Prestige Brands Warns on 1Q

Prestige Brands Holdings PBH warned today that first-quarter revenues and earnings would likely be 7.0% lower than the year-ago period as a result of declining sales in its cryogenic segment, which includes wart-removal products, and the continued absence of pediatric cold and cough sales. The company maintained its 2%-4% revenue guidance for the year. While the news erased the gains the stock has made over the past several months, it has made little impact on our valuation so we're sticking with our fair value estimate for the firm's shares. We have made some adjustments to our model, however, and we have lowered our sales forecast for fiscal 2009 to be more in line with the lower end of the firm's target, versus the middle of the range where we were previously.