Prestige Consumer Healthcare (PBH -10.64%), the over-the-counter (OTC) healthcare product company behind brands such as Clear Eyes, Monistat, and Chloraseptic, released its first-quarter results for fiscal 2026 on August 7, 2025. The most vital news was that GAAP revenue and earnings per share both fell short of expectations, mainly due to supply constraints in its North American Eye & Ear Care business and some orders that were accelerated into Q4 FY2025. Revenue (GAAP) was $249.5 million, below the analyst estimate of $266.9 million (GAAP) and down 6.6% from the prior year period. Non-GAAP diluted earnings per share (EPS) came in at $0.95, missing the GAAP EPS estimate of $1.04 but Non-GAAP diluted EPS increased 5.6% from $0.90 in Q1 FY2025 to $0.95 in Q1 FY2026. Overall, the quarter reflected both persistent challenges in certain product lines and positives such as improved margin and higher non-GAAP free cash flow.
| Metric | Q1 FY26(ended Jun 30, 2025) | Q1 Estimate | Q1 FY25(ended Jun 30, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.95 | N/A | $0.90 | 5.6% |
| Revenue (GAAP) | $249.5 million | N/A | $267.1 million | (6.6%) |
| Free Cash Flow (Non-GAAP) | $78.2 million | $53.6 million | 45.9 % | |
| Non-GAAP EBITDA | $79.6 million | $79.7 million | (0.1 %) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q4 2025 earnings report.
Company Overview and Business Drivers
Prestige Consumer Healthcare (PBH -10.64%) is a leading provider of branded OTC healthcare products. Its portfolio includes well-known remedies across categories such as eye care (Clear Eyes), feminine care (Monistat, Summer’s Eve), sore throat relief (Chloraseptic), and wart removal (Compound W). These brands enjoy high market recognition, with 61.5% of annual revenue in FY2025 coming from products that held top market positions in their respective categories.
The company’s recent business strategy has prioritized maintaining leadership brands, ongoing product innovation, and expanding its portfolio through targeted acquisitions. Key drivers of performance include effective distribution through both retailers and e-commerce, strong brand management, and careful regulatory compliance. Success depends on the ability to keep popular products available and fresh in a crowded OTC landscape, as well as to manage risks in its supply chain.
Quarter Highlights: Financial Performance, Operations, and Corporate Moves
Revenue (GAAP) declined 6.6%, primarily attributable to two factors. First, Supply constraints limited shipments of the Clear Eyes eye care line. Clear Eyes is the #2 brand in the Redness Relief segment of Eye & Ear Care in North America. Management identified this as the largest single drag on performance, compounding the sales impact from orders pulled forward into the prior quarter totaling around $7 million. These issues led to an approximate 8.5% drop in North American OTC healthcare revenue (GAAP) compared to the same period last year, from $232.3 million to $212.6 million.
International OTC healthcare revenue, however, rose 6.1% to $37.0 million, with growth reported across several regions. Sales outside North America benefited from strong performance throughout the branded portfolio and broad geographic gains. This diversification helped mitigate some of the shortfall from Clear Eyes in the domestic market.
Non-GAAP EBITDA margin also edged up, and Non-GAAP free cash flow was $78.2 million, a 45.9% increase from the prior year. The company attributed this cash generation to favorable working capital movements and lower interest expenses. Advertising and marketing expenses declined compared to Q1 FY2025, reflecting reduced spending in response to lower sales volume, without impacting brand-building activities. General and administrative costs were essentially flat.
One of the most significant moves during the period was the announced acquisition of Pillar5 Pharma, the primary supplier of Clear Eyes. Prestige expects this move to address short- and long-term supply issues in the high-demand eye care market. This supply chain strategy responds directly to recent disruptions and seeks to ensure consistent product availability for one of its core brands.
Prestige’s other product families, such as Q4 launches of Summer’s Eve Whole Body Deodorant Creams (feminine deodorant) and Dramamine Advanced Herbals For Kids (children’s motion sickness remedy), reflect an ongoing emphasis on product innovation. While this innovation pipeline is a focus, new launches during the period were not enough to offset operational headwinds in eye care.
Management Outlook and Investor Considerations
After the slower performance, management revised its full-year FY2026 outlook downward. Forecasted revenue for FY2026 now stands at $1.10–$1.115 billion, down from the previous range of $1.14–$1.155 billion. The company projects non-GAAP organic revenue may decline by as much as 3% in FY2026, compared to its earlier expectation of 1–2% growth. Adjusted diluted EPS guidance was lowered to $4.50–$4.58 for FY2026, down from the earlier $4.70–$4.82 range. Free cash flow guidance remains unchanged at $245 million or more (non-GAAP).
The guidance revision primarily reflects ongoing supply chain difficulties expected to persist into Q2 FY2026, especially for Clear Eyes. Management voiced confidence in a stronger second half of FY2026, driven by anticipated recovery in eye care sales as supply constraints ease and the Pillar5 acquisition is finalized. Investors should continue to monitor the pace of inventory normalization for Clear Eyes and potential further disruptions across key brands, as well as the impact of any future acquisitions or strategic moves intended to insulate supply chain vulnerabilities. The company’s solid cash position and moderate leverage offer flexibility as it works through these operational challenges.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
