Prestige Consumer Healthcare Inc. (NYSE:PBH) Q3 2023 Earnings Call Transcript

Jon Andersen: Great, thanks. One follow-up. I think Ron, Ron is at the start of this year, you think he talked about the possibility of perhaps shipping a bit ahead of consumption in fiscal 2023, as there was still a need to establish a better in stock levels, maybe across certain categories coming out of the pandemic, it kind of feels like, you might be in that same situation right now, as you kind of looked at 2024. Is 2024 year where, net- net, you think it is possible that you might, there might be a little bit of a benefit from restocking given where you sit today? Thanks.

Ronald Lombardi: Yes, as we started 2023, we were focused on trying to recover and improve some of the our stocks and service levels. And we didn’t make the progress that we would have liked to, hence, the focus on continuing to build that inventory buffer. As we head into 2024, we think that will likely be the case, again, where there is more opportunities or inventory recoveries or builds at retail than it going the other way.

Jon Andersen: Thanks so much. Congrats for the quarter.

Ronald Lombardi: Sure, thanks Jon.

Operator: Thank you. And it looks like our next question will come from Mitchell Pinheiro of Sturdivant and Company. Your line is open.

Mitchell Pinheiro: Good morning. Just A couple of questions here. Did that common stocks affect you in any of your categories?

Ronald Lombardi: Yes, right. Cough/cold and certain SKUs in the Ear & Eye category are the big cause for us, as well as Gaviscon up in Canada as well.

Mitchell Pinheiro: Okay and then was it – I mean in terms of having an impact on your revenue, was it significant, was it just a couple percent or any way to put a number on that?

Christine Sacco: Yes, Mitch, this is Chris. I wouldn’t say it was material to the quarter in terms of sales. And what we are seeing largely is, you know, a SKU or brand goes out of stock. We refill it. It goes out of stock again, we refill it now it is another brand. So this concept that Ron mentioned about you know, us wanting to make sure we have enough inventory on hand to provide a more consistent level of supply for unanticipated disruptions in the supply chain speaks to exactly what we are experiencing, which is a bit of a game of Whack a Mole, if you will. But despite that, I guess I would still just highlight that we had strong sales for the quarter. So having the diversified portfolio has really enabled that and helped us this year.

Mitchell Pinheiro: Okay and then also on the revenue line, what price increases accounted for what percent of the growth?

Christine Sacco: So we are still, we had originally guided pricing to be about two-thirds of our growth for the year, and we are still on target might be slightly above that in terms of pricing for the year. So but that is the way to think about pricing for the period.

Mitchell Pinheiro: Okay and then, Ron, you had mentioned that that you anticipate lower levels of leverage overtime. And I don’t understand. Does that mean that acquisition growth slows a little bit or is there anything implied there with that?