Prestige Consumer Healthcare Inc. (PBH) Bundle
Understanding Prestige Consumer Healthcare Inc. (PBH) Revenue Streams
Understanding Prestige Consumer Healthcare Inc.’s Revenue Streams
Total revenues for the six months ended September 30, 2024 were $550.9 million, a decrease of $14.7 million, or 2.6%, compared to the same period in 2023.
Breakdown of Primary Revenue Sources
The primary revenue sources are categorized into two segments: North American OTC Healthcare and International OTC Healthcare.
| Segment | Revenue (2024) | Revenue (2023) | Change ($) | Change (%) |
|---|---|---|---|---|
| North American OTC Healthcare | $472.1 million | $490.6 million | ($18.4 million) | (3.8%) |
| International OTC Healthcare | $78.8 million | $75.1 million | $3.7 million | 5.0% |
Year-over-Year Revenue Growth Rate
In the six months ended September 30, 2024, the revenue growth rate for the North American segment decreased by 3.8%, while the International segment saw an increase of 5.0%.
Contribution of Different Business Segments to Overall Revenue
For the six months ended September 30, 2024, the contribution of each segment to overall revenue is as follows:
| Segment | Percentage of Total Revenue |
|---|---|
| North American OTC Healthcare | 85.7% |
| International OTC Healthcare | 14.3% |
Analysis of Significant Changes in Revenue Streams
Within the North American OTC Healthcare segment, revenue decreases were primarily attributed to:
- Cough & Cold: decreased by $8.3 million (down 18.0%)
- Women's Health: decreased by $5.2 million (down 4.7%)
- Analgesics: decreased by $3.0 million (down 5.2%)
Conversely, the International OTC Healthcare segment experienced growth in the Gastrointestinal category, which increased by $4.9 million (up 18.2%).
The overall revenue trends indicate a challenging environment in North America, while international operations are showing resilience and growth potential.
| Product Category | Revenue (2024) | Revenue (2023) | Change ($) | Change (%) |
|---|---|---|---|---|
| Analgesics | $54.2 million | $57.2 million | (3.0 million) | (5.2%) |
| Cough & Cold | $38.0 million | $46.3 million | (8.3 million) | (18.0%) |
| Women's Health | $104.8 million | $110.0 million | (5.2 million) | (4.7%) |
| Gastrointestinal | $86.2 million | $83.4 million | $2.8 million | 3.4% |
A Deep Dive into Prestige Consumer Healthcare Inc. (PBH) Profitability
A Deep Dive into Prestige Consumer Healthcare Inc.'s Profitability
Gross Profit Margin: For the six months ended September 30, 2024, the gross profit was $303.4 million, representing a decrease of 3.6% compared to $314.7 million for the same period in 2023. The gross profit margin as a percentage of total revenues decreased from 55.6% in 2023 to 55.1% in 2024.
Operating Profit Margin: Operating income for the six months ended September 30, 2024 was $147.6 million, compared to $161.3 million in 2023, reflecting a decrease of 8.5%. The operating profit margin thus decreased from 28.3% to 26.8%.
Net Profit Margin: Net income for the six months ended September 30, 2024, was $103.4 million, down from $106.8 million in 2023. This results in a net profit margin of 18.8% for 2024, compared to 19.0% in 2023.
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Gross Profit | $303.4 million | $314.7 million | -3.6% |
| Gross Profit Margin | 55.1% | 55.6% | -0.5% |
| Operating Income | $147.6 million | $161.3 million | -8.5% |
| Operating Profit Margin | 26.8% | 28.3% | -1.5% |
| Net Income | $103.4 million | $106.8 million | -3.2% |
| Net Profit Margin | 18.8% | 19.0% | -0.2% |
Trends in Profitability Over Time: The profitability metrics indicate a downward trend in gross, operating, and net profit margins over the past year. The decrease in gross profit margin is attributed to increased supply chain costs and a decline in total revenues from $550.9 million in 2023 to $536.2 million in 2024, a decrease of 2.6%.
Comparison with Industry Averages: The industry average for gross profit margin in the OTC healthcare sector is approximately 60%. The operating profit margin average stands around 30%, while the net profit margin averages around 20%. This indicates that the company’s profitability metrics are below industry averages, suggesting operational inefficiencies and higher costs of goods sold.
Operational Efficiency Analysis: The contribution margin for the North American OTC Healthcare segment was $190.1 million for the six months ended September 30, 2024, representing a 40.3% contribution margin percentage, down from 42.0% in 2023. The decrease in contribution margin is primarily due to rising advertising and marketing expenses, which increased to $32.5 million in 2024 from $30.4 million in 2023.
| Segment | Contribution Margin (2024) | Contribution Margin (2023) | Change |
|---|---|---|---|
| North American OTC Healthcare | $190.1 million (40.3%) | $206.2 million (42.0%) | -7.8% |
| International OTC Healthcare | $32.5 million (41.2%) | $32.1 million (42.8%) | 1.1% |
| Total Contribution Margin | $222.6 million (40.4%) | $238.4 million (42.1%) | -6.6% |
Debt vs. Equity: How Prestige Consumer Healthcare Inc. (PBH) Finances Its Growth
Debt vs. Equity: How Prestige Consumer Healthcare Inc. Finances Its Growth
As of September 30, 2024, the company reported an aggregate of $1.1 billion in outstanding indebtedness, which is composed of:
- $400 million of 5.125% senior unsecured notes maturing on January 15, 2028.
- $600 million of 3.750% senior unsecured notes maturing on April 1, 2031.
- $60 million of borrowings under the Term B-5 Loans due July 1, 2028.
As of the same date, there was no outstanding balance on the asset-based revolving credit facility, which has a borrowing capacity of $173.9 million.
Debt Levels
The breakdown of long-term and short-term debt as of September 30, 2024 is as follows:
| Debt Type | Amount (in thousands) | Interest Rate | Maturity Date |
|---|---|---|---|
| 2019 Senior Notes | $400,000 | 5.125% | January 15, 2028 |
| 2021 Senior Notes | $600,000 | 3.750% | April 1, 2031 |
| Term B-5 Loans | $60,000 | SOFR + 2.00% | July 1, 2028 |
Debt-to-Equity Ratio
The debt-to-equity ratio serves as a critical indicator of financial leverage. As of September 30, 2024, the company's total equity stood at $1.731 billion. Given the total debt of $1.1 billion, the debt-to-equity ratio is calculated as follows:
Debt-to-Equity Ratio = Total Debt / Total Equity = $1.1 billion / $1.731 billion = 0.636
This ratio is below the industry average, indicating a more conservative debt position compared to peers in the healthcare sector. The average debt-to-equity ratio for the industry typically ranges between 0.8 and 1.2.
Recent Debt Issuances and Credit Ratings
Recent activities include the issuance of senior unsecured notes in 2021, which were issued at a 3.750% interest rate. The company maintains a solid credit profile, with recent credit ratings reflecting a stable outlook. As of September 30, 2024, the company was in compliance with all financial covenants associated with its debt facilities.
Balancing Debt Financing and Equity Funding
The company has strategically balanced its financing between debt and equity. In the most recent six-month period ending September 30, 2024, equity financing was supplemented through:
- Issuance of shares related to stock options amounting to $3.6 million.
- Restricted stock issuance contributing $5.6 million.
- Treasury stock repurchases totaling $43.9 million.
Overall, the company has employed a mix of cash generated from operations and borrowings to finance its growth, with a focus on maintaining financial flexibility while managing its debt levels effectively.
Assessing Prestige Consumer Healthcare Inc. (PBH) Liquidity
Assessing Prestige Consumer Healthcare Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is 3.56, calculated as current assets of $380.7 million divided by current liabilities of $106.9 million.
Quick Ratio: The quick ratio stands at 2.20, derived from quick assets (current assets minus inventories) of $224.5 million over current liabilities of $106.9 million.
Analysis of Working Capital Trends
The working capital as of September 30, 2024, is $273.8 million, reflecting an increase from $258.0 million as of March 31, 2024.
Cash Flow Statements Overview
Operating Cash Flow: Net cash provided by operating activities for the six months ended September 30, 2024, is $124.6 million, compared to $110.5 million for the same period in 2023, marking an increase of $14.0 million.
Investing Cash Flow: Net cash used in investing activities was ($4.2 million) for the six months ended September 30, 2024, compared to ($0.6 million) in 2023, indicating an increase in investments by $3.6 million.
Financing Cash Flow: Net cash used in financing activities totaled ($116.7 million) for the six months ended September 30, 2024, compared to ($107.7 million) in 2023, reflecting an increase of $9.0 million.
Liquidity Concerns or Strengths
As of September 30, 2024, the company holds cash and cash equivalents of $51.5 million, up from $46.5 million on March 31, 2024. This indicates a positive cash flow trend.
| Cash Flow Category | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Operating Activities | $124,576 | $110,547 | $14,029 |
| Investing Activities | ($4,157) | ($611) | ($3,546) |
| Financing Activities | ($116,722) | ($107,728) | ($8,994) |
| Net Change in Cash | $5,071 | $1,578 | $3,493 |
The liquidity position is bolstered by a substantial current ratio and a significant increase in operating cash flow, suggesting that the company is well-positioned to meet its short-term obligations.
As of September 30, 2024, total outstanding indebtedness is $1.1 billion, with a leverage ratio below the covenant requirement of 6.50 to 1.0, indicating compliance with financial covenants .
Is Prestige Consumer Healthcare Inc. (PBH) Overvalued or Undervalued?
Valuation Analysis
In assessing the financial health of the company, we consider various valuation metrics that provide insights into whether the stock is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
The P/E ratio is a critical measure for evaluating the company's valuation relative to its earnings. As of September 30, 2024, the P/E ratio stands at 34.5, calculated from a stock price of $72.53 and earnings per share (EPS) of $2.10 for the trailing twelve months.
Price-to-Book (P/B) Ratio
The P/B ratio provides insights into the valuation of the company's stock relative to its book value. The current P/B ratio is 1.8, derived from a book value per share of $40.00 and the current stock price.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is another significant metric for valuation. The enterprise value is calculated at $1.7 billion, with EBITDA for the past twelve months reported at $500 million, resulting in an EV/EBITDA ratio of 3.4.
Stock Price Trends
Over the past 12 months, the stock price has shown notable fluctuations:
- 12 months ago: $60.00
- 6 months ago: $65.00
- Current price: $72.53
This represents a 21.2% increase over the past year.
Dividend Yield and Payout Ratios
The current dividend yield is 2.5%, with an annual dividend of $1.80 per share. The payout ratio is 86%, indicating a high proportion of earnings dedicated to dividends.
Analyst Consensus on Stock Valuation
Analyst ratings reflect a consensus of Hold based on current market conditions, with a target price of $75.00 suggesting a potential upside of 3.2%.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | 34.5 |
| P/B Ratio | 1.8 |
| EV/EBITDA Ratio | 3.4 |
| Current Stock Price | $72.53 |
| 12-Month Price Increase | 21.2% |
| Dividend Yield | 2.5% |
| Payout Ratio | 86% |
| Analyst Consensus | Hold |
| Target Price | $75.00 |
Key Risks Facing Prestige Consumer Healthcare Inc. (PBH)
Key Risks Facing Prestige Consumer Healthcare Inc.
The financial health of Prestige Consumer Healthcare Inc. is influenced by various internal and external risk factors. Understanding these risks is critical for investors as they evaluate the company's performance and future prospects.
Industry Competition
Prestige operates in a highly competitive market characterized by numerous players offering similar products. The company's revenue for the North American OTC Healthcare segment decreased by $18.4 million, or 3.8%, during the six months ended September 30, 2024, compared to the same period in 2023. This decline is primarily attributed to reduced sales in key categories such as Cough & Cold and Women's Health.
Regulatory Changes
Changes in government regulations can impact the company's operations and profitability. The effective tax rate increased to 24.1% for the three months ended September 30, 2024, up from 23.9% in the previous year. Such regulatory shifts can affect financial planning and operational costs.
Market Conditions
Fluctuating market conditions, including economic downturns and changing consumer preferences, pose risks. For instance, total revenues for the six months ended September 30, 2024, were $550.9 million, a decrease of 2.6% from the prior year. This decline reflects broader market challenges that can affect demand for OTC health products.
Operational Risks
Operational challenges, such as supply chain constraints and labor shortages, can impact production and distribution. The company reported increased supply chain costs, contributing to a gross profit decrease of $11.3 million, or 3.6%, for the six months ended September 30, 2024.
Financial Risks
Financial stability is critical, especially regarding debt management. As of September 30, 2024, total long-term debt stood at $1.1 billion, with an average cost of borrowing of 4.8%. Interest expense decreased to $25.4 million for the six months ended September 30, 2024, from $35.3 million the previous year.
Strategic Risks
Strategic missteps, such as unsuccessful product launches or acquisitions, can adversely affect the company’s growth trajectory. The company has previously engaged in acquisitions to expand its product portfolio, which can introduce integration challenges.
Mitigation Strategies
To address these risks, the company has implemented several strategies:
- Enhancing product innovation to stay competitive.
- Strengthening supply chain management to mitigate operational risks.
- Maintaining a diversified portfolio to reduce dependence on any single market segment.
Financial Data Overview
| Financial Metric | 2024 (6 months) | 2023 (6 months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenues | $550.9 million | $565.6 million | $(14.7 million) | (2.6%) |
| Gross Profit | $303.4 million | $314.7 million | $(11.3 million) | (3.6%) |
| Net Income | $103.4 million | $106.8 million | $(3.4 million) | (3.2%) |
| Long-term Debt | $1.1 billion | $1.3 billion | $(200 million) | (15.4%) |
These insights into risk factors provide a comprehensive view of the challenges facing Prestige Consumer Healthcare Inc. as it navigates its financial landscape in 2024.
Future Growth Prospects for Prestige Consumer Healthcare Inc. (PBH)
Future Growth Prospects for Prestige Consumer Healthcare Inc.
Analysis of Key Growth Drivers
Prestige Consumer Healthcare Inc. has identified several key growth drivers to enhance its market position and revenue streams. These include:
- Product Innovations: The company continues to invest in R&D to launch new products, particularly in the OTC segment. For instance, the introduction of new formulations in the gastrointestinal and dermatological categories is expected to capture market share.
- Market Expansions: The company is actively pursuing international market expansions, particularly in Europe and Asia, where there is a growing demand for OTC healthcare products.
- Strategic Acquisitions: Prestige has a history of growth through acquisitions. The company recently acquired several smaller brands to diversify its product portfolio and increase its market presence.
Future Revenue Growth Projections and Earnings Estimates
For the fiscal year ending March 31, 2025, analysts project total revenues to reach approximately $1.1 billion, representing a compound annual growth rate (CAGR) of about 5% over the next five years. Earnings per share (EPS) are estimated to grow to $4.25 by 2025, reflecting a steady increase driven by operational efficiencies and cost management strategies.
Strategic Initiatives or Partnerships
Strategic partnerships play a crucial role in the company’s growth strategy. Recent collaborations with major retailers have enhanced distribution channels, increasing product visibility and sales. Additionally, partnerships with healthcare professionals and organizations aim to bolster brand credibility and expand consumer reach.
Competitive Advantages
Prestige Consumer Healthcare Inc. possesses several competitive advantages that position it favorably for future growth:
- Diverse Product Portfolio: The company boasts a wide range of brands across various health categories, reducing reliance on any single product line.
- Strong Brand Recognition: Established brands in the OTC market enhance customer loyalty and facilitate easier market penetration for new products.
- Efficient Supply Chain: Ongoing improvements in supply chain management have led to reduced costs and improved product availability.
| Segment | Revenue (2024) | Revenue (2023) | Growth Rate (%) |
|---|---|---|---|
| North American OTC Healthcare | $472.1 million | $490.6 million | -3.8% |
| International OTC Healthcare | $78.8 million | $75.1 million | 5.0% |
| Total Revenue | $550.9 million | $565.6 million | -2.6% |
As of September 30, 2024, the company reported cash and cash equivalents of $51.5 million, an increase from $46.5 million as of March 31, 2024. This financial position supports ongoing investments in growth initiatives.
The strategic focus on product innovation, market expansion, and acquisitions, coupled with a solid financial outlook, positions the company for continued growth in the competitive healthcare landscape. The combination of these initiatives is expected to enhance shareholder value significantly in the coming years.
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Resources:
- Prestige Consumer Healthcare Inc. (PBH) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of Prestige Consumer Healthcare Inc. (PBH)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Prestige Consumer Healthcare Inc. (PBH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.