Prestige Brands Holdings, Inc.
) earnings (excluding special items) of 30 cents per share in the
third quarter of fiscal 2014 missed the Zacks Consensus Estimate
of 38 cents as well as the year-ago figure of 37 cents.
Revenues of $146.2 million were down 8.7% from a year ago and
missed the Zacks Consensus Estimate of $156 million.
Fiscal Third Quarter In Detail
Third quarter results were impacted by return of competing
brands in the market (that were recalled), a weak cough/cold
season and softness in the retail environment which led to retail
inventory reductions. Prestige Brands had earlier stated that
2014 will be a transitional year for the company due to the
return of competing brands.
Excluding an estimated impact of approximately $10 million of
retail inventory reductions concentrated in the mass channel,
sales in the third quarter would have decreased 2.5%. The
acquisition of Care Pharmaceuticals added $4.6 million to the top
We remind investors that Prestige Brands acquired
Australia-based Care Pharmaceuticals Pty Ltd. in Jul 2013.
Effective from Jul 1, 2013, this privately held marketer and
distributor of over-the-counter (OTC) healthcare products became
a part of Prestige Brands.
Gross margin increased by 60 basis points to 56% driven by
favourable over-the-counter mix and the impact of ongoing
Advertisement & Promotion costs increased by 8.6% to $25.6
million in the reported quarter.
On Jan 31, 2012, Prestige Brands acquired 15 OTC healthcare
brands, including related contracts, trademarks and inventory
) and its affiliates. The other two brands, namely, Debrox and
Gly-Oxide, were acquired on Mar 30, 2012.
Prestige Brands expects a continued reduction on foot traffic and
potential additional retailer inventory reductions. The company
expects earnings in fiscal 2014 to range between $1.48 and $1.52.
The Zacks Consensus Estimate currently stands at $1.67.
Prestige Brands carries a Zacks Rank #4 (Sell). Third quarter
results missed our expectations on all fronts. Shares were down
9.08% due to weak third quarter results. The weakness is
expected to extend in the fourth quarter as well and negatively
impact results going forward.
Stocks that currently look attractive include
Align Technology Inc.
). Both the stocks carry a Zacks Rank #2 (Buy).
ALIGN TECH INC (ALGN): Free Stock Analysis
CARDINAL HEALTH (CAH): Free Stock Analysis
GLAXOSMITHKLINE (GSK): Free Stock Analysis
PRESTIGE BRANDS (PBH): Free Stock Analysis
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