Prestige Consumer Healthcare Earnings: Stable Demand and Leftover Pricing Impact Make Solid Results

Narrow-moat Prestige Consumer Healthcare reported solid second-quarter results that were in line with our expectations. Total sales were down 1% year over year, but results from second quarter last year benefited from pent-up demand from COVID-19 recovery and the firm exited certain private-label businesses during early 2023 (which accounted for about 100 basis points of total sales), so we expected difficult comparisons. That being said, demand for Prestige’s overall portfolio remains stable with eye and ear care and dermatological products as well as international markets showing good sales growth. We maintain our fair value estimate of $68 per share.