Prestige Consumer Health at 25th Annual Consumer Growth Conference: Strategic Insights

On Wednesday, 11 June 2025, Prestige Consumer Healthcare (NYSE:PBH) participated in the 25th Annual Consumer Growth and E-Commerce Conference hosted by Oppenheimer. The company highlighted its strategic focus on acquiring and growing niche brands, celebrating a record year in sales and earnings per share (EPS). While the company expressed confidence in its long-term growth strategy, it also addressed potential challenges such as tariff impacts and shifts in consumer spending habits.

Key Takeaways

• Prestige Consumer Healthcare reported a record year in sales and EPS for fiscal 2025.
• The company anticipates generating $1 billion in free cash flow over the next four years.
• Mergers and acquisitions (M&A) remain a top priority for capital allocation.
• Prestige expects a $15 million cost impact from tariffs in fiscal 2026.
• The gross margin is projected to improve to 56.5% in fiscal 2026.

Financial Results

• Revenue and EPS: Prestige achieved record sales and EPS for fiscal 2025, with a compound annual growth rate (CAGR) of over 2-3% in revenue and closer to 9% in EPS over the past five years.
• Free Cash Flow: The company projects approximately $1 billion in free cash flow over the next four years.
• Gross Margin: Guidance for fiscal 2026 indicates a gross margin of 56.5%, showing year-over-year improvement.
• Leverage: Currently at 2.4 times, with plans to operate below 3 times in the long term.
• Capital Allocation: Focuses on M&A, share repurchases, and net debt reduction.

Operational Updates

• Clear Eyes: Supply chain recovery is underway, with full resolution expected by the end of the fiscal year. Capacity expansion and new supplier additions are in progress.
• Women’s Health: Monistat stabilized in fiscal 2025, and Summer’s Eve experienced sales and share growth in late fiscal 2025.
• International Growth: Expected growth of 5-6% in fiscal 2026, driven by brands like Hydralyte, Fess, and Zadidin.
• E-commerce: Sales are growing at a rate of over 10%.
• Retailer Inventories: Temporary destocking occurred ahead of tariff talks.
• Innovation: The product pipeline and innovation efforts have accelerated.

Future Outlook

• Organic Sales Growth: Targeting 2-3% organic sales growth in the long term.
• EPS Growth: Aiming for 6-8% EPS growth over the longer term.
• M&A: Continues to be a priority, with opportunities in the fragmented consumer healthcare market.

Q&A Highlights

• Tariffs: Prestige is prepared to adjust pricing as needed to mitigate tariff impacts.
• Capital Allocation: The company is focused on M&A opportunities, with a target purchase price range of $200-500 million. Share repurchases will be considered opportunistically.

In conclusion, Prestige Consumer Healthcare remains optimistic about its growth strategy and financial performance. For more details, please refer to the full transcript below.

Full transcript - 25th Annual Consumer Growth and E-Commerce Conference:

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Good morning, everyone, and thank you for joining us at Oppenheimer’s twenty fifth Annual Consumer Growth and Ecommerce Conference. My name is Rupesh Parikh. I’m the senior food, grocery, and consumer products analyst here at Oppenheimer. I’m happy to introduce our next presenting company, Prestige Consumer Healthcare. Joining us today are CEO, Ron Lombardi and VP, IR, and Treasury, Phil Turpolili.

Prestige sells and distributes over the counter health care products to retail outlets in The US, Canada, and certain international markets. Some of the more well known brands include Dramamine, Clear Eyes, Dentech, Ludens, etcetera. So PVH has represented a bright spot in the CPG universe. Since early two thousand twenty, PVH shares are up around a 190% versus increases of just over a 160% in the S and P 500 and a 110% in the IWM ETF. So format today’s session will be fired inside chat, and then we’ll move to audience q and a.

So if you have questions, please enter them in a question panel below the video. So let’s get started. So, Ron, before I dive into my questions, as we do every year, maybe you can kick it off by providing a quick intro to Prestige and anything else you think is important to highlight regarding PBH and the company’s strategy.

Ron Lombardi, CEO, Prestige Consumer Healthcare: Sure. thanks, Rupesh, for hosting us today, and thanks to everyone who’s joined us for this morning’s discussion. So, let me start with a little bit, about Prestige’s strategy. You know, our strategy, and the way we think about creating value has largely remained unchanged, over a long period of time. I’ve been with the company since 02/2010, and our focus has been looking to build out a consumer health care portfolio with a specific focus on leading brands that define niche categories.

You know, to describe it simply, it’s where can we find places to win over the long term? So that’s really been the the basis of of the strategy. And over that period of time, we’ve been able to build out, a great portfolio of leading brands, with many of them defining the the categories that that they lead. And I’ll talk about that, in a minute here. But, our strategy has allowed us to, again, evolve to that consumer health care focused business.

We divested a household cleaning business. We divested smaller tailor brands over time and certainly have been very active in in m and a. And if you look across our portfolio, we’ve got great examples of of, these brands. BC and Goodies, for example. Right?

We sell nearly 800,000,000 doses a year of BC and Goodies as folks look to treat headache, hangovers, and other pain occasions. Fleet is another great example where we’ve we’re the number one position in helping people deal with very serious constipation instances. And Dramamine is another example where if you think about motion sickness and preventing motion sickness, you know, you talk about Dramamine as as that example. So great portfolio that we’ve been able to build out and invest behind to grow the brands and and the categories. And I think if you look at fiscal twenty four, excuse me, fiscal twenty five that just, ended here at the March, it’s another great example, of the financial performance that we can expect over time.

So despite being in a bit of a turbulent period of time with inflation, the beginnings of of discussions on tariffs and a change in presidents, our broad portfolio allowed us to perform well. It was another record year of sales in EPS for us that created great value. It also was another year in significant cash flow, performance that resulted in the lowest level of leverage in the company’s history. So we ended fiscal twenty five, in a great position both in terms of brand momentum, leverage, and as we look forward into what would be expected to be a disrupted ’26 with all that that’s going on these days. So as we sit here today, we feel good about our business, the long term positioning of our brands and ability to grow over the long term and the opportunity that a billion dollars worth of free cash flow will generate over the next four years.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Okay. Great. That’s that’s a great overview. So maybe to kick it off, we can start with the consumer. We’d love to get your thoughts on the overall consumer backdrop.

Are there any changes of no from your perspective?

Ron Lombardi, CEO, Prestige Consumer Healthcare: Yeah. You know, we’ve been talking about, potential changes in consumer shopping habits or, how they think about the economy for about a year now. And, you know, what we’ve talked about and what we’ve seen is that consumers have begun to think about shopping in different places. At this point, that’s really been the the concentrated change that we’ve seen. So consumers are being more thoughtful.

They’re looking for better value for the things that they buy. So we haven’t necessarily seen consumers in our categories. And, again, our categories are very different than the other aisles of brick and mortar or the other, you know, pageson.com. But, you know, they’re looking for better price value proposition, and that’s been the big change. They’re not looking to buy something different.

They wanna stick with those trusted consumer health care solutions as they think about taking care of themselves. So, and we expect that that fluidity and that that kind of change to continue in our fiscal, ’26. And then

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: from a channel perspective, are you seeing any shifts?

Ron Lombardi, CEO, Prestige Consumer Healthcare: Yeah. We’re yeah. Again, we’re we’re seeing consumers go to better, what they view as better price value proposition, whether that’s, mass or dollaror.com.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Okay. Great. And then shifting to the competitive backdrop, has anything notable changed on what you’re seeing in the competitive front lately?

Ron Lombardi, CEO, Prestige Consumer Healthcare: There there really hasn’t been. There’s been really hasn’t been any significant new entrants or changes in offerings at retail that changes the dynamic of the many categories that that we compete in. You know, this often, brings up the questions of about private label. So are we seeing changes in private label as consumers may get more nervous about the economic environment or the worry about what, tariffs might do to pricing? And, again, what we’ve seen over time is our spaces tend to be the last places that you look to save a little money.

Right? If you’re taking care of your health or somebody in your family’s health, you know, it’s the last place you look to save 50¢. You stick with what works over time.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Okay. Great. Now I’d like like to quickly touch on tariffs. Can you talk about your latest expectations on the tariff front given changes since your last report? And remind us of the levers you’re pulling to mitigate the impacts.

Ron Lombardi, CEO, Prestige Consumer Healthcare: Yeah. Let me let Phil start with, with this topic.

Phil Turpolili, VP, IR, and Treasury, Prestige Consumer Healthcare: Sure. So, Rupesh, obviously, tariffs topic of the day. As of May 8, that’s when we announced our earnings results. We talked about at the time expecting approximately $15,000,000 cost impact to fiscal twenty six, and that’s approximately $20,000,000 annualized. To your point, some tariff announcements obviously have shifted since then.

We’re monitoring it carefully. It continues to be very fluid for everyone, we’ll provide a full update in in August. But the the bigger picture, if you kinda step back from that, is we still view ourselves as very well positioned in this dynamic tariff environment, and there’s a few factors. the diversity of the portfolio. We’ve talked a lot about that, but having a wide array of products, we think, helps us.

Having a largely domestic supply base. So Chris talked about in the May earnings call having over over 80% of our, domestic sales coming from domestic CMO partners as an advantage. And then really, portfolio of having leading brands gives us the positioning to be able to take surgical pricing if it’s necessary. So if we step back and think about how we mitigate any future tariffs, we’re working closely with all of our suppliers to identify cost savings and close exposures that’ll result in savings to offset tariffs. And then where we can’t have it, we’ll take that surgical pricing that I mentioned.

So I think bottom line is we feel good about the ability to sort of navigate the environment as best we can.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Okay. Great. And then with the potential for tariff induced inflation, how should we think about pricing versus volume growth for this year?

Phil Turpolili, VP, IR, and Treasury, Prestige Consumer Healthcare: Yeah. It’s a good question. So, we anticipate some pricing element for the year regardless. So it’s a combination of you have a a wide range of brands and and various inflationary efforts, so there will be some pricing for the year regardless. And then that element really is variable dependent on the ultimate level of tariffs and where they shake out.

We do think there’ll be specific pockets where there may be pricing if, again, we can’t get that cost savings that we’re looking for.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Now I’d like to touch on a couple areas within your portfolio. Starting with Clear Eyes, remind us where you are at following last year’s supply chain challenges for the brand and how you think about the recovery from here.

Ron Lombardi, CEO, Prestige Consumer Healthcare: Sure. So we’ve we’ve talked about and have all along expected the Clear Eyes supply chain recovery to be a couple of years or so. You know, changes in, drug supply chain takes a long time. Changes in sterile eye care products, which is what ClearEye sells, takes an even longer period of time. So you have to be thoughtful around your plans, and make sure that you go through the right right changes.

So that’s the part of it. The other part that we had talked about is we kind of expect two elements of the supply recovery. The is to expand capacity at our existing suppliers, which is underway, as well as bring on two new suppliers, to help provide a longer term ability to expand capacity. So both of those elements are are well underway. We had also talked about the outlook for this year where we expected the recovery and expansion in supply to come online in the half of the year, and we expected the half of the year to continue to be fluid, as we make, the changes, as our partners make the changes, to to the supply chain.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: And then do you expect your inventory and retail position to be the right spot by the end of this fiscal year by the end of your fiscal year?

Ron Lombardi, CEO, Prestige Consumer Healthcare: Yeah. Still a a long ways, to go to till we get there to the March, but we expect to make significant progress in recovering, in stock at shelf, and then secondly, the retailers refilling their distribution centers. And then the last element will be filling our warehouses to provide good service levels. So, we’ll see we’ll see how that rolls out, but we’ll be focused on, and foremost, getting as much product at shelf as possible.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: And then moving on to women’s health. This has been an area of the portfolio that’s been challenged in recent years, but you began to see some recent stabilization at the end of last year. Can you share what this how your team is thinking about the women’s health category this year? And what’s your confidence in delivering sustainable growth going forward?

Ron Lombardi, CEO, Prestige Consumer Healthcare: Yeah. So two very different product offerings within women’s health, Monistat, and Summer’s Eve, and two very different paths to recovery that we have talked about over the last couple of years. So for Monistat, we were largely recovered early in fiscal twenty in in fiscal twenty five, as as we made some slight adjustments to our marketing, advertising, and product product distribution. So Monistat was largely, stabilized and thinking about long term growth. Summer’s Eve was a longer, project for us.

Right? Over the course of four plus years, we did a lot of work to try to reposition the brand, and quite frankly, it didn’t work. Right? Not everything you you do in marketing works, and this is an example of one that didn’t. So, we had worked on repositioning, getting back to the heritage of connecting with women around, feminine hygiene incidents and providing them with products that they can trust to help them with, odor control and confidence.

So in fiscal twenty five, we began to see the results of the changes that we had been making. The last February of fiscal twenty five saw recovery in sales, so year over year growth in sales for the time in about three years as well as, growing share. So we real felt, and continue to feel really good about the momentum that Summer’s Eve brought into fiscal twenty five. We’ve got a number of other new product launches, a whole body deodorant that that’s positioned in the feminine hygiene aisle, not the deodorant aisle, positioned consistently with the summer’s eve offering in terms of price point and expectations around, how it will perform. So as we get into ’26, we continue to feel good about our women’s health portfolio.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Great. And then shifting gears to international, a real bright spot in your portfolio in recent years. So you’ve indicated longer term top line growth expectations in the mid single digits for your international segment. Can you talk about some of the drivers behind that growth and your confidence in delivering on that target?

Ron Lombardi, CEO, Prestige Consumer Healthcare: Sure. You know, the the wonderful performance that we’ve had in our international business really has more to do with our strategy than where it happens to be located. Right? The concentration is in Australia and close in regions. And, you know, Hydralyte and Fess and Zadidin are three brands that have performed very well there.

You know, and why. And and it all starts with brands that define the the spaces that they compete in, whether it’s, clinical, hydration. Right? I’m ill, and I need to rehydrate. Or nasal, saline solutions for cough, cold, allergy, relief, and Zadidin for allergy eye relief.

They all define those spaces. We’ve brought new products, new forms, expanded distribution, both within Australia and in adjacent, regions, particularly for for Hydralyte and have a wonderful marketing group who who have been great stewards for those brands and others, and and a great, general manager for that region, that have driven the success there in those in those places. So, we can expect that that brand playbook will continue to play out over time, and our longer term outlook and the outlook for ’26 is for growth around five, 6%, for that part of the business.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Okay. Great. And then shifting just to ecommerce, what are your latest priorities here? And are there key efforts we should be thinking about?

Ron Lombardi, CEO, Prestige Consumer Healthcare: Yeah. So ecommerce is is more more of the same for us. Right? It’s been growing, you know, north of 10% for for a long time. We had I think we were over 20% for a couple of couple of years there.

So we we continue to grow nicely as shoppers, continue to show up in increasingly larger numbers every year, to the .coms. You know, not only Amazon, but our .com arms of our brick and mortar partners. And we work with all of them, to be successful and grow their businesses. So we make investments, with all of them to help support the shoppers that are showing up there. You know, I think one thing that we haven’t talked a lot about, in the past is the continuing expanded investment in those places really more as a marketing element as opposed to supporting a retail sales channel.

So what do I mean by that? You know years ago, a new shopper, a new user to a category, you know, might begin to get introduced to a brand maybe on TV, and then maybe it turned to linear TV. Or they went to a drug, or some other retail partner that had a a pharmacy and may have asked the pharmacist for some help, or they just went up and down the aisle looking for a broad assortment and and turning packs. What we’ve seen happen is that new to a category is showing up at .com and getting educated by reviews, making purchase decisions based on the information that they’re seeing on this .com arm.

So our marketers are beginning to, work with how to best use that aspect to connect to new to the category shoppers. You know? And that’s a an example of, how the .com element is expanding as a marketing tool. And that’s how we’re thinking about it. Right?

Lots of p’s, you know, from the six p portfolio of connecting with them there.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Okay. Great. And there’s been some talk from others of retail inventory destocking during the quarter here in The US. How do you characterize a healthier retailer inventories in the in The US market?

Ron Lombardi, CEO, Prestige Consumer Healthcare: Yeah. You know, so we saw some, retailer was concentrated really with one buys ahead of or triggered by tariff talk, for our quarter ended March. And we had talked about how we expected it to come out of the You know, at the May, we had our you know, we’re able to see six weeks, right, half of the first quarter worth of activity. So, you know, it was based on six weeks of fact, at that point. So, we saw it largely concentrated in one.

You know, we’re we’re hearing the same things out of consumer companies that you are. But, you know, as a reminder, you know, our part of the shelf within the health care aisles of retaileror.com, versus the other shelf within OTC or health care, or the other aisles are very different. Right? I like to use as an example. Think about how many linear feet you see for tableted analgesic or, cough, cold allergy.

Right? The retailers may manage that part of the shelf very differently than our much narrower powdered analgesic or our dramamine or our flea part of the shelf. So, we live in a in, by strategy, a different world that may have us see different kinds of of impact. So, you know, that’s why you may hear us talk differently about private label trends, about, retailer order, or inventory trends during a particular time. Doesn’t mean that they’re, you know, that they’re not happening.

It means that they’re happening differently for us, based on our our business model.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Okay. And then pharmacy store closures, I think you guys have managed quite well through them in recent years, I think. Is that the same expectation going forward based on what you know?

Ron Lombardi, CEO, Prestige Consumer Healthcare: Yeah. You know, in a lot of ways, it’s in the base. Right? The the two big players have been optimizing and closing short, stores for a long time now. So, you know, an an announcement of x hundreds of stores to be closed by the by a particular drug retailer.

It’s just more of the same. And then, for the changes at Rite Aid, they haven’t been a a big customer for us for a long period of time given their financial situation, the closing of stores. So, you know, whatever, has been going on there is in in the base and has been, reflected in the outlook that we gave for for ’26.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: And then on the innovation front, how do you feel about the innovation pipeline for this year and the coming years? Is there anything that you highlight or any examples of recent successes on the innovation front?

Ron Lombardi, CEO, Prestige Consumer Healthcare: Yeah. You know, so of all, over the last three years or so, you know, every year, our new product pipeline and innovation, has accelerated because of the disruption we saw from 2020 through twenty twenty two ish or so. So like a lot of consumer health, consumer companies, we’ve been gaining momentum as we’ve made progress to to figure out what to to bring to market and launch it in line with retailer shelf replacement. So we continue to to feel good about it. In recent years, you know, the Dramamine Nausea product offering has has performed well.

CompoundW has had a number of products that have performed well. For example, the Summer’s Eve whole body deodorant, launch, we feel good about as a continued extension of, what we’re looking to do with Summer’s Eve over the long term. And, you know, Hydralyte has had some great new flavors come out, across their tablets powdered and ready to drink formulas, over the over the last few years. So continue to feel good. And it’s an important element of how we think about growing the categories that we’re stewards of.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Okay. Great. So now shifting to a few financial questions. What gives your team confidence in your longer term two percent to 3% organic sales growth target and being able to deliver 68% EPS growth?

Ron Lombardi, CEO, Prestige Consumer Healthcare: Yep. Phil?

Phil Turpolili, VP, IR, and Treasury, Prestige Consumer Healthcare: Yeah. So when you step back and look at the longer term, Rupesh, and we actually have this in the deck this morning that we posted with the conference. If you look at the last five years, we’re growing our CAGRs, in excess of that on the revenue and EPS slightly above it at a little bit closer to 9%. So, very much aligned with that longer term, organic algorithm that you referenced. And

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: if

Phil Turpolili, VP, IR, and Treasury, Prestige Consumer Healthcare: you kinda unpack those top line and then earnings, you know, we really have excellent components for each one. So with top line, we talked about the international segment earlier. Still expect that to grow 5% plus over the long term, really due to a number of factors that that Ron got into. And then when you look at the North American business, we have a a very diverse portfolio of stable and leading needs based brands. So in aggregate, we think of that portfolio as tied to population growth with categories, but we do better than those overall categories and and grow them over time through really the combination of brand building that we often talk about.

So we just talked about innovation. We think of marketing, line extensions, and other, investments behind our brands that that drive that two to 3% in aggregate for the the top line. And then on on the earnings side, we’ve had a long history of sort of stable, stable profit profile over the long term. You can see in our our financials, we’ve had this long term largely stable EBITDA margin in the low to mid thirties, and we’d expect that to to be maintained over time. We really get the leverage and the ability to generate the 60% EPS growth, thanks to the strong free cash flow that that EBITDA throws off, and obviously gives us the ability for efficient capital allocation that can drive that earnings growth.

So we can unpack those if you want. Those are kind of the building blocks to getting to the to the algorithm.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Okay. No. It’s great. Just just on gross margins, since that comes up a lot in our conversations, I think it’d be helpful if you can maybe walk through some of the key puts and takes on the gross margin line for this year. And as you guys look forward, what are still the big opportunities going forward to get back to historical gross margin levels?

Phil Turpolili, VP, IR, and Treasury, Prestige Consumer Healthcare: Sure. So, I think we have a a guidance out there for approximately 56 and a half percent for fiscal twenty six. That’s the year in a row now of improvement on a year over year basis, so we continue to kinda creep that gross margin back towards historical levels, and we think that’s a long term initiative that, we have for the the line. You you you comment kinda mentioned unpack it, give us some building blocks. I think the largest effect is really almost a 1% benefit associated with cost savings that Chris talked about last year.

Really started to come in fact into effect in the q four period, and that’ll wrap around into fiscal twenty six. So that’s a big component of it. From there, we do obviously have some additional inflation. We talked about tariffs earlier, but the objective is to largely offset those inflation effects through a combination of cost savings and pricing. So no different to the longer term.

Now remember over the long term, we have those rolling cost savings efforts that we talk about and good visibility into the long term ability to execute behind that. So our team has three year initiatives literally by month that we go through to make sure that we’re, having line of sight into capturing those over time to, drive that gross margin expansion. And and just as a reminder, to tie it back to EBITDA, right, we we look to reinvest that higher level of of gross margin if we get expansion through higher levels of levels of a and m that can drive faster top line. So that’s kind of the formula that we think about with gross margin.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Okay. Great. And then shifting gears just to capital allocation. Is it if you can remind us of your priorities on the capital allocation front, and what do you believe is the right level of leverage for the business longer term?

Phil Turpolili, VP, IR, and Treasury, Prestige Consumer Healthcare: Sure. So one of the big messages we always talk about is we’d expect to generate approximately a billion dollars in free cash flow for the next four years. If you look at that in the context of our business, that’s very substantial. Right? So getting efficient capital allocation correct is really critical for our business.

The and foremost, that’s after marketing investments. Right? So number one is always we gotta grow the business we have and invest organically, and we’re doing that. Then when we think of the capital allocation priorities from there, the waterfall is really unchanged to what we talked about over the last year or so. M and A continues to remain the priority.

We think on a global basis, there continues to be fragmentation opportunity in consumer health care, and we have the ability to go out and do additional acquisitions and and strengthen our portfolio and brands over time. So, the m and a is there, and and we continue to see a consistent cadence of opportunities. So it’s kind of priority one. Priority two at this point would be share repurchases. So, we always divide that into two.

The aspect is offsetting dilution each year. We generally do that during q one. And then further and beyond that, absent m and a, we’d look to repurchase shares opportunistically throughout the year. And you saw that back in fiscal twenty five. We repurchased a little over $50,000,000 in, shares in our against our authorization.

And then the final piece of it is just net debt reduction. So we’ve worked down our debt quite a bit over the last three, five years here. We’re to the point now where we have two fixed notes outstanding and no further prepayable debt, and we’re at, approximately 2.4 times leverage. We built a little bit of cash on the balance sheet the end of last year. And as you look ahead to fiscal twenty six, absent m and a, you could see us continue to creep that cash a little bit higher and then possibly get a little bit more aggressive on share repurchases if it makes sense.

So we’ll kind of balance those two. But generally speaking, we’ll we’d look at cash build rather than debt reduction just given the fixed notes. Both of them are at very attractive prices at five and an and and three and three quarters pricing.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Okay. Great. Then just circling back to m and a. So it sounds like you guys are still seeing consistent opportunities, but, you know, just you know, what are seeing from a valuation perspective? Anything different than the past?

And so, overall, how you feel about the pipeline out there?

Ron Lombardi, CEO, Prestige Consumer Healthcare: Yep. Yep.

Phil Turpolili, VP, IR, and Treasury, Prestige Consumer Healthcare: And to to your question before, Rupesh, about just kind of leverage and long term thinking, and this ties to M and A too. We have a long term, objective out there to operate at less than three times leverage. So, when you think about us at 2.4 times today, that’s not a constraining factor to m and a in any way, shape, or form. So I just wanna make that clarifying point. In terms of m and a overall, still see a a standard cadence of opportunities.

It’s about finding the right one. We often say that a bad deal would be worse than no deal. So, certainly, we wanna be strategic in our thinking and not, sort of financial engineering and just doing deals to do deals. We continue to see a landscape of activity in private equity, obviously, always buying and selling. Families over time looking to monetize their businesses.

We actually saw that in Australia. We bought, a key supplier for Hydralyte there a little over a year ago because they were critical to our supply chain for that business, and that family was looking to, to monetize. And then the last piece that we get asked about a lot is just some of the bigger pharmaceutical and consumer product companies. They often have tail brands or businesses that aren’t, a core focus for them, And we always look at those in due diligence and understanding what could be a potential fit for our business. A large number of our brands have actually come out of those businesses over time.

The textbook example we always use is is Tremamine. We re we purchased that from Johnson and Johnson over a decade ago now, and it’s been highly successful. An example we use of long term brand building, that was a noncore brand for, that business and just a function of the size of it, but for us was a great opportunity. So those sorts of things we’ll continue to look at. The last thing that we get on the m and a front is just sizing.

Certainly, we’ll look at things small to large and everything in between. We think of the sweet spot, though, is still kind of that two to five hundred million purchase price, so we’d love to if we wave the magic wand, do that size of a deal where it’s, sizable and accretive to the business, but not necessarily derailing the the deleveraging efforts that we’ve had. So that’s kind of the the m and a landscape. Roman, anything to add?

Ron Lombardi, CEO, Prestige Consumer Healthcare: Yeah. In a in a lot of ways, Rupesh, the m and a environment for us hasn’t changed in the fifteen years or so that that I’ve been here, which is, you know, there’s all kinds of different sellers, and we see a steady flow of all kinds of things. The vast majority of them don’t really line up with our our criteria of looking for brands that can be well positioned for long term growth. The thing that has changed in the last couple of years is that there’s been a lot of attention to the space as the these big consumer franchises have been carved out of the big big pharma, as big PE has talked a lot a lot about made investments into this into this space, but it doesn’t create a different competitive environment for us. You know, the brand that we’re interested in, tend to be smaller than what the big players would be interested in, and we’re very competitive with our ability to take brands and bolt them into our existing infrastructure and have an approach to invest in them and hold them for, the long term rather than having to create a thesis of how do you get in and how do you get out of the the, investment and make money.

So for for all of those factors, it’s more of the same, and we continue to feel good about the long term opportunity to find things that’ll make sense for us.

Rupesh Parikh, Senior food, grocery, and consumer products analyst, Oppenheimer: Okay. Great. So we’re getting close to time. So thanks thanks, Ron and Dylan, joining us today. Great.

Phil Turpolili, VP, IR, and Treasury, Prestige Consumer Healthcare: Thank you, Rupesh.

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