscal 2025, we generated $243 million in free cash flow, up approximately 2% versus the prior year. As shown 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 million in shares, and built some cash on the balance sheet in advance of future M&A opportunities. With this balanced approach, we achieved a covenant-defined leverage ratio of 2.4x at the end of 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 and 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 billion 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&A as part of a disciplined capital deployment strategy. We continue to see OTC fragmentation as an opportunity to acquire future brands and portfolios. Next, we anticipate additional share repurchases under our multi-year share repurchase authorization to offset dilution and return capital to shareholders. Last, we anticipate building further cash on the balance sheet in fiscal 2026 to enhance flexibility around the priorities above.

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

As a reminder, the remainder of our unsecured debt is fixed at attractive rates with maturities in 2028 and 2031, so further debt reduction is less attractive from here. 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. With that, I'll turn it back to Ron.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Thanks, Chris. Let's turn to slide 16 to discuss the current environment. As we begin fiscal 2026, 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. 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.

[Ron Lombardi, Chairman, President, and 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-tariffed 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-saving levers across our supply chain to help mitigate any near-term tariff impacts and resulting long-term inflation. Lastly, with a portfolio of leading brands, we are well-positioned to take surgical pricing as necessary. 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.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

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 2025 and believe we are on track to do so again in fiscal 2026. For fiscal 2026, we anticipate revenues of $1.140 billion-$1.155 billion, with an FX headwind expected of about 1%. This includes an organic revenue growth forecast of approximately 1%-2% versus the prior year. For Q1, revenues are anticipated of $258 million-$260 million, down versus the prior year, largely reflecting the timing of Q4 e-commerce orders, which Christine discussed earlier, as well as the timing of expected eye care deliveries between Q1 and Q2. We anticipate diluted EPS of approximately $4.70-$4.82 for the full year, or about 4%-7% EPS growth.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

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. We currently anticipate tariff impacts of approximately $15 million for fiscal 2026. 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 million or more, thanks to our strong financial profile. A 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. Operator?

[Operator]

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Rupesh Parikh of Oppenheimer. Your line is open.

[Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer]

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

[Christine Sacco, CFO and 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 the prior year. Right? First, given the macro environment that Ron touched on a little earlier, just as you're hearing from just about every company 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 e-commerce orders. We highlighted those as about $7 million, which we believe was pulled forward. And FX remains difficult to predict. We saw some highly unusual swings in two of our major exposures, primarily the Australian dollar and the Canadian dollar. So overall, we think we're being prudent in our guide given the current environment.

[Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer]

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

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

That's a fair way to think about it, yes.

[Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer]

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

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Yeah. Good morning, Rupesh. For starters, there's really no change in the Clear Eyes 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 2026. Like we saw in fiscal 2025, 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. 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]

Okay. Great. Thank you. I'll pass it along.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Thanks, Rupesh.

[Operator]

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

[Susan Anderson, Managing Director and Senior Analyst at Canaccord Genuity]

Hi. Good morning. Thanks for taking my questions. Nice job on the quarter and ending the year. I guess maybe just to follow up on the women's health category, definitely saw some nice growth in fourth quarter. I guess, how are you feeling about both brands, Summer's Eve and Monistat, heading into this year? Do you feel like the brands are in a good position to grow? Do you plan any new innovation as well for this year? Thanks.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Yeah. Good morning, Susan. Women's Health and Summer's Eve in particular, we feel really good about the progress that the brand made during fiscal 2025. Each quarter, the brand improved quarter to quarter, and we actually were able to grow enough in the second half of fiscal 2025 to get Summer's Eve to a full-year level of growth year-over-year, even with starting off with a pretty big decline in the first quarter. We feel really good about the results of our efforts focused on redoing our marketing messaging and our marketing communication tools. The new products that we launched in fiscal 2025, the ultimate odor protection in both wash, spray, and wipe forms, has been the best launch for Summer's Eve in a really long time.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

We have a number of other products that I touched upon in our comments today, including Whole Body Deodorant, amongst others that we feel really good about as we head into 2026. All in all, 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 and Senior Analyst at Canaccord Genuity]

Okay. Great. That sounds good. Maybe if I could just ask about cold coffee, because it's down for this year. Obviously, it wasn't a great year going into fiscal year 2026. I guess, how's your inventory there? Do you feel like there will be some restocking just given that late surge we had in the cold coffee season? Thanks.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Yeah. Going into fiscal 2025, our outlook for cough and cold shipments of our products was that we thought we'd be flat in 2025 to 2024, and we actually ended up being down a bit. Thanks to the benefit of a diverse portfolio, it didn't impact our results at all for the year. We thought we'd be flat in 2025. We ended up being down. Our outlook for 2026 is that 2026, our shipments again will be flat to 2025's level. Hard to predict what cough and cold incident levels will be, what the retailers will do for inventory management, what's in the shelf in the bathrooms of our consumers at home. We're starting off with that forecast as we head into 2026.

[Susan Anderson, Managing Director and Senior Analyst at Canaccord Genuity]

Okay. Great. If I could just add one more. With your leverage down to 2.4x, 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? Are you seeing any attractive assets out there that you could potentially add to your portfolio? Thanks.

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

Yeah. Good morning, Susan. It's Chris. To your point, at the 2.4x leverage, we feel well-positioned to demonstrate multiple uses of our capital, just as we did in fiscal 2025. Right? We did about $50 million in repurchases this year. We paid off our term loan, which was $135 million during the year. We built about $50 million of cash on the balance sheet. I think the story for 2026 is going to be a balanced approach. Right? Obviously, our preference is M&A. We continue to see a lot of things out there, given the fragmentation of the industry. 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 want to be well-positioned when something that fits our criteria is actionable.

[Susan Anderson, Managing Director and Senior Analyst at Canaccord Genuity]

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

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Thanks, Susan.

[Operator]

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

[Keith Devas, VP of Equity Research at Jefferies]

Hey. Good morning. Thanks for the question. I wanted to just drill down a little bit on the consumer uncertainty. It does not sound like it is impacting your business. That kind of makes sense, given your portfolio. I am 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 the consumer is a little less receptive to marketing or innovation. I am curious how you guys might look to adapt or evolve, even if it is prioritizing different channels, if the uncertainty persists through the year. Thank you.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Yeah. Good morning, Keith. What we've seen in the past during challenging economic times or fluid times is that needs-based categories tend to be the last place that consumers look to make a change. They stick with their trusted brands that have worked for them. What we have seen, though, over time is that where consumers choose to purchase the product will evolve. We've started to see that in fiscal 2025. They may look for the best value proposition, whether it's price or a different price point offering. With our broad distribution and our varied product offerings within our brand, we're well-suited to meet whatever the consumer might be looking for.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

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 that moment. I think 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 2025 when we pivoted and made changes to eye care investment as we dealt with Clear Eyes supply and took advantage of TheraTears, Debrox, and STYE opportunities. We'll continue to be fluid and work best to meet where the consumer ends up this year.

[Operator]

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

[Glenn West, Equity Research Associate at William Blair]

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 million headwind. I assume that's kind of taking into account that the current tariff environment stays as it is for the full year, obviously. You talk 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. You also mentioned maybe the ability to take surgical pricing. I'm wondering if that's kind of just, hey, if there's anything left over that we can't mitigate with our levers, we'll obviously offset dollar for dollar with extra pricing. Maybe just overall color on your plans there.

[Christine Sacco, CFO and 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, 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. We're working closely with all of our suppliers to identify and close exposures that can result in savings for fiscal 2026 and beyond. You asked about levers. When we have dual sourcing or alternative sourcing, even for APIs for some of our co-packers, everything's on the table, and we're looking and working closely with our external partners to mitigate the costs.

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

That will obviously be where we go first. To your point, we do anticipate taking some surgical pricing if need be, but our efforts are going to start with cost savings.

[Glenn West, Equity Research Associate at William Blair]

Okay. That's helpful. If I could sneak in one more just on the e-commerce channel, up to a high percentage, high teens of sales at this point, is that still really mainly North America, or how is the rollout kind of going internationally? Is e-commerce picking up internationally at all, sort of?

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Yeah. So Glen, this is Ron. The e-commerce is still largely U.S.-centric. We don't see the growth in online purchases in the other countries where we are doing business. In the U.K. and Australia and even in Canada, e-commerce just hasn't grown to the extent that it has in the U.S. Doesn't mean that we're not looking for opportunities and working with our retail partners in those regions to help them invest and grow those channels. For now, it's very much U.S.-centric.

[Glenn West, Equity Research Associate at William Blair]

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

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Great. Thanks.

[Operator]

Thank you. As a reminder, if you have a question, please press star one one. Our next question comes from Anthony Lebiedzinski of SIDOTI & Company. Your line is open.

[Anthony Lebiedzinski, Senior Equity Analyst at SIDOTI & Company]

Good morning, everyone. Thank you for taking the questions and the 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.S., are there any domestic suppliers that are out there, or you think you're kind of tapped out with that?

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

Yeah. We're certainly looking where we can. I would say, obviously, the most meaningful impact, about half of our tariffs is relating to China. Limited exposure, but just given the magnitude of the rate. We'll look to see if there are other countries, even outside of the U.S., obviously, that do not have the same impact as the impact China's having. For us, I think it's a little bit similar to COVID, where for tariffs for us at about $15 million this year, we feel is manageable. We'll look to offset it with a lot of levers of cost savings. Given the brand's positioning, surgical pricing is necessary.

[Anthony Lebiedzinski, Senior Equity Analyst at SIDOTI & Company]

Gotcha. Okay. You have talked about the innovation. It's not the first time. I'm just wondering, as you look towards this year, as far as 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 want to come from new products? Just wondering how you think about that and what's the margin profile for the new products that you're looking to roll out.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Yeah. Good morning, Anthony. The first part of it is we tend to see a fairly steady impact from new products each year. We do not target a certain percentage of sales to come out of new products in innovation each year. We just look to have great ideas that our teams work on over a long period of time. It can take two or three years to launch new products or bring new innovation to the OTC market. It is something that has to be a focus over the long term for us to be successful over time.

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

Yeah. Anthony, this is Chris. Just to piggyback on Ron, from a margin perspective, we have an edict that all of our innovation needs to be margin accretive to the brand. Right? When we do not have, we do not take price if we do not have associated cost impacts. The way to march our margin forward continually is usually through this innovation.

[Anthony Lebiedzinski, Senior Equity Analyst at SIDOTI & Company]

Got it. All right. Thank you very much and best of luck.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Thanks.

[Operator]

Thank you. Our next question comes from Doug Lane of Watertower Research. Your line is open.

[Doug Lane, Managing Director on Consumer at Water Tower Research]

Yeah. Hi. Thanks. Good morning, everybody. Just one thing. I noticed that the Opella deal closed this week, and that's a big transaction. I just wondered if that impacts you either competitively or perhaps it could be an M&A catalyst for you.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Yeah. Good morning, Doug. I guess Opella is the next in line of the spinouts of the big pharma. We have been through this a little bit before. It really does not do anything to change the competitive landscape of where we are focused or the competitors in those space. Over time, we have seen the big pharma spinouts potentially be opportunities for brands that may come to market. It is more of the same with the latest spinout for us.

[Doug Lane, Managing Director on Consumer at Water Tower Research]

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

[Ron Lombardi, Chairman, President, and 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.

[Ron Lombardi, Chairman, President, and CEO at Prestige Consumer Healthcare]

Thanks, operator. And again, thanks to 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. 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

• Ron Lombardi, Chairman, President, and CEO
• Christine Sacco, CFO and COO

Analysts

• Phil Terpolilli, VP of Investor Relations and Treasury at Prestige Consumer
• Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer
• Susan Anderson, Managing Director and Senior Analyst at Canaccord Genuity
• Keith Devas, VP of Equity Research at Jefferies
• Glenn West, Equity Research Associate at William Blair
• Anthony Lebiedzinski, Senior Equity Analyst at SIDOTI & Company
• Doug Lane, Managing Director on Consumer at Water Tower Research