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Prestige Consumer Healthcare Inc (NYSE:PBH)
Q1 2020 Earnings Call
Aug 1, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Prestige Consumer Healthcare Q1 2020 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Phil Terpolilli, Director of Investor Relations. Please go ahead.

Phil Terpolilli, -- Director of Investor Relations.

Thank you, operator, and good morning to everyone joining us today. On the call with me are Ron Lombardi, our Chairman, President and CEO; and Christine Sacco, our CFO. On today's call, we will cover the highlights and review the results of our fiscal '20 first quarter, review our fiscal 2020 outlook and then take questions from analysts. We have a slide presentation which accompanies today's call that can be accessed by visiting prestigeconsumerhealthcare.com, clicking on the Investors link and then on today's webcast and presentation. Please remember some of the information contained in the presentation today includes non-GAAP financial measures.

Reconciliations between adjusted and reported financial measures are included in today's earnings release and slide presentation. During today's call, management will make forward-looking statements around risks and uncertainties, which we detail in a complete safe harbor disclosure on Page 2 of the slide presentation accompanying the call. Additional information concerning risk factors and cautionary statements are available on our most recent SEC filings and most recent company 10-K. I'll now hand it over to our CEO, Ron Lombardi, to walk through the highlights of our first quarter performance. Ron?

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

Thanks, Phil, and good morning, everyone. Let's begin on slide five. We are pleased with our solid start to the year and are on pace to achieve our fiscal year guidance. Q1 highlights include revenue of just over $232 million, which was approximately flat to the prior year on an organic basis in the quarter, slightly ahead of our expectations offered back in May. Importantly, the consumption trends for our leading portfolio remain positive and we continue to expect approximately 2% consumption growth for the full year. EPS of $0.65 in Q1 was as anticipated given the divestiture of the Household Cleaning segment last July, which we have now fully lapped.

Finally, we generated approximately $51 million of free cash flow in the quarter which allowed us to repurchase shares opportunistically as well as reduce debt. Our capital allocation strategy continues to be enabled by our strong financial profile and consistent cash generation. Turning to slide six, we have further details around Q1 results. As I've just mentioned, our net sales were $232.2 million, essentially flat versus the prior year on an organic basis. Sales were positively impacted by strong top line results in our International segment with growth of over 15% after adjusting for FX. The performance was driven by both strong consumption trends in Australia and the timing of distributor orders in other countries.

Domestic sales were positively impacted by a number of categories, including strength in cough/cold and ear/eye care, but offset by retailer inventory reductions and changes at shelf in the oral care category. Women's Health performance continues to experience positive consumption trends, but sales also declined in Q1 affected by the timing of orders as compared to the prior year. Total company gross margin in Q1 came in at 57.7%, slightly improved sequentially versus fourth quarter's 57.4% gross margin. Free cash flow was $50.8 million in Q1 and continues to benefit from our industry-leading EBITDA margin, minimal capital spending needs and low cash tax rate.

We used this cash flow toward our disciplined capital allocation strategy in Q1, opportunistically buying back approximately $30 million of stock and reducing debt by $20 million. Now let's turn to slide seven for some details on our Canadian business. In addition to our fast-growing International business, we also have an important and growing portfolio in Canada, which represents about 5% of our annual sales. The Canadian portfolio is comprised of similar brands to the U.S. and is made up of many leading number1 brands in niche categories.

We have a few examples of these shown in the upper right of the slide. In addition, our Canadian portfolio is anchored by Gaviscon, which has grown steadily since we acquired the brand back in 2012. In many ways our playbook in Canada is similar to the U.S. We successfully execute a wide-ranging, brand-building playbook by leveraging leading positions and iconic brands. As an example, we continued to expand our communications around Gaviscon by sharing with consumers the benefits of having one product to both treat and protect against heartburn.

This message is communicated with our iconic Gaviscon blue-man campaign that are memorable to consumers. Consumer insights are also an important focus as we look for innovation opportunities. This has led to new products like Sleep-eze Minis and Gaviscon Extra Strength Liquid, launched in the past year, in addition to bringing innovation from our U.S. business to Canada. As shown in the left-hand side of the slide, we've experienced healthy sales growth in excess of 3% in our Canadian business. The performance is driven by our brand-building strategy and portfolio positioning, each of which has set the stage for continued success.

Now let's turn to slide eight. The key to our success comes from being a brand-building organization, with our principal objective of positioning our core brands for long-term growth. An example of this is DenTek, which is one of our 5 core brands that makes up half of our company's sales. Fiscal '19 was a challenging year for DenTek due to certain retailer changes at shelf, but we feel good about the strategic positioning for the brand and our ability to execute a long-term brand-building strategy. Acquired in 2016, the DenTek brand has many opportunities to win with consumers and retailers.

DenTek is a leader in the fragmented peg section of the store, competing across dental guards, floss picks, interdental brushes, oral care accessories and pain relief subsections of the oral care aisle. We collaborate with retail partners by educating them around the growing oral healthcare category and how to best organize a hard-to-shop section of the store. We then work with our partners to help develop an optimal mix of products across the category, as well as merchandising initiatives with the end goal of driving incremental peg-section sales and increased household penetration.

One example of this is DenTek Dental Guard. Dental guards, which represents about a quarter of DenTek's product mix, is a highly differentiated category where our brand enables retailers to add a high dollar and margin item to a growing category in their oral care aisle. In this space we are executing our time-tested brand-building efforts to help increase household penetration and drive market share gains for DenTek. We differentiated our brand by launching a lightweight DenTek Ultimate Guard and supported this effort by various brand-building efforts including memorable TV campaigns that emphasize the damage that can be caused by nighttime teeth grinding. The strategy is working.

We've outperformed the overall dental guard category by a factor of 4 year-to-date and we continue to expand our #1 positioning in this space. By executing these types of efforts across the DenTek portfolio we feel good about the strategic position for the brand and our ability to drive growth over time. Before I turn the call over to Chris, I'd like to comment on our upcoming transition around logistics, mentioned in today's press release. Following the divestiture of our Household Cleaning business we performed an extensive analysis to determine the most optimal location and partner for our nationwide third-party distribution center to best service our retail partners.

The result of this review was a decision to transition to a new third-party logistics provider and warehouse near Indianapolis with an expected completion in the spring of next year. We will provide additional information and updates during the year as we make progress on the transition. Chris will provide additional details on the financial aspects of this change as well.

With that, I'll turn it over to Chris to walk through Q1 financials in greater detail.

Christine Sacco -- Chief Financial Officer

Thank you, Ron. Good morning, everyone. I'll walk through our first quarter financial results in greater detail and offer some updated context around our expectations for fiscal '20 by line item. As a reminder, the information in today's presentation includes adjusted results for the prior year that are reconciled in our earnings release. On slide 10 you can see our high-level first quarter results which include flat organic revenue of approximately $232 million and a slight EPS decline of $0.03 per share versus the prior year, impacted by $0.04 per share of Household Cleaning that was included in the prior year. Adjusted EBITDA also declined versus prior year due to the divestiture of Household. As Ron noted earlier, we will fully lap the comparison impacts of Household Cleaning beginning in Q2.

Now let's turn to slide 11 where I'll discuss consolidated first quarter results. For the first quarter fiscal '20 our net revenues decreased 8.6% to $232.2 million but were flat after excluding the effects of the Household divestiture and FX. Our top line was also impacted by retailer inventory reductions as assumed in our full year outlook. Gross margin was 57.7% for the first quarter, up 30 basis points sequentially. Looking ahead, we still expect full year fiscal '20 gross margin of approximately 57 1/2%. In terms of A&P, we came in at 15% of revenue in Q1. As a reminder, we expect A&P spend to approximate 14 1/2% of sales for the full year, with higher A&P spend in the first half versus second half.

Our G&A spending was about 9% of total revenues in the first quarter but was down slightly in dollars versus prior year, reflecting modest deleveraging as a result of the divestiture of Household. We reported earnings per share in Q1 of $0.65, representing a slight decline versus the prior year due to the Household Cleaning divestiture, as discussed previously. EPS was also impacted by a slightly higher than anticipated tax rate due to the impact of certain discrete items. We continue to expect a 25 1/2% effective tax rate for the full year. Now let's turn to slide 14 to discuss our first quarter cash flow. For Q1 we generated approximately $51 million in free cash flow, down slightly versus prior year due to the sale of Household.

In the quarter we utilized $28.8 million of the $50 million share repurchasing program authorized in May, repurchasing just under 1 million shares. In July we completed the remaining authorized buyback and therefore expect to focus on additional debt reduction for the balance of our fiscal year. Given share repurchase efforts in the quarter and the loss of the Household segment cash flow, our net debt at June 30 was effectively unchanged sequentially at approximately $1.8 billion, equating to a leverage ratio of 5x. Given the complete use of our share repurchase program, we now anticipate leverage of approximately 4.7x by our fiscal year end. Last, regarding the transition to the new third-party logistics provider Ron discussed earlier, we expect to incur approximately $10 million in one-time costs over the balance of fiscal '20.

I'll now turn it back to Ron for a discussion surrounding our fiscal '20 outlook and some closing remarks.

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

Thanks, Chris. Let's wrap up on slide 14. We are off to a solid start for the fiscal year, driven by the continued success of our strategy. For net sales, we continue to expect fiscal '20 to be in the range of approximately $951 million to $961 million. We continue to anticipate organic revenues to be approximately flat versus the prior year, with Q2 revenues down modestly year-over-year.

We continue to expect fiscal '20 adjusted EPS in the range of $2.76 to $2.83, although we now anticipate being at the higher end of our outlook, given our recent opportunistic share repurchase. EPS is still expected to be weighted more heavily in the second half due to the timing of A&P and G&A spend compared to the first half of fiscal '20. Regarding cash flow, we still expect full year adjusted free cash flow of $200 million or more for the year. So in summary, one quarter into the year we feel good about our guidance and growth prospects.

First, our top line results experienced solid consumption trends, market share wins and strong international growth. Second, our financial profile was stable in Q1 with consistent and strong cash flows and margins. Finally, we continued to effectively allocate capital, both reducing debt and repurchasing stock in the quarter. These recent developments and our long-term success are underpinned by our proven 3-pillared strategy. The company has a strong record of providing long-term growth through brand heritage, product innovation and channel development and we will continue in these efforts to drive similar results for the balance of fiscal '20 and beyond.

With that, I'd like to turn it over to the operator for questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] And our first question comes from Joe Altobello from Raymond James. Your line is now open.

Joe Altobello

Hey guys. Good morning. This is Adam on for Joe. I just wanted to ask, with inventories up 9% and sales down 9% we'd just appreciate a little more clarity in reconciling this and then perhaps a bit more color on the destocking trends, the headwind for the rest of the fiscal year.

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

So let me let Chris take the inventory question and then I'll comment on the destocking. Chris?

Christine Sacco -- Chief Financial Officer

Yes. So really 2 factors impacting the inventory; one, we're starting to prepare for the warehouse move that we mentioned on the call today. So we'll start to see that ramp up and then it will come back down as we work through the transition. And we also built a little bit of inventory ahead of an SAP go-live at our Lynchburg facility during the quarter. So that will come back during the rest of the year as well.

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

So in terms of destocking, Adam, we continued to destocking largely concentrated in the drug channel during the quarter. Continues to be in line with what we expected not only in the first quarter but what we expect for the full year as well.

Adam Scott Kozek -- Raymond James & Associates -- Analyst

Thanks, Ron and Chris. I appreciate that. And then if I could ask one more follow-up here, I was looking at the OTC gross margin having -- declining for 3 years now, down again in the June quarter. If you could provide a little more color there, that would be helpful. And I was also looking at International gross margin being down rather significantly. So I know that that could obviously be volatile from quarter to quarter and you are lapping a tough comp, but just wanted -- just was curious what was going on there.

Christine Sacco -- Chief Financial Officer

Yes, Adam. So if I start with North America, remember if you're looking over time we have certain stranded costs from Household that have remained now with the business. And we've also talked about the BC & Goody's packaging transition which has impacted our margins in the North American business. On the International front if you look back over time the prior year Q1 was really a bit more of an anomaly than this quarter. As you mentioned, that business can be a bit lumpy given the distribution nature of it and so product and channel mix can really impact it. So I would say the current quarter was more indicative of the International gross margins.

Adam Scott Kozek -- Raymond James & Associates -- Analyst

Great. Thanks Chris. Thanks guys I'll get back with you.

Operator

Thank you. And our next question comes from Jon Andersen from William Blair. Your line is now open.

John Andersen -- William Blair. -- Analyst

Good morning everybody. Going back to the inventory destocking for a minute, are you -- kind of a quarter in here I guess to the fiscal year, Ron, is the destocking that you're seeing is it really just isolated to the drug retail channel or is there still work being done more broadly across channels? And then what kind of visibility do you have? Is this just really kind of a hold-your-breath-every-quarter kind of situation with respect to inventory destocking? Or is there a certain amount of visibility based on your assessment of where inventory levels are in a given channel and conversations with a given retailer?

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

So the first part of that question is in terms of where are we seeing the destocking, as anticipated it's largely concentrated in the drug channel although there is some impact, as expected, as we see some regional retailers close or meaningfully scale back. But that's as expected. So at this point it continues to be in line with what we thought we would see going into the year, at this point. And in terms of insight, again, the retailers really don't share with us advance plans of what they expect. So it really is a little bit of hold our breath each quarter. And we've talked about this over the past years, where it kind of comes out of nowhere in a given quarter. So we don't get a lot of insight into it.

John Andersen -- William Blair. -- Analyst

Okay. Can you talk a little bit about pricing and private label? How has price trended across your portfolio? I know it may vary quite a bit by brand, but pricing in aggregate if you could comment on and then your core brand performance versus, say, private label in aggregate across your portfolio, any changes.

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

Sure. You know, our portfolio being based on leading brands really puts us in a good position in terms of managing price over the long term. And we've actually started to take some price increases over the last couple of quarters. But it really is managed strategically over time. In terms of our positioning versus private label, we continue to take share and grow the market categories with our retailer partners. So that trend continues as it has over the long term.

John Andersen -- William Blair. -- Analyst

Okay. And you made a comment during the prepared remarks that the Women's Health business I think consumption was up but sales were down due to timing. I think there are 2 big brands in that platform for you with Monistat and Summer's Eve. Could you talk a little bit about how those both from a consumption standpoint and maybe just timing issue, how those brands are performing and how you think about those brands in terms of their growth potential moving forward?

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

Sure. Both Summer's Eve and Monistat had solid consumption trends during the quarter and we continue to feel good about their ability to grow for the full year. During the quarter it was really timing versus activity last year. So for Summer's Eve we had more new product launches during the quarter last year than this year, so it was really a comp issue. And then this year it was really the result -- excuse me -- for Monistat this year was a change in SKU offering that we made that impact the timing of some retailer orders. So in both cases it really was just the cadence of orders versus the prior year, with both realizing solid consumption trends during the quarter.

John Andersen -- William Blair. -- Analyst

Okay. And just some rationale on the logistics, some more rationale on the logistics provider change. It seems like a big deal. I think you've been working with the same provider now for a decade or more out of St. Louis, a St. Louis facility. Can you talk about what you're really hoping to achieve through this move? Thank you.

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

Sure. So the St. Louis location really is a legacy location, driven by the Household business. St. Louis was local to both the supplier of Spic and Span and Comet. And you're shipping truckloads of bottles of water and cans of crushed rock, so inbound and outbound freight was very meaningful for that part of the business. So with the divestiture of the Household business it gave us the opportunity to step back and evaluate where was the best location for the consumer healthcare business.

So that was the primary driver; was all around where to be -- where's the best location for service for our retailers. In addition to that we will get some modest cost savings over time that we'll reinvest back into higher levels of A&P and other growth initiatives over time which would be consistent with our strategy.

Operator

Thank you. And our next question comes from Steph Wissink from Jefferies. Your line is now open

Stephanie Marie Schiller -- Jefferies LLC -- Analyst

Most of our questions have been asked already but, Chris, this is for you maybe on the guidance. One of the points of confusion this morning is just on the underlying guidance versus the inclusion of the logistics change. Just want to make absolutely clear that the underlying guidance is not changing, is that correct, for either EPS or for the cash flow? You're just adding back the adjustment for this logistics change in the full year numbers now.

Christine Sacco -- Chief Financial Officer

That's correct.

Stephanie Marie Schiller -- Jefferies LLC -- Analyst

Okay. So then the final question would be just with respect to destocking. I know we keep coming back to this theme. But are you seeing any sort of thinning out in the amount of destocking that's happening broadly across the space, or seeing any relief regarding the degree of pressure? Or has it been pretty consistent throughout the cycle of destocking?

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

I would say, Steph, it's been fairly consistent in that it was kind of the slow drip during the first quarter where overall order patterns in the drug channel were below consumption trends. As a matter of fact we actually saw good consumption trends in the drug channel, which was a bit of a reverse in trends for us. So we're hoping that that will help relieve some of the pressure as we see an increase in consumption trends in that channel. But overall, really no change from what we've been realizing over the last 6 to 8 quarters in that channel.

Stephanie Marie Schiller -- Jefferies LLC -- Analyst

Okay. And just a final one is as you're talking with your buyers in that channel and they're looking at their average weeks of supply and starting to try to think about what the appropriate level of weeks of supply is, any sense that we're getting toward the end of this phase of destocking or getting close to the end? How should we think about average weeks of supply in the marketplace relative to consumption trends and weekly sales?

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

Yes. I guess first comment is generally the inventory levels are managed outside of the buyers at the retailers for -- in most cases. So that's the first part. The second is that I think the big retailers are on a long journey in terms of slowly reducing their inventory over time. So once it really normalizes and gets in the base of our business we won't see a change from year to year as we go forward.

Stephanie Marie Schiller -- Jefferies LLC -- Analyst

Okay. That's very helpful. Thanks for all the detail.

Operator

Thank you. And our next question comes from Linda Bolton-Weiser from D. A. Davidson. Your line is now open

Linda Ann Bolton -- Weiser, D.A. Davidson & Co -- Analyst

Again, I don't mean to focus overly on the destocking, but just another question on that. Have you done any benchmarking or looking at competitors who also compete in the OTC space to see if they're experiencing and to what extent the same thing, so like a Day and Day or a Perrigo or a Church & Dwight? And then, secondly, is it maybe because you carry mostly niche products whereas those other guys are carrying bigger, higher-velocity items? And is that why maybe you're more affected by the destocking than some of the other competitors? Or can you just comment on what you think you are experiencing versus competitors in the same space?

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

Yes. In general, based on the publicly available information, it seems that the competitive set is largely feeling the same headwinds that we are, although to a lesser extent. We're more concentrated in the drug channel than most of the other competitors, especially the larger competitors who may have a business that is more balanced on the international side of things, for example.

So you don't necessarily hear them talk about it as much because it has a smaller impact on their business than it does us. So our information that we're getting back from the retail partners and what we're hearing is that we're all in the same boat and niche categories or large categories are all being treated the same, where the retailers are trying to be more effective with the inventory that they have in their stores and in their warehouses in a declining front-of-store sales environment.

Linda Ann Bolton -- Weiser, D.A. Davidson & Co -- Analyst

Okay. And then just since you highlighted DenTek today, the IRI data -- and I know it's not completely representative -- but some of your stuff looks fine. But DenTek actually looks more negative than some of the other products. Is that just the comparison of the loss of space versus last year? Or why does the data look so poor, the consumption data? And then can you talk about -- you mentioned there could be some Dental Guard distribution opportunity. It seemed that you might be saying that. Can you give us some idea of how many doors that carry the picks and other products also carry the Dental Guard?

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

Yes. So a number of questions in there. First of all, we gave an update on DenTek today so that we could bring you up to speed on our ongoing focus of continuing to get DenTek back on a long-term growth trajectory. Our outlook for sales this year are still above what the trailing sales were for the business at the time of the acquisition. So we've been able to grow the business modestly since we've acquired it.

And we continue to have plans to invest and get it back on a growth trajectory. So that was the intent of today's update. In terms of distribution, we've got high levels of ACV for both dental guards and the rest of the DenTek offering, so it's out there in all the major retailers on a national basis. So there's no difference there for the brand. And the final comment is that we did realize declining sales during the first quarter in totality and, again, we're focused on it and looking to get that brand over the long term back to a growth trajectory.

Operator

Thank you. And the next question comes from Frank Camma from Sidoti. Your line is now open

Frank Anthony Camma -- Sidoti & Company -- Analyst

First, I promise not to ask a question about destocking. That's my first thing. My big thing, and I'm surprised nobody's asked it, is I felt other than destocking the biggest reason your stock has pulled back is leverage. And fast forward 6 months ago, 7 months ago the world was coming to an end with interest rates going up 3, 4 times, whatever it was. Now we think it's going to go down 2 to 3 times.

So can you talk about how that's affected your view on guidance and how we should think about that? Because I would think, since your stock was hit because of its leverage, it should therefore benefit the other way, which it has maybe a little bit, but not so far reflected in the stock.

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

Okay. I guess let me start with a couple of comments and I'll let Chris add on at the end in terms of our outlook. Even though it looks like there may be some delay in rising interest rates, I think over time though they're going to go back up at some point. So our strategy of getting our leverage level.

Frank Anthony Camma -- Sidoti & Company -- Analyst

It's hard to go down from 0, so.

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

Yes. Well, I mean, it's not quite at 0 yet, right?

Frank Anthony Camma -- Sidoti & Company -- Analyst

Correct.

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

It's somewhere between 2% and 2 1/4%, so. But it is up from 0.

Frank Anthony Camma -- Sidoti & Company -- Analyst

Sure.

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

So let's not forget that. But we still think that moving our targeted leverage rate down from 4.5 to sub-6 to 3.5 to 5 or so is still the right thing to do long term to provide flexibility in growth opportunities for the business. So the recent change in Fed activity doesn't have us rethink that focus. Chris, do you have .

Frank Anthony Camma -- Sidoti & Company -- Analyst

But do you think you -- OK, I'm sorry, but did it make you think sort of the timing your stock buyback? Because I guess you did it last year at the beginning of the year, but was there some thought in that given we saw maybe a different outlook for when rates would change? Or was that really so nominal that you didn't think about it that way?

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

We really didn't think about it that way, Frank. Remember, we're only utilizing a quarter of our free cash flow for the share repurchase, so --

Frank Anthony Camma -- Sidoti & Company -- Analyst

Okay. The other question is just on timing of the A&P spend. Could you just remind me? I know the second quarter is always typically your high A&P spend, but why is that now, given where your portfolio is, a little more or less seasonal than it has been if you go back years ago? So why is Q2 sort of slanted that way as a percent of revenue?

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

It really is just a function of the timing of our A&P initiative during the year, Frank, rather than a decision to concentrate spending at any given time of the year. It really is based on what's best to support new product launches or other initiatives or opportunities in the marketplace.

Frank Anthony Camma -- Sidoti & Company -- Analyst

Okay. But it has nothing to really do with the seasonality of the revenue is what I was getting at.

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

No, it doesn't.

Operator

Thank you. [Operator Instructions] And our next question is from Jon Anderson from William Blair. Your line is now open

Jon Robert Andersen -- William Blair & Company -- Analyst

I just had a quick follow-up. I just wanted to come back to an earlier question on guidance. You've expressed earlier I think greater confidence in the high end of your EPS guidance range. Is that, number one, accurate? And what has changed, to the extent that anything has changed, that gives you greater confidence that the high end's more likely than, say, the midpoint.

I know we're not talking about a lot -- a big range here, but just any thoughts there would be terrific. And I just wanted to confirm again that you pointed to the high end this time around as opposed to last time.

Christine Sacco -- Chief Financial Officer

Jon, this is Chris. So confirming that, yes, this time we are pointing to the high end of the range. And the primary driver of that really is the share repurchase.

Operator

Thank you. And that concludes our question-and-answer session for today. I'd like to turn the conference back over to Ron Lombardi for closing remarks.

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

Thank you, operator, and thank you to everyone for taking time to join us today. We're encouraged by our Q1 results and look forward to executing our disciplined 3-pillar strategy in coming quarters and talking with everyone again in Q2. Have a great day.

Operator

[Operator Instructions]

Duration: 35 minutes

Call participants:

Phil Terpolilli, -- Director of Investor Relations.

Ronald M. Lombardi -- Chairman, President and Chief Executive Officer

Christine Sacco -- Chief Financial Officer

Joe Altobello

Adam Scott Kozek -- Raymond James & Associates -- Analyst

John Andersen -- William Blair. -- Analyst

Stephanie Marie Schiller -- Jefferies LLC -- Analyst

Linda Ann Bolton -- Weiser, D.A. Davidson & Co -- Analyst

Frank Anthony Camma -- Sidoti & Company -- Analyst

Jon Robert Andersen -- William Blair & Company -- Analyst

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