Prestige Brands Provides 3Q Outlook

Prestige Brand Holdings PBH provided financial guidance for its fiscal third quarter on Monday. Citing a tightening consumer environment, the firm now expects earnings per share to fall about $0.01-$0.02 from the comparable-year period, while revenue will be in line with the year-ago quarter. Although we don't view this announcement as a positive, we are maintaining our fair value estimate, as we believe our forecast already takes into account the challenges Prestige is facing. Additionally, we believe we have adequately captured the uncertainties in valuing Prestige's shares with both a higher-than-average discount rate and a higher-than-average margin of safety. We will update our analysis after the firm releases its quarterly results in a few weeks.