Prestige Brands Holdings, Inc.
) shares were down 0.6% immediately after the company reported
fourth quarter fiscal 2014 earnings. However, shares gained 0.8% in
the following trading session.
The company's fourth quarter fiscal 2014 earnings of 35 cents
per share, were a penny above the Zacks Consensus Estimate but a
penny short of the year-ago earnings.
Fourth quarter revenues were $144.3 million, down 6.6% from the
year-ago quarter. The decrease was primarily due to the impact of
retailer inventory adjustments which was moderated in the quarter.
Revenues missed the Zacks Consensus Estimate of $147 million.
In fiscal 2014, Prestige Brands reported earnings of $1.53 per
share, beating the Zacks Consensus Estimate of $1.51 per share and
the year-ago earnings of $1.50 per share.
Revenues were $601.9 million in fiscal 2014, down 3.5% year over
year reflecting retailer dynamics, competitive brand returns and
the lower cough/cold incidence level. Revenues missed the Zacks
Consensus Estimate of $604 million.
The Quarter in Detail
In the reported quarter, the Over-the-Counter (OTC) Healthcare
segment generated revenues of $122.7 million, down 8.3% from the
year-ago quarter. This decline reflects lower cough/cold incidence
levels, entry of competitive products and changes in retailer
Revenues generated by the Household Cleaning segment were $21.5
million, up 3.9% year over year.
General and administrative (G&A) expenses increased 15.3%
year over year to $13.1 million.
Fiscal 2015 Guidance
Prestige Brands expects fiscal 2015 adjusted earnings per share
in the range of $1.75 to $1.85. The Zacks Consensus estimate of
$1.82 is within the company's guidance range. The company expects
revenues to grow in the range of 15%−18%.
This growth will reflect the recent Hydralyte acquisition, the
upcoming Insight acquisition and higher investment in its core
brands. Although revenues are expected to remain flat or decrease
3% year over year in the first half of fiscal 2015, due to strong
competition in the retail environment and tough year-over-year
comparisons, the company expects revenues to increase nearly 30% in
the second half of fiscal 2015, primarily due to the impact of the
upcoming Insight acquisition and organic growth.
Free cash flow generation is expected to be $150 million in
Prestige Brands carries a Zacks Rank #1 (Strong Buy). Some
stocks looking equally good in the health care sector include
Summer Infant, Inc.
). While Summer Infant carries a Zacks Rank #1, Vapor Corp. and
Nutrisystem hold a Zacks Rank #2 (Buy).
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