Operator: Good day, and thank you for standing by. Welcome to the Q3 2026 Prestige Consumer Healthcare Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Philip Terpolilli, Vice President of Investor Relations and Treasury. Please go ahead.
Operator: Good day, and thank you for standing by. Welcome to the Q3 2026 Prestige Consumer Healthcare Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Philip Terpolilli, Vice President of Investor Relations and Treasury. Please go ahead.
Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone.
Speaker #1: message. Advising your hand is You will then hear an automated raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.
Speaker #1: I would now like to hand the conference over to your speaker today, Philip Terpolilli. Vice President of Investor Relations and Treasury. Please go ahead.
Philip Terpolilli: Thanks, operator, and thank you to everyone who has joined today. On the call with me are Ron Lombardi, our Chairman, President, and CEO, and Chris Sacco, our CFO and COO. On today's call, we'll review our third quarter fiscal 2026 results, discuss our full year outlook, and then take questions from analysts. The slide presentation that accompanies today's call can be accessed by visiting prestigeconsumerhealthcare.com, clicking on the Investors link, and then on today's webcast and presentation. Remember, some of the information contained in the presentation today includes non-GAAP financial measures. Reconciliations to the nearest GAAP financial measures are included in our earnings release and slide presentation. On today's call, management will make forward-looking statements around risks and uncertainties, which are detailed in a complete safe harbor on page 2 of the slide presentation that accompanies the call. These are important to review and contemplate...
Philip Terpolilli: Thanks, operator, and thank you to everyone who has joined today. On the call with me are Ron Lombardi, our Chairman, President, and CEO, and Chris Sacco, our CFO and COO. On today's call, we'll review our third quarter fiscal 2026 results, discuss our full year outlook, and then take questions from analysts. The slide presentation that accompanies today's call can be accessed by visiting prestigeconsumerhealthcare.com, clicking on the Investors link, and then on today's webcast and presentation. Remember, some of the information contained in the presentation today includes non-GAAP financial measures. Reconciliations to the nearest GAAP financial measures are included in our earnings release and slide presentation. On today's call, management will make forward-looking statements around risks and uncertainties, which are detailed in a complete safe harbor on page 2 of the slide presentation that accompanies the call. These are important to review and contemplate...
Speaker #2: Operator. And thank you to everyone who has joined today. On the call with me are Ron Lombardi, our Chairman, President, and CEO, and Chris Sacco, our CFO and COO.
Speaker #2: On today's call, we'll review our third quarter fiscal 2026 results, discuss our full-year outlook, and then take questions from analysts. The slide presentation accompanying today's call can be accessed by visiting prestigeconsumerhealthcare.com, clicking on the Investors link, and then on today's webcast and presentation.
Speaker #2: Remember, some of the information contained in the presentation today includes non-GAAP financial measures. Reconciliations to the nearest GAAP financial measures are included in our earnings release, in slide presentation.
Speaker #2: On today's call, management will make forward-looking statements around risks and uncertainties, which are detailed in a complete safe harbor on page two of the slide presentation that accompanies the call.
Speaker #2: These are important to review and contemplate. Business environment uncertainty remains heightened due to supply chain constraints, high inflation, and geopolitical events, which have numerous potential impacts.
Philip Terpolilli: Business environment uncertainty remains heightened due to supply chain constraints, high inflation, and geopolitical events, which have numerous potential impacts. This means results could change at any time, and the forecasted impact of risk considerations is a best estimate based on the information available as of today's date. Additional information concerning risk factors and cautionary statements are available in our most recent SEC filings and the most recent company's 10-K. And I'll hand it over to our CEO, Ron Lombardi. Ron?
Philip Terpolilli: Business environment uncertainty remains heightened due to supply chain constraints, high inflation, and geopolitical events, which have numerous potential impacts. This means results could change at any time, and the forecasted impact of risk considerations is a best estimate based on the information available as of today's date. Additional information concerning risk factors and cautionary statements are available in our most recent SEC filings and the most recent company's 10-K. And I'll hand it over to our CEO, Ron Lombardi. Ron?
Speaker #2: This means results could change at any time, and the forecasted impact of risk considerations is the best estimate based on the information available as of today's date.
Speaker #2: Additional information concerning risk factors and cautionary statements are available in our most recent SEC filings, and the most recent company 10-K. And I'll hand it over to our CEO, Ron Lombardi.
Speaker #2: Ron?
Speaker #3: Thanks, Phil. Let's begin on slide five. We delivered solid results for the third quarter, which reflected the benefits of our diverse business model and strong financial profile.
Ronald Lombardi: Thanks, Phil. Let's begin on slide five. We delivered solid results for the third quarter, which reflected the benefits of our diverse business model and strong financial profile. We are pleased with these results, especially when navigating the challenging consumer backdrop we've seen year-to-date, which includes consumers continuing to change where they shop in a fluid environment with tariffs, inflation, a government shutdown, public announcements related to acetaminophen, and more. All of this led to a dynamic environment in Q3, which we successfully managed through. Sales of $283 million were slightly better than forecast. Our diverse customer base allowed us to see solid order trends in our growing channels, which more than offset the impact of other channels that are more affected by the macro issues I just mentioned.
Ronald Lombardi: Thanks, Phil. Let's begin on slide five. We delivered solid results for the third quarter, which reflected the benefits of our diverse business model and strong financial profile. We are pleased with these results, especially when navigating the challenging consumer backdrop we've seen year-to-date, which includes consumers continuing to change where they shop in a fluid environment with tariffs, inflation, a government shutdown, public announcements related to acetaminophen, and more. All of this led to a dynamic environment in Q3, which we successfully managed through. Sales of $283 million were slightly better than forecast. Our diverse customer base allowed us to see solid order trends in our growing channels, which more than offset the impact of other channels that are more affected by the macro issues I just mentioned.
Speaker #3: results, especially when navigating the challenging consumer backdrop we've We are pleased with these seen year to date, which includes consumers continuing to change where they shop in a fluid environment with tariffs and inflation, a government shutdown, public announcements related to acetaminophen, and more.
Speaker #3: All of this led to a dynamic environment in Q3, which we successfully managed through. Sales of 283 million were slightly better than forecast, our diverse customer base allowed us to see solid order trends in our growing channels, which more than offset the impact of other channels that are more affected by the macro issues I just mentioned.
Speaker #3: Our broad distribution allows us to benefit from habits no matter where they look to buy our brands. Another positive is that we continue to see sequential improvement in clear-eyed supply for the second quarter in a trusted and leading row.
Ronald Lombardi: Our broad distribution allows us to benefit from changes in consumer shopping habits, no matter where they look to buy our trusted and leading brands. Another positive is that we continue to see sequential improvement in Clear Eyes supply for the second quarter in a row. We anticipate further improvements based on actions we've taken that I'll discuss shortly. Moving down the P&L, both gross margin of 55.5% and adjusted EPS of $1.14 were in line with our expectations provided on our second quarter call. Free cash flow was $209 million year to date, up 13% versus the prior year. This impressive cash flow allowed us to repurchase approximately $46 million in stock and acquire our strategic partner, Pillar5, during the quarter, while still maintaining leverage in the mid-2s.
Ronald Lombardi: Our broad distribution allows us to benefit from changes in consumer shopping habits, no matter where they look to buy our trusted and leading brands. Another positive is that we continue to see sequential improvement in Clear Eyes supply for the second quarter in a row. We anticipate further improvements based on actions we've taken that I'll discuss shortly. Moving down the P&L, both gross margin of 55.5% and adjusted EPS of $1.14 were in line with our expectations provided on our second quarter call. Free cash flow was $209 million year to date, up 13% versus the prior year. This impressive cash flow allowed us to repurchase approximately $46 million in stock and acquire our strategic partner, Pillar5, during the quarter, while still maintaining leverage in the mid-2s.
Speaker #3: We anticipate further improvements based on actions we've taken that I'll discuss shortly. Moving down the P&L, both gross margin of 55.5% and adjusted EPS of $1.14 were in line with our expectations provided on our second quarter call.
Speaker #3: Free cash flow was $209 million year to date, up 13% versus the prior year. This impressive cash flow allowed us to repurchase approximately $46 million in partner, Pillar 5, during the quarter, while still maintaining leverage in the mid-twos.
Speaker #3: Our disciplined capital allocation strategy continues to enhance shareholder value. Chris is going to discuss this and specifically our year-to-date share repurchases after reviewing the financials.
Ronald Lombardi: Our disciplined capital allocation strategy continues to enhance shareholder value. Chris is going to discuss this and specifically our year-to-date share repurchases after reviewing the financials. So despite a fast-changing consumer backdrop, we have confidence in our core business, which remains well-positioned, and we continue to expect free cash flow growth for the fiscal year. Now, let's turn to slide 6 for an update on eye care supply. We continue to see long-term growth opportunity in the eye care category, driven by an aging population and other factors. While we have faced challenges in supply for our Clear Eyes brand for the last several quarters, we are confident that we've taken the appropriate strategic actions, shown on the left side of the page, to return Clear Eyes to its leading market share position.
Ronald Lombardi: Our disciplined capital allocation strategy continues to enhance shareholder value. Chris is going to discuss this and specifically our year-to-date share repurchases after reviewing the financials. So despite a fast-changing consumer backdrop, we have confidence in our core business, which remains well-positioned, and we continue to expect free cash flow growth for the fiscal year. Now, let's turn to slide 6 for an update on eye care supply. We continue to see long-term growth opportunity in the eye care category, driven by an aging population and other factors. While we have faced challenges in supply for our Clear Eyes brand for the last several quarters, we are confident that we've taken the appropriate strategic actions, shown on the left side of the page, to return Clear Eyes to its leading market share position.
Speaker #3: So despite a fast-changing consumer backdrop, we business, which remains well-positioned and we continue to expect free cash flow growth for the fiscal year. Now, let's turn to slide six for an update on iCare Supply.
Speaker #3: We continue to see long-term growth opportunity in the iCare category, driven by an aging population and other factors. While we have faced challenges in supply for our Clear Eyes brand for the last several quarters, we are confident that we've taken the appropriate strategic actions shown on the left side of the page.
Speaker #3: To return clear-eyed to its position. leading market share To start, over the last nine months, we've brought on two new third-party suppliers to help ensure near-term production as well as long-term backup supply.
Ronald Lombardi: To start, over the last nine months, we've brought on two new third-party suppliers to help ensure near-term production as well as long-term backup supply. Second, we closed on the Pillar5 acquisition in December, which unlocks the opportunity to take direct control over an important element of our supply chain. Third, with the installation of a new high-speed line that began in December, we believe Pillar5 has the capability to support the majority of our eye care production internally over time. With the combination of ownership and the high-speed line, this gives the facility the ability to have unconflicted focus on producing high volume, quality product on time for Clear Eyes, the historically number one eye drop brand at retail. With these strategic underpinnings, we believe this year is set up to allow us to shift towards a focus on accelerating total production.
Ronald Lombardi: To start, over the last nine months, we've brought on two new third-party suppliers to help ensure near-term production as well as long-term backup supply. Second, we closed on the Pillar5 acquisition in December, which unlocks the opportunity to take direct control over an important element of our supply chain. Third, with the installation of a new high-speed line that began in December, we believe Pillar5 has the capability to support the majority of our eye care production internally over time. With the combination of ownership and the high-speed line, this gives the facility the ability to have unconflicted focus on producing high volume, quality product on time for Clear Eyes, the historically number one eye drop brand at retail. With these strategic underpinnings, we believe this year is set up to allow us to shift towards a focus on accelerating total production.
Speaker #3: Second, we closed on the Pillar 5 acquisition in December, which unlocks the opportunity to take direct control over an important element of our supply chain.
Speaker #3: Third, with the installation of a new high-speed line that began in December, we believe Pillar 5 has the capability to support the majority of our iCare production internally over time.
Speaker #3: With the combination of ownership and the high-speed line, this gives the facility the ability to have unconflicted focus on producing high-volume, quality product on time for clear-eyed that historically number one eyedrop brand at retail.
Speaker #3: With these strategic underpinnings, we believe this year is set up to allow us to shift towards a focus on accelerating total production. These priorities to achieve this are on the right side of the page.
Ronald Lombardi: These priorities to achieve this are on the right side of the page. We expect to continue sequentially increasing supply through calendar 2026 as we increase efficiency levels and production to higher, sustainable levels. During this period, we also expect one-time investment as we transition Pillar5 from their private ownership. As production and resulting supply improves, this will allow us to further diversify our production runs into an expanded assortment of SKUs versus today, where the focus is on our top two selling items, Redness Relief and Max Redness. These higher production levels will allow us to refill both retailer safety stocks and our own. Lastly, the consistency and volume of production will enable marketing efforts that should help further accelerate demand growth. So in summary, we feel good about the action we-- actions and steps we've taken to improve our eye care production positioning.
Ronald Lombardi: These priorities to achieve this are on the right side of the page. We expect to continue sequentially increasing supply through calendar 2026 as we increase efficiency levels and production to higher, sustainable levels. During this period, we also expect one-time investment as we transition Pillar5 from their private ownership. As production and resulting supply improves, this will allow us to further diversify our production runs into an expanded assortment of SKUs versus today, where the focus is on our top two selling items, Redness Relief and Max Redness. These higher production levels will allow us to refill both retailer safety stocks and our own. Lastly, the consistency and volume of production will enable marketing efforts that should help further accelerate demand growth. So in summary, we feel good about the action we-- actions and steps we've taken to improve our eye care production positioning.
Speaker #3: We expect to increase supply through calendar 2026 as we raise efficiency levels and production to higher, sustainable levels. During this period, we also expect one-time investments as we transition Pillar 5 from their private ownership.
Speaker #3: As production and resulting supply improves, this will allow us to further diversify our production runs into an expanded assortment of SKUs, versus today where the focus is on our top two selling items.
Speaker #3: Redness relief and max redness. These higher production levels will allow us to refill both retailer safety stocks and our own. Lastly, the consistency and volume of production will enable marketing efforts that should help further accelerate demand growth.
Speaker #3: So, in summary, we feel good about the actions taken to improve our iCare production positioning. We believe we are positioned to continue to improve supply sequentially again in Q4 and moving forward.
Ronald Lombardi: We believe we are positioned to continue to improve supply sequentially again in Q4 and moving forward. With that, I'll turn it over to Chris to discuss the financials.
Ronald Lombardi: We believe we are positioned to continue to improve supply sequentially again in Q4 and moving forward. With that, I'll turn it over to Chris to discuss the financials.
Speaker #3: With that, I'll turn it over to Chris to discuss the financials.
Christine Sacco: Thanks, Ron. Good morning, everyone. Let's turn to slide 8 and review Q3 and year-to-date financial results in more detail. Q3 revenue of $283.4 million declined 2.4% from $290.3 million in the prior year, or 2.2% excluding FX. The revenue decline was mainly attributable to lower eye and ear care category sales, owing largely to Clear Eyes supply constraints. As Ron mentioned, we also benefited from our broad distribution, which drove sales growth in some of our largest channels. This helped offset continued consumer volatility and softness in certain categories like analgesics and cough and cold. Adjusted EBITDA margin remained in the low thirties. Adjusted diluted EPS of $1.14 was down slightly versus $1.22 in the prior year, which reflected the lower sales, timing of A&M spend, and higher G&A costs.
Christine Sacco: Thanks, Ron. Good morning, everyone. Let's turn to slide 8 and review Q3 and year-to-date financial results in more detail. Q3 revenue of $283.4 million declined 2.4% from $290.3 million in the prior year, or 2.2% excluding FX. The revenue decline was mainly attributable to lower eye and ear care category sales, owing largely to Clear Eyes supply constraints. As Ron mentioned, we also benefited from our broad distribution, which drove sales growth in some of our largest channels. This helped offset continued consumer volatility and softness in certain categories like analgesics and cough and cold. Adjusted EBITDA margin remained in the low thirties. Adjusted diluted EPS of $1.14 was down slightly versus $1.22 in the prior year, which reflected the lower sales, timing of A&M spend, and higher G&A costs.
Speaker #1: Everyone, let's turn to slide eight and review Q3 and year-to-date financial results in more detail. Thanks, Ron. Good morning. Q3 revenue of $283.4 million declined 2.4% from $290.3 million in the prior year, or 2.2% excluding FX.
Speaker #1: The revenue decline was mainly attributable to lower eye and ear care category sales owing largely to clear-eyed supply constraints. As Ron mentioned, we also benefited from our broad distribution, which drove sales growth in some of our largest channels.
Speaker #1: This helped offset softness in certain categories like analgesics and cough and cold. Adjusted EBITDA margin remained in the low 30s. Adjusted diluted EPS of $1.14 was down slightly versus $1.22 in the prior year, which reflected the lower sales, timing of A&M spend, and higher G&A costs.
Speaker #1: Last, please note these results exclude an approximate $10 million write-off of a supplier loan. Although not often, from time to time we extend secured financial liquidity to our third-party suppliers to ensure continuity of supply.
Christine Sacco: Last, please note, these results exclude an approximate $10 million write-off of a supplier loan. Although not often, from time to time, we extend secured financial liquidity to our third-party suppliers to ensure continuity of supply. In this case, we decided to make a loan to a partner in fiscal 2024 as they explored a sale of their business and we transferred our products to other suppliers. That work has been completed without any meaningful disruption in supply, but the business shut down at the end of December. Our loan is secured by the assets of the company, and while we expect some recovery, we cannot estimate the outcome, and as a result, we have written the full balance off at this time. Now, let's turn to slide 9 for a discussion around consolidated results for the first 9 months.
Christine Sacco: Last, please note, these results exclude an approximate $10 million write-off of a supplier loan. Although not often, from time to time, we extend secured financial liquidity to our third-party suppliers to ensure continuity of supply. In this case, we decided to make a loan to a partner in fiscal 2024 as they explored a sale of their business and we transferred our products to other suppliers. That work has been completed without any meaningful disruption in supply, but the business shut down at the end of December. Our loan is secured by the assets of the company, and while we expect some recovery, we cannot estimate the outcome, and as a result, we have written the full balance off at this time. Now, let's turn to slide 9 for a discussion around consolidated results for the first 9 months.
Speaker #1: In this case, we decided to make a loan to a partner in fiscal '24 as they explored a sale of their business suppliers. That work has been and we transferred our products to other completed without any meaningful disruption in supply, but the business shut down at the loan is secured by the assets of the end of December.
Speaker #1: recovery, we cannot estimate the Our outcome, and as a result, we have written the full balance off at this time. Now it's turned to slide nine for a discussion around consolidated results for the first nine months.
Christine Sacco: For the first nine months of fiscal 2026, revenues decreased 3.9% organically versus the prior year. By segment, excluding FX, North America segment revenues decreased 4.4%, and international segment revenues decreased 90 basis points versus the prior year. The first nine months sales declines were largely due to the anticipated impact of the Clear Eyes supply chain constraints. As Ron highlighted earlier, thanks to our channel diversity, we continue to benefit from strong growth in channels like e-commerce, which have offset negative trends in most other channels. Also impacting year-to-date sales was category softness in the analgesic and cough and cold categories. Ron will note the implications of this when reviewing our outlook for the remainder of the year. Elsewhere, our international OTC segment business declined slightly year-to-date for two primary factors.
Christine Sacco: For the first nine months of fiscal 2026, revenues decreased 3.9% organically versus the prior year. By segment, excluding FX, North America segment revenues decreased 4.4%, and international segment revenues decreased 90 basis points versus the prior year. The first nine months sales declines were largely due to the anticipated impact of the Clear Eyes supply chain constraints. As Ron highlighted earlier, thanks to our channel diversity, we continue to benefit from strong growth in channels like e-commerce, which have offset negative trends in most other channels. Also impacting year-to-date sales was category softness in the analgesic and cough and cold categories. Ron will note the implications of this when reviewing our outlook for the remainder of the year. Elsewhere, our international OTC segment business declined slightly year-to-date for two primary factors.
Speaker #1: '26, revenues decreased For the first nine months of fiscal 3.9% organically versus the prior year. By segment, excluding FX, North America segment revenues decreased 4.4%, and international segment revenues decreased 90 basis points versus the The first nine months' sales declines were prior year.
Speaker #1: largely due to the anticipated impact of the clear-eyed supply chain constraints. As Ron highlighted earlier, thanks to our channel diversity, we continue to benefit from strong growth in channels like e-commerce, which have offset negative trends in most other channels.
Speaker #1: Also impacting year-to-date sales was category softness in the analgesic and cough and cold categories. Ron will note the implications of this when reviewing our outlook for the remainder of the year.
Speaker #1: Elsewhere, our international OTC segment business declined slightly year-to-date for two primary factors. First, we were impacted by the timing of distributor orders year-to-date, but continue to see positive consumption trends.
Christine Sacco: First, we were impacted by the timing of distributor orders year to date, but continue to see positive consumption trends. Two, similar to the US, our sales results continue to be impacted by the limited eye care production. Despite these near-term impacts, we continue to have confidence in our long-term growth algorithm for 5% annual segment revenue growth. Total company gross margin of 55.7% in the first nine months was up 50 basis points versus the prior year. Looking forward, we anticipate a 57% adjusted gross margin in Q4. Our fiscal year 2026 tariff outlook is unchanged at approximately $5 million. Advertising and marketing came in at 14.1% of sales for the first nine months. For fiscal 2026, we now anticipate an A&M spend rate of just under 14% of sales.
Christine Sacco: First, we were impacted by the timing of distributor orders year to date, but continue to see positive consumption trends. Two, similar to the US, our sales results continue to be impacted by the limited eye care production. Despite these near-term impacts, we continue to have confidence in our long-term growth algorithm for 5% annual segment revenue growth. Total company gross margin of 55.7% in the first nine months was up 50 basis points versus the prior year. Looking forward, we anticipate a 57% adjusted gross margin in Q4. Our fiscal year 2026 tariff outlook is unchanged at approximately $5 million. Advertising and marketing came in at 14.1% of sales for the first nine months. For fiscal 2026, we now anticipate an A&M spend rate of just under 14% of sales.
Speaker #1: Two, similar to the US, our sales results continue to be impacted by the limited eye care production. Despite these near-term impacts, we continue to have confidence in our long-term growth algorithm for 5% annual segment revenue growth.
Speaker #1: Total company gross margin of 55.7% in the first nine months was up 50 basis points versus the prior year. Looking forward, we anticipate a 57% adjusted Q4.
Speaker #1: Our fiscal year '26 tariff outlook is unchanged at gross margin in approximately $5 million. Advertising and marketing came in at $14.1% of sales for the first nine months.
Speaker #1: For fiscal '26, we now anticipate an A&M spend rate of just under sales. Adjusted G&A expenses were up for the first nine months versus prior year, primarily due to the timing of certain expenses and also an increase in bad debt allowance in Q3 for one specific customer.
Christine Sacco: Adjusted G&A expenses were up for the first nine months versus prior year, primarily due to the timing of certain expenses and also an increase in bad debt allowance in Q3 for one specific customer. We anticipate full-year G&A of just over 10% as a percent of sales. Finally, adjusted diluted EPS of $3.16, compared to $3.20 in the prior year, as improved gross margin, more favorable interest expense, and share count helped offset the impact of lower revenue. Looking ahead, to reflect the latest assumptions following the closure of Pillar5 and our recent share repurchase efforts, for Q4, we expect interest expense of approximately $11 million, an approximate normalized tax rate of 24%, and a share count of just under 48 million. Now, let's turn to slide 10 and discuss cash flow.
Christine Sacco: Adjusted G&A expenses were up for the first nine months versus prior year, primarily due to the timing of certain expenses and also an increase in bad debt allowance in Q3 for one specific customer. We anticipate full-year G&A of just over 10% as a percent of sales. Finally, adjusted diluted EPS of $3.16, compared to $3.20 in the prior year, as improved gross margin, more favorable interest expense, and share count helped offset the impact of lower revenue. Looking ahead, to reflect the latest assumptions following the closure of Pillar5 and our recent share repurchase efforts, for Q4, we expect interest expense of approximately $11 million, an approximate normalized tax rate of 24%, and a share count of just under 48 million. Now, let's turn to slide 10 and discuss cash flow.
Speaker #1: We anticipate 10% as a percent of full-year G&A of just over sales. Finally, adjusted diluted EPS of $3.16 compared to $3.20 in the prior year, as improved gross margin, more favorable interest expense, and share count helped set the impact of lower revenue.
Speaker #1: Looking ahead, to reflect the latest assumptions following the closure of Pillar 5 and our recent share repurchase efforts, for Q4 we expect interest expense of approximately $11 million and approximate normalized tax rate of 24% and a share count of just under 48 million.
Speaker #1: Now it's turned to slide 10 and discuss cash flow. For the first nine months, we generated $208.8 million in free cash flow up 12.9% versus the prior year.
Christine Sacco: For the first nine months, we generated $208.8 million in free cash flow, up 12.9% versus the prior year. We continue to maintain industry-leading free cash flow and are maintaining our outlook for the full year of $245 million or more. For Q4, we do expect lower year-over-year quarterly free cash flow owing to timing and investments in working capital. At 31 December, our net debt was approximately $1 billion, equating to a covenant-defined leverage ratio of 2.6 times. Our strong financial position and consistent business performance continues to enable multiple uses of cash flow. In Q3, this included the closure of Pillar5, as Ron discussed earlier, for just over $110 million, as well as opportunistic share repurchases.
Christine Sacco: For the first nine months, we generated $208.8 million in free cash flow, up 12.9% versus the prior year. We continue to maintain industry-leading free cash flow and are maintaining our outlook for the full year of $245 million or more. For Q4, we do expect lower year-over-year quarterly free cash flow owing to timing and investments in working capital. At 31 December, our net debt was approximately $1 billion, equating to a covenant-defined leverage ratio of 2.6 times. Our strong financial position and consistent business performance continues to enable multiple uses of cash flow. In Q3, this included the closure of Pillar5, as Ron discussed earlier, for just over $110 million, as well as opportunistic share repurchases.
Speaker #1: We continue to maintain industry-leading free cash flow, and of $245 million are maintaining our outlook for the full year or more. For Q4, we do expect lower year-over-year quarterly free cash flow owing to timing and investments in working capital.
Speaker #1: At December 31st, our net debt was approximately $1 billion. Equating to a covenant-defined leverage ratio of 2.6 times. Our strong financial position and consistent business performance continues to enable multiple uses of cash flow.
Speaker #1: In Q3, this included the closure of Pillar 5, as Ron discussed earlier, for just over $110 million, as well as opportunistic slide 11 to review our year-to-date share repurchase efforts and our overall capital share repurchases.
Christine Sacco: Let's turn to slide 11 to review our year-to-date share repurchase efforts and our overall capital allocation strategy. Thanks to our strong financial profile and resulting free cash flow, optimal capital deployment is a valuable driver in enhancing long-term shareholder value. These priorities are unchanged, and we anticipate disciplined cash deployment against the various options of investing in our brands, M&A, share repurchases, and deleveraging to further enable the first three priorities. This year is another example of our powerful capital deployment strategy at work. Through the meaningful cash generation and resulting debt reduction we've achieved over the last few years, we have leeway for multiple value-adding priorities at once. To that point, beyond just the recent acquisition of Pillar5, we continue to actively assess M&A and see future opportunities to acquire leading consumer healthcare brands that can enhance our portfolio.
Christine Sacco: Let's turn to slide 11 to review our year-to-date share repurchase efforts and our overall capital allocation strategy. Thanks to our strong financial profile and resulting free cash flow, optimal capital deployment is a valuable driver in enhancing long-term shareholder value. These priorities are unchanged, and we anticipate disciplined cash deployment against the various options of investing in our brands, M&A, share repurchases, and deleveraging to further enable the first three priorities. This year is another example of our powerful capital deployment strategy at work. Through the meaningful cash generation and resulting debt reduction we've achieved over the last few years, we have leeway for multiple value-adding priorities at once. To that point, beyond just the recent acquisition of Pillar5, we continue to actively assess M&A and see future opportunities to acquire leading consumer healthcare brands that can enhance our portfolio.
Speaker #1: Strategy. Thanks to our strong financial profile and resulting free cash flow, optimal capital deployment is a valuable driver in enhancing long-term shareholder value. Let's turn to value.
Speaker #1: These priorities are unchanged and we anticipate disciplined cash deployment against the various options of investing in our brands, M&A, share repurchases, and de-leveraging to further enable the first three priorities.
Speaker #1: This year is another example of our powerful capital deployment strategy at work. Through the meaningful cash generation and resulting debt reduction, we've achieved over the last few years we have leeway for multiple value-adding priorities at once.
Speaker #1: To that point, beyond just the recent acquisition of Pillar 5, we continue to actively assess M&A and see future opportunities to acquire leading consumer healthcare brands that can enhance our portfolio.
Speaker #1: But in tandem, we've also capitalized on a unique opportunity to repurchase our shares at what we believe are particularly attractive levels while still retaining flexibility to pursue M&A and other deployment options.
Christine Sacco: But in tandem, we've also capitalized on a unique opportunity to repurchase our shares at what we believe are particularly attractive levels, while still retaining flexibility to pursue M&A and other deployment options. As part of our multiyear share repurchase authorization, we've now repurchased over $150 million in shares year to date, or nearly 5% of shares outstanding. As shown on the right side of the page, the majority of these repurchases came in Q2 and Q3, opportunistically at attractive return levels. This is a textbook example of how our healthy leverage position and strong and steady free cash flow allows us to be nimble in capital deployment and generate incremental value. With that, I'll turn it back to Ron.
Christine Sacco: But in tandem, we've also capitalized on a unique opportunity to repurchase our shares at what we believe are particularly attractive levels, while still retaining flexibility to pursue M&A and other deployment options. As part of our multiyear share repurchase authorization, we've now repurchased over $150 million in shares year to date, or nearly 5% of shares outstanding. As shown on the right side of the page, the majority of these repurchases came in Q2 and Q3, opportunistically at attractive return levels. This is a textbook example of how our healthy leverage position and strong and steady free cash flow allows us to be nimble in capital deployment and generate incremental value. With that, I'll turn it back to Ron.
Speaker #1: As part of our multi-year share repurchase authorization, we've now repurchased over $150 million 5% of shares outstanding. As shown on the right side of the page, the majority of these repurchases came in Q2 and Q3 in shares year-to-date, or nearly levels.
Speaker #1: This is a textbook example of how our healthy leverage position and strong and steady free cash flow allows us to be nimble in capital deployment and generate incremental value.
Speaker #1: With that, I'll turn it back to
Speaker #1: Ron. Thanks, Chris.
Ronald Lombardi: Thanks, Chris. Let's turn to slide 13 to wrap up. As we approach the end of a volatile year, we continue to have confidence that our diversified business model and strong financial profile have set us up for long-term success. For fiscal 2026, we have narrowed our sales outlook, forecasting approximately $1.1 billion in revenue. This update reflects continued consumption momentum in the growth channels of our business, like mass and e-commerce, but offset by slower order patterns in other channels that are facing shopper headwinds. We expect sequential improvement in Clear Eyes supply again in Q4, which equates to 3 consecutive quarters of improvement. EPS will follow sales and narrow to an anticipated adjusted diluted EPS of approximately $4.54 for the year. Lastly, we continue to anticipate free cash flow of $245 million or more.
Ronald Lombardi: Thanks, Chris. Let's turn to slide 13 to wrap up. As we approach the end of a volatile year, we continue to have confidence that our diversified business model and strong financial profile have set us up for long-term success. For fiscal 2026, we have narrowed our sales outlook, forecasting approximately $1.1 billion in revenue. This update reflects continued consumption momentum in the growth channels of our business, like mass and e-commerce, but offset by slower order patterns in other channels that are facing shopper headwinds. We expect sequential improvement in Clear Eyes supply again in Q4, which equates to 3 consecutive quarters of improvement. EPS will follow sales and narrow to an anticipated adjusted diluted EPS of approximately $4.54 for the year. Lastly, we continue to anticipate free cash flow of $245 million or more.
Speaker #2: Let's turn to slide 13 to wrap up. As we approach the end of a volatile year, we continue to have confidence that our diversified business model and strong financial profile have set us up for long-term success.
Speaker #2: For fiscal '26, we have narrowed our sales outlook forecasting approximately $1.1 billion in revenue. This update reflects continued consumption momentum in the growth channels of our business, like mass and e-commerce, but offset by slower order patterns in other channels that are facing shopper headwinds.
Speaker #2: We expect sequential improvement in Clear Eyes supply again in Q4, which equates to three consecutive quarters of improvement. EPS will follow sales and narrow to an anticipated adjusted diluted EPS of approximately $4.54 for the year.
Speaker #2: Lastly, we continue to anticipate free cash flow of $245 million or more. We have ample capital deployment optionality that has a history of maximizing value for our shareholders.
Ronald Lombardi: We have ample capital deployment optionality that has a history of maximizing value for our shareholders. With that, I'll open it up for questions. Operator?
Ronald Lombardi: We have ample capital deployment optionality that has a history of maximizing value for our shareholders. With that, I'll open it up for questions. Operator?
Speaker #2: With that, I'll open it up for questions. Operator?
Operator: As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Rupesh Parikh with Oppenheimer & Company. Your line is open.
Operator: As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Rupesh Parikh with Oppenheimer & Company. Your line is open.
Speaker #3: As a reminder to ask a question, please press star 11 on your telephone. Wait for your name to be announced. To withdraw your question, please press star 11 we compile the Q&A again.
Speaker #3: roster. Our first question comes from Rupesh Please stand by while Parik. With Oppenheimer and Company, your line is
Speaker #3: open. Good morning and thanks for taking my
[Analyst] (Oppenheimer & Company): Good morning, and thanks for taking my question. So, Ron, just going back to your commentary just about the shopper headwinds in the weaker parts of your distribution. Just curious, as you look at those customers, are you seeing that consumption shift to other retailers? And this is just more maybe inventory stocking that's happening in that channel. So just maybe more color in terms of that dynamic from a consumption perspective.
Rupesh D. Parikh: Good morning, and thanks for taking my question. So, Ron, just going back to your commentary just about the shopper headwinds in the weaker parts of your distribution. Just curious, as you look at those customers, are you seeing that consumption shift to other retailers? And this is just more maybe inventory stocking that's happening in that channel. So just maybe more color in terms of that dynamic from a consumption perspective.
Speaker #4: About the shopper headwinds in the question—so Ron, just going back to your commentary just week or parts of your distribution, just curious: as you look at those customers, are you seeing that consumption shift to other retailers?
Speaker #4: And this is just more maybe inventory stocking that's happening in that channel. So just maybe just more color in terms of the dynamic from a consumption perspective.
Speaker #2: Sure. Good morning, Rupesh. Yeah, I think you hit it right. Right on the head, which is we're seeing a volatile environment. Lots of things kind of distracting and impacting how consumers think about shopping.
Ronald Lombardi: Sure. Good morning, Rupesh. Yeah, I think you hit it right, right on the head, which is, you know, we're seeing a volatile environment, lots of things kind of distracting and impacting how consumers think about shopping. And what we're seeing is more of a continuation of a channel shift. So we're picking up the consumption, based on where they end up purchasing the product. So a continuation of the trend we've talked about earlier in the year.
Ronald Lombardi: Sure. Good morning, Rupesh. Yeah, I think you hit it right, right on the head, which is, you know, we're seeing a volatile environment, lots of things kind of distracting and impacting how consumers think about shopping. And what we're seeing is more of a continuation of a channel shift. So we're picking up the consumption, based on where they end up purchasing the product. So a continuation of the trend we've talked about earlier in the year.
Speaker #2: of a continuation of a channel shift. So And what we're seeing is more we're picking up the consumption based on where they end up purchasing the product.
Speaker #2: So a continuation of the trend we've talked about earlier in the
Speaker #2: year. Okay.
[Analyst] (Oppenheimer & Company): Okay, so you feel good about the overall consumption trends within the business. It's just more of this inventory type of destocking that's impacting the guide. Is that, is that the right way to think about it?
Rupesh D. Parikh: Okay, so you feel good about the overall consumption trends within the business. It's just more of this inventory type of destocking that's impacting the guide. Is that, is that the right way to think about it?
Speaker #4: So you feel good about the overall consumption trends within the business. It's just more of this inventory type of destocking that's impacting the guide.
Speaker #4: Is that the right way to think about
Speaker #4: it? Yeah, exactly.
Ronald Lombardi: Yeah, exactly. And again, it's back to the benefits of our business model, right? Diverse portfolio, broad distribution allows us to pick them up where they go looking for those trusted brands.
Ronald Lombardi: Yeah, exactly. And again, it's back to the benefits of our business model, right? Diverse portfolio, broad distribution allows us to pick them up where they go looking for those trusted brands.
Speaker #2: And again, it's back to the benefits of our business model, right? Diverse portfolio, broad distribution, allows us to pick them up where they go looking for those trusted
Speaker #2: brands. Okay.
[Analyst] (Oppenheimer & Company): Okay, my last question on that topic. Any sense of when this headwind may go away? Is it more Q4 specific, or do you expect it to bleed into the next fiscal year as well?
Rupesh D. Parikh: Okay, my last question on that topic. Any sense of when this headwind may go away? Is it more Q4 specific, or do you expect it to bleed into the next fiscal year as well?
Speaker #4: And my last question on that topic: Any sense of when this headwind may go away? Is it more Q4-specific, or do you expect it to bleed into the next fiscal year as well?
Speaker #2: Yeah. We're really looking at it quarter by you go back to September, we wouldn't have predicted the level of volatility we saw in the quarter.
Ronald Lombardi: Yeah, you know, we're really looking at it quarter by quarter. It's hard to predict, right? If you go back to September, you know, we wouldn't have predicted the level of volatility we saw in the quarter ended December. But again, back to, you know, the good news is, for us, that we're well positioned to manage through no matter what's going on.
Ronald Lombardi: Yeah, you know, we're really looking at it quarter by quarter. It's hard to predict, right? If you go back to September, you know, we wouldn't have predicted the level of volatility we saw in the quarter ended December. But again, back to, you know, the good news is, for us, that we're well positioned to manage through no matter what's going on.
Speaker #2: quarter-end of December. But again, back to the good news is for us is that we're well positioned to manage through no matter what's going
Speaker #2: on. Okay, great.
[Analyst] (Oppenheimer & Company): Okay, great. And then maybe my last question. I know it may be early, maybe limited what you can comment, but as you look towards your next fiscal year, is there any initial puts and takes that we should be thinking about, whether on the clear eye side or anything else at this point that you can comment on?
Rupesh D. Parikh: Okay, great. And then maybe my last question. I know it may be early, maybe limited what you can comment, but as you look towards your next fiscal year, is there any initial puts and takes that we should be thinking about, whether on the clear eye side or anything else at this point that you can comment on?
Speaker #4: And then maybe my last question, I know it may be early, maybe limited to what you can comment, but as you look towards your next fiscal year, is there any initial puts and takes we should be thinking about, whether on the clear eyes side or anything else at this point that you can comment on?
Speaker #4: And then maybe my last question, I know it may be early, maybe limited to what you can comment, but as you look towards your next fiscal year, is there any initial puts and takes we should be thinking about, whether on the clear eyes side or anything else at this point that you can comment
Speaker #2: Yeah. So I guess two things. The first is we continue to feel good It's hard to predict, right? about the performance of our If business on an organic base.
Ronald Lombardi: Yeah. So I guess two things. The first is, you know, we continue to feel good about the performance of our business on an organic base. And then secondly, we've talked about the expectation of continued increases in the Clear Eyes supply chain. So we'll provide more color and details for fiscal 27 on the May call.
Ronald Lombardi: Yeah. So I guess two things. The first is, you know, we continue to feel good about the performance of our business on an organic base. And then secondly, we've talked about the expectation of continued increases in the Clear Eyes supply chain. So we'll provide more color and details for fiscal 27 on the May call.
Speaker #2: And then secondly, we've talked about the expectation of continued increases in the Clear Eyes supply chain. So we'll provide more color and details for the call.
Rupesh D. Parikh: Great. Thank you. I'll pass it along.
Speaker #4: Thank you. I'll pass it fiscal '27 on the May
Speaker #4: along. Okay.
Ronald Lombardi: Okay, thank you.
Ronald Lombardi: Okay, thank you.
Speaker #2: Thank
Speaker #2: you. Thank
Speaker #3: you. Our next question comes from Susan Anderson with Canicore Genuity. Your line is
Operator: Thank you. Our next question comes from Susan Anderson with Canaccord Genuity. Your line is open.
Operator: Thank you. Our next question comes from Susan Anderson with Canaccord Genuity. Your line is open.
Speaker #3: open. Hi, good
Christine Sacco: Hi, good morning. Thanks for taking my questions. I guess maybe just a follow-up on the eye care business. It's good to see that sequential improvement there. I feel like we're starting to see better stock on the shelves. So I guess I'm curious kind of where you're at with that restocking versus where you used to be. Not sure if you could give kind of like a timeframe of, you know, when you think you'll be kind of fully back to stock with all of the SKUs and everything. And then also, I was curious, was there impact to margins during this disruption of the eye care supply? And should we expect a recovery, say, like in growth margin as this business gets back to normalization? Thanks. Hey, good morning, Susan, this is Chris.
Susan Anderson: Hi, good morning. Thanks for taking my questions. I guess maybe just a follow-up on the eye care business. It's good to see that sequential improvement there. I feel like we're starting to see better stock on the shelves. So I guess I'm curious kind of where you're at with that restocking versus where you used to be. Not sure if you could give kind of like a timeframe of, you know, when you think you'll be kind of fully back to stock with all of the SKUs and everything. And then also, I was curious, was there impact to margins during this disruption of the eye care supply? And should we expect a recovery, say, like in growth margin as this business gets back to normalization? Thanks.
Speaker #5: morning. Thanks for taking my questions. I guess maybe just a follow-up on the eye care business. It's good to see that sequential improvement there.
Speaker #5: I feel like we're starting to see better stock on the shelves. So I guess I'm curious kind of where you're at with that restocking versus where you used to be.
Speaker #5: Not sure if you could give kind of a timeframe of when you think you'll be kind of fully back to stock with all of the SKUs and everything.
Speaker #5: And then also, I was curious was there an impact to margins during this disruption of the eye care supply? And should we expect a recovery, say, in gross margin as the business gets back to normalization?
Speaker #6: Hey, good morning, Susan.
Christine Sacco: Hey, good morning, Susan, this is Chris. So, you know, in terms of Clear Eyes supply, I think we continue to feel good about the strategic decision to acquire Pillar5, right? And we talked about bringing on two new eye care suppliers earlier in the year, and, again, feel good about that. It's gonna ramp, right? It's not a switch that we turn on. So in terms of restocking, right, it's gonna take us some time. We're gonna be probably incurring this as we work through fiscal 2027. But again, sequential improvement expected in Q3 that we felt it and continue to expect it for our Q4 as we move forward. From a margin perspective, relatively stable, right? We always talk about whether we're channel agnostic or pretty much brand agnostic, right?
Speaker #6: Thanks. This is Chris. So, in terms of Clear Eyes supply, I think we continue to feel good about the strategic decision to acquire Pillar Five, right?
Christine Sacco: So, you know, in terms of Clear Eyes supply, I think we continue to feel good about the strategic decision to acquire Pillar5, right? And we talked about bringing on two new eye care suppliers earlier in the year, and, again, feel good about that. It's gonna ramp, right? It's not a switch that we turn on. So in terms of restocking, right, it's gonna take us some time. We're gonna be probably incurring this as we work through fiscal 2027. But again, sequential improvement expected in Q3 that we felt it and continue to expect it for our Q4 as we move forward. From a margin perspective, relatively stable, right? We always talk about whether we're channel agnostic or pretty much brand agnostic, right?
Speaker #6: And we talked about bringing on two new eye care suppliers earlier in the year. It's going to ramp, right? And again, feel good about that.
Speaker #6: …that we turn on. So, in terms of restocking, right, it's going to take us some time. We're going to be probably incurring this as we work through fiscal '27.
Speaker #6: But again, sequential improvement expected. The third quarter that we felt it and continue to expect it for our fourth quarter as we move forward.
Speaker #6: From a margin perspective, relatively stable. Right? We always talk about whether we're channel agnostic or pretty much brand agnostic, right? We do see some mix, but it's not material.
Christine Sacco: We do see some mix, but it's not, it's not material. So, not expecting a meaningful change in our margin as we move forward in terms of eye care supply.
Christine Sacco: We do see some mix, but it's not, it's not material. So, not expecting a meaningful change in our margin as we move forward in terms of eye care supply.
Speaker #6: So, not expecting a meaningful change in our margin as we move forward in terms of eye care supply.
Speaker #5: Okay, got it. And then I guess maybe a question on e-commerce. Obviously, it continues to grow. Pretty well. Maybe if you could give us an update where your penetration is at and then also are there certain areas of the business that's growing faster online than others?
[Analyst] (William Blair): Okay, got it. And then I guess maybe a question on e-commerce. Obviously, it continues to grow pretty well. Maybe if you could give, give us an update where your penetration is at, and then also, are there certain areas of the business that's growing faster online than others? And where you think the penetration can be longer term?
Susan Anderson: Okay, got it. And then I guess maybe a question on e-commerce. Obviously, it continues to grow pretty well. Maybe if you could give, give us an update where your penetration is at, and then also, are there certain areas of the business that's growing faster online than others? And where you think the penetration can be longer term?
Speaker #5: And where you think the penetration can be longer term?
Speaker #2: So Susan, our consumption grew over 10% in the third quarter. So we continue to see solid continuing consumption growth, even on top of great results year after year.
Ronald Lombardi: So, Susan, our consumption grew over 10% in Q3, so we continue to see solid continuing consumption growth, even on top of, you know, great results year after year. You know, calling the ultimate channel share is hard to predict, right? It depends on what shoppers choose to do in the future. But clearly, what we're seeing today is that shoppers are flocking to places where they get broad offering of the products they're looking for, great pricing, price transparency, and service. And that service is whether it's, you know, overnight or same day shipment, or order it online, pick it up in the parking lot, or being able to get into the store and pick up all of the things you may wanna get in a shopping trip.
Ronald Lombardi: So, Susan, our consumption grew over 10% in Q3, so we continue to see solid continuing consumption growth, even on top of, you know, great results year after year. You know, calling the ultimate channel share is hard to predict, right? It depends on what shoppers choose to do in the future. But clearly, what we're seeing today is that shoppers are flocking to places where they get broad offering of the products they're looking for, great pricing, price transparency, and service. And that service is whether it's, you know, overnight or same day shipment, or order it online, pick it up in the parking lot, or being able to get into the store and pick up all of the things you may wanna get in a shopping trip.
Speaker #2: Calling the ultimate channel share is hard to predict, right? It depends on what shoppers choose to do in the future. But clearly, what we're seeing today is that shoppers are flocking to places where they get broad offering of the products they're looking for, great pricing, price transparency, and service.
Speaker #2: And that service is whether it's overnight or same-day shipment or order it online, pick it up in the parking lot, or being able to get into the store and pick up all of the things you may want to get in a shopping trip.
Speaker #2: So that we've seen that change dramatically over the last five or six years. We'll see where it goes forward. But the way we think about it is every day it's our job to work with our retail partners to help them be successful in meeting their objectives.
Ronald Lombardi: So, you know, that we've seen that change dramatically over the last five or six years. We'll see where it goes forward. But, you know, the way we think about it is, every day it's our job to work with our retail partners to help them be successful in meeting their objectives. And if we do that, we'll win with the shopper, and we'll win with our brands.
Ronald Lombardi: So, you know, that we've seen that change dramatically over the last five or six years. We'll see where it goes forward. But, you know, the way we think about it is, every day it's our job to work with our retail partners to help them be successful in meeting their objectives. And if we do that, we'll win with the shopper, and we'll win with our brands.
Speaker #2: And if we do that, we'll win with the shopper and we'll win with our brands.
[Analyst] (William Blair): Great. Okay. And then maybe one last one for me, just on the women's health business. Maybe if you could give an update there. It looks like it took another dip in the quarter, but sequentially it was better. I guess, was that category susceptible to kind of these consumer shopping patterns or retailer destocking, or is it just ordering patterns? Thanks.
Susan Anderson: Great. Okay. And then maybe one last one for me, just on the women's health business. Maybe if you could give an update there. It looks like it took another dip in the quarter, but sequentially it was better. I guess, was that category susceptible to kind of these consumer shopping patterns or retailer destocking, or is it just ordering patterns? Thanks.
Speaker #5: Okay. And then maybe one last one Great. for me, just on the women's health business. Maybe if you could give an update there. It looks quarter, but sequentially it was better.
Speaker #5: I guess, was that category susceptible to kind of—it took another dip in the context of these consumer shopping patterns or retailer destocking? Or is it just ordering patterns?
Speaker #5: Thanks.
Speaker #2: Yeah, so again, let's talk about the two different brands in women's health. Monistat continues to do well. It's at kind of historic peak levels of share.
Ronald Lombardi: Yeah. So again, let's talk about the two different brands in women's health. Monistat continues to do well. It's at, you know, kind of historic peak levels of share. These days, we continue to look at opportunities to expand the brand into care. So we've got some great new wash products that are doing very well this year. So Monistat continues to do well. Summer's Eve continues to be well positioned for long-term growth. As you just said, we're seeing kind of volatility in year-to-year comps. And, you know, we talked about in the fourth quarter last year about a spike in dotcom orders and then kind of the offset in the first quarter of this year.
Ronald Lombardi: Yeah. So again, let's talk about the two different brands in women's health. Monistat continues to do well. It's at, you know, kind of historic peak levels of share. These days, we continue to look at opportunities to expand the brand into care. So we've got some great new wash products that are doing very well this year. So Monistat continues to do well. Summer's Eve continues to be well positioned for long-term growth. As you just said, we're seeing kind of volatility in year-to-year comps. And, you know, we talked about in the fourth quarter last year about a spike in dotcom orders and then kind of the offset in the first quarter of this year. So if you go back and look at TTM for the end of December, the women's health franchise continues to do pretty well. So we continue to feel good about it going forward.
Speaker #2: These days, we continue to look at opportunities to expand the brand into care. So we've got some great new wash products that are doing very well this year.
Speaker #2: So Monistat continues to do well. Summers Eve continues to be well positioned for long-term growth. As you just said, we're seeing kind of volatility in year-to-year comps.
Speaker #2: And we talked about in the fourth quarter last year about a spike in dot-com orders and then kind of the offset in the first quarter of this year.
Ronald Lombardi: So if you go back and look at TTM for the end of December, the women's health franchise continues to do pretty well. So we continue to feel good about it going forward.
Speaker #2: look at TTM for the end of December, the So if you go back and women's health franchise continues to do pretty well. So we continue to feel good about it going forward.
Speaker #5: Great. Thanks so much. Good luck.
[Analyst] (William Blair): Great. Thanks so much. Good luck.
Susan Anderson: Great. Thanks so much. Good luck.
Speaker #2: Sure. Thanks, Susan.
Ronald Lombardi: Sure. Thanks, Susan.
Ronald Lombardi: Sure. Thanks, Susan.
Speaker #3: Thank you. Our next question Davis with Jefferies. Your comes from Keith line is open.
Operator: Thank you. Our next question comes from Keith Devas with Jefferies. Your line is open.
Operator: Thank you. Our next question comes from Keith Devas with Jefferies. Your line is open.
[Analyst] (Jefferies): Hey, good morning. Thanks for the question. I guess very quickly on the capital allocation front, I believe you guys have bought back more stock this year than in recent memory. Maybe just talk through the decision process of doing that versus reinvesting. Is this something we should be accustomed to at these levels? Just kind of the go-forward path of thinking about capital returns and in the absence of M&A, if this is kind of the right level that you might be expecting to continue repurchases at. Thanks.
Keith Devas: Hey, good morning. Thanks for the question. I guess very quickly on the capital allocation front, I believe you guys have bought back more stock this year than in recent memory. Maybe just talk through the decision process of doing that versus reinvesting. Is this something we should be accustomed to at these levels? Just kind of the go-forward path of thinking about capital returns and in the absence of M&A, if this is kind of the right level that you might be expecting to continue repurchases at. Thanks.
Speaker #7: question. I guess very Hey, good morning. quickly on the capital allocation front, Thanks for the I believe you guys have bought back more stock this year than in recent memory.
Speaker #7: Maybe just talk through the decision process of doing that versus reinvesting. Is this something we should be accustomed to at these levels? Just kind of the go-forward path of thinking about capital returns, and in the absence of M&A.
Speaker #7: If this is kind of the right level that you might be expecting to continue repurchases at. Thanks.
Speaker #6: Hey, good morning, Keith. So, as we've talked about, certainly investing in our brands is priority number one. But we do continue to evaluate M&A.
Christine Sacco: Yeah, good morning, Keith. So, you know, as we've talked about, certainly investing in our brands is priority number one, but we do continue to evaluate M&A. That is our secondary use of capital preference at this point, but we're gonna be disciplined. So, there's a lot out there. We're looking at all of it, and we'll continue to evaluate it. But, given the market reaction to our stock in recent periods, it's math, right? We do the math, and we think we're getting a pretty good return for our shareholders by reinvesting in ourselves at this point. And so we'll continue to evaluate it on that basis. But, it comes secondary to M&A, and certainly we don't impact the business in investing in our brands by doing it.
Christine Sacco: Yeah, good morning, Keith. So, you know, as we've talked about, certainly investing in our brands is priority number one, but we do continue to evaluate M&A. That is our secondary use of capital preference at this point, but we're gonna be disciplined. So, there's a lot out there. We're looking at all of it, and we'll continue to evaluate it. But, given the market reaction to our stock in recent periods, it's math, right? We do the math, and we think we're getting a pretty good return for our shareholders by reinvesting in ourselves at this point. And so we'll continue to evaluate it on that basis. But, it comes secondary to M&A, and certainly we don't impact the business in investing in our brands by doing it.
Speaker #6: That is our secondary use of capital preference at this point. But we're going to be disciplined. So there's a lot out there. We're looking at all of it, and we'll continue to evaluate it.
Speaker #6: But given the market reaction to our stock and recent periods, it's math, right? We do the math, and we think we're getting a pretty good return for our shareholders.
Speaker #6: By reinvesting in ourselves at this point, and so we'll continue to evaluate it on that basis. But it comes secondary to M&A, and certainly, we don't impact the business in investing in our brands by doing it.
Speaker #6: So, strong free cash flow—consistent—and we have optionality at this point, which in years past maybe we didn't have. But we're levered; I think we stand in a good position to continue to—
Christine Sacco: So strong free cash flow, consistent, and we have optionality at this point, which, you know, in years past maybe we didn't have. But where leverage is, I think we stand in a good position to continue to repurchase.
Christine Sacco: So strong free cash flow, consistent, and we have optionality at this point, which, you know, in years past maybe we didn't have. But where leverage is, I think we stand in a good position to continue to repurchase.
Speaker #3: Thank you. Our next question comes from John Anderson with William Blair. Your line is open.
Operator: Thank you. Our next question comes from Jon Andersen with William Blair. Your line is open.
Operator: Thank you. Our next question comes from Jon Andersen with William Blair. Your line is open.
Speaker #3: open. Hey, good morning.
[Analyst] (William Blair): Hey, good morning. Thanks for the question.
Jon Andersen: Hey, good morning. Thanks for the question.
Speaker #8: Thanks for the question. Morning. So I guess my first question is on sales and the outlook. I think you mentioned in the prepared comments quarter were actually slightly ahead of your expectation.
Ronald Lombardi: Hey, John.
Ronald Lombardi: Hey, John.
[Analyst] (William Blair): Morning. So, I guess my first question is on sales and the outlook. I think you mentioned in the prepared comments that the sales in Q3 were actually slightly ahead of your expectations, but then the guidance points us to the low end of the prior range, which implies, you know, slower growth than you anticipate in Q4. Can you kind of unpack that for us a little bit? What's affecting the Q4 outlook? Thanks.
Jon Andersen: Morning. So, I guess my first question is on sales and the outlook. I think you mentioned in the prepared comments that the sales in Q3 were actually slightly ahead of your expectations, but then the guidance points us to the low end of the prior range, which implies, you know, slower growth than you anticipate in Q4. Can you kind of unpack that for us a little bit? What's affecting the Q4 outlook? Thanks.
Speaker #8: But then the guidance points us to the low end of the prior range. Which implies slower growth than you anticipated in the fourth quarter.
Speaker #8: Can you kind of unpack that for us a little bit? What's affecting the fourth quarter outlook? Thanks.
Speaker #6: Sure. So first, consumption for the fourth quarter, we continue to feel good about it. So it's not really a consumption issue, John. We're really trying to reflect the order patterns that we saw in the third quarter and the volatility.
Ronald Lombardi: ... So first, consumption for the fourth quarter, we continue to feel good about it, so it's not really a consumption issue, John. We're really trying to reflect the order patterns that we saw in the third quarter and the volatility. You know, the big theme we saw in the third quarter, and really for this year, is that the retailers and the channels that are doing well, we've got consistent order patterns. They're growing to support their growing businesses, and the channels and the retailers with headwinds are adjusting their order patterns and their, you know, and their business accordingly. So we're trying to reflect that in the fourth quarter outlook, John. So that's really the big thing there.
Ronald Lombardi: ... So first, consumption for the fourth quarter, we continue to feel good about it, so it's not really a consumption issue, John. We're really trying to reflect the order patterns that we saw in the third quarter and the volatility. You know, the big theme we saw in the third quarter, and really for this year, is that the retailers and the channels that are doing well, we've got consistent order patterns. They're growing to support their growing businesses, and the channels and the retailers with headwinds are adjusting their order patterns and their, you know, and their business accordingly. So we're trying to reflect that in the fourth quarter outlook, John. So that's really the big thing there.
Speaker #6: The big theme we saw in the third quarter and really for this year is that the retailers and the channels that well. We've got consistent order patterns.
Speaker #6: They're growing to support their growing businesses. And the channels and the are doing retailers with headwinds are adjusting their order patterns and their business accordingly.
Speaker #6: So we're trying to reflect that in the fourth quarter outlook. John, so that's really the big thing there.
Speaker #8: Okay. So I want to talk about consumption though. So what did you see from a consumption standpoint in the third quarter? Maybe you want to X out, clear eyes.
[Analyst] (William Blair): Okay. So, I wanna talk about consumption, though. So, what did you see from a consumption standpoint in Q3? Maybe you wanna X out Clear Eyes, I'm not sure, so the rest of the portfolio and, and what level of consumption growth are you kind of anticipating in Q4? I'm just trying to understand, are we hitting consumption, you know, is it running at our target, what? 2% to 3% rate?
Jon Andersen: Okay. So, I wanna talk about consumption, though. So, what did you see from a consumption standpoint in Q3? Maybe you wanna X out Clear Eyes, I'm not sure, so the rest of the portfolio and, and what level of consumption growth are you kind of anticipating in Q4? I'm just trying to understand, are we hitting consumption, you know, is it running at our target, what? 2% to 3% rate?
Speaker #8: Of the portfolio, I'm not sure about the rest. And what level of consumption, quarter? I'm just trying to understand, consumption— is it running at our target?
Speaker #8: What, 2 to 3 percent rate?
Speaker #2: Yeah. So for consumption in the third quarter, right, with our portfolio, we always see brands and categories that do better than we might have expected.
Ronald Lombardi: Yeah. So for consumption in the Q3, right? With our portfolio, you know, we always see brands, and categories that do better than we might have expected, some in line, and some a bit behind. So we continue to have great momentum in GI. Fleet and Dramamine are doing really well. Skin is another space that's doing well. Cough, cold for the Q3, and again, these are shipments, was fairly stable year-over-year, but incident levels are behind where they were last year. The two other places to call out, you've heard us talk about lice. The incident levels continue to be down year-over-year, but the surprise for us in the Q3 was the analgesics category.
Ronald Lombardi: Yeah. So for consumption in the Q3, right? With our portfolio, you know, we always see brands, and categories that do better than we might have expected, some in line, and some a bit behind. So we continue to have great momentum in GI. Fleet and Dramamine are doing really well. Skin is another space that's doing well. Cough, cold for the Q3, and again, these are shipments, was fairly stable year-over-year, but incident levels are behind where they were last year. The two other places to call out, you've heard us talk about lice. The incident levels continue to be down year-over-year, but the surprise for us in the Q3 was the analgesics category.
Speaker #2: Some in line and some a bit behind. So we continue to have great momentum in GI. Fleet and Dramamine are doing really well. Skin is another space that's doing well.
Speaker #2: Cough Cold for the third quarter, and again, these are shipments, was fairly stable year over year. But incident levels are behind where they were last year.
Speaker #2: The two other places to call out, you've heard us talk about Lyse, the incident levels continue to be down year over year. But the surprise for us in the third quarter was the analgesics category.
Ronald Lombardi: You know, the announcements that came out on acetaminophen early in Q3 really impacted the category. You know, other big brands in that space were down as much as 15%. We were down a couple of points. So although impacted slightly, it still wasn't what we would've expected or in line with recent trends. To go back and look at the 3 quarters ended September, the analgesic category for us was growing nicely, our brands, BC and Goody's. So, those were the outliers in Q3. For Q4, we anticipate the analgesics will get better.
Ronald Lombardi: You know, the announcements that came out on acetaminophen early in Q3 really impacted the category. You know, other big brands in that space were down as much as 15%. We were down a couple of points. So although impacted slightly, it still wasn't what we would've expected or in line with recent trends. To go back and look at the 3 quarters ended September, the analgesic category for us was growing nicely, our brands, BC and Goody's. So, those were the outliers in Q3. For Q4, we anticipate the analgesics will get better. Lice will continue to be behind, cough cold will continue to be behind, but in general, the consumption for the portfolio, you put all the pieces together, excluding kind of the analgesics and the lice, are generally in line with what we'd expect.
Speaker #2: The announcements that came out on acetaminophen, early in the third quarter, really impacted the category. Other big brands in that space were down as much as 15%.
Speaker #2: We were down a couple of points. So although impacted slightly, it's still wasn't what we would have expected or in line with recent trends.
Speaker #2: To go back and look at the three quarters ended September, the analgesic category for us was growing nicely. Our brands, BC and Goodies. So those were the outliers in the third quarter.
Speaker #2: fourth quarter, we anticipate For the the analgesics will get behind. Cough Cold will continue to be behind. But in general, you put all the pieces the consumption for the portfolio, together, excluding kind of the better.
Ronald Lombardi: Lice will continue to be behind, cough cold will continue to be behind, but in general, the consumption for the portfolio, you put all the pieces together, excluding kind of the analgesics and the lice, are generally in line with what we'd expect.
Speaker #2: analgesics and the Lyse, are generally in line with what we'd expect. Lyse will continue to be
[Analyst] (William Blair): Okay. That's helpful. Thanks for that. Just a last one is more referencing an earlier question on kind of sales for 27. You know, you mentioned actually, Ron, I think you mentioned kind of happy with the base business performance. Obviously, there are always puts and takes, to your point, across a diverse portfolio like yours, but good base level consumption. And then you have the benefit, if you will, of supply conditions improving behind your eye and ear care category segment. Does that get us, you know, kind of an above algorithm year?
Jon Andersen: Okay. That's helpful. Thanks for that. Just a last one is more referencing an earlier question on kind of sales for 27. You know, you mentioned actually, Ron, I think you mentioned kind of happy with the base business performance. Obviously, there are always puts and takes, to your point, across a diverse portfolio like yours, but good base level consumption. And then you have the benefit, if you will, of supply conditions improving behind your eye and ear care category segment. Does that get us, you know, kind of an above algorithm year?
Speaker #8: that. Just the last Okay. That's helpful. Thanks for one is more referencing an earlier question. On kind of sales for '27, you mentioned actually, Ron, I think you mentioned kind of happy with the base business performance.
Speaker #8: Obviously, there are always puts and takes to your point across a diverse portfolio like yours. But good base level consumption. And then you have the benefit, if you will, of supply conditions improving behind your eye and ear care segment.
Speaker #8: Does that get us kind of an above algorithm year? reasonable hypothesis? Or is Is that a this kind of, hey, the so fluid and some of consumer dynamic is these retailers that aren't maybe performing as well, need to or are likely to provide an offset?
[Analyst] (William Blair): Is that a reasonable hypothesis, or is this kind of, "Hey, the consumer dynamic is so fluid, and some of these retailers that aren't maybe performing as well, you know, are likely to provide an offset?" I'm just trying to kinda get a little bit of a handle on how you're handicapping or thinking about the top line in 2027. Thanks.
Jon Andersen: Is that a reasonable hypothesis, or is this kind of, "Hey, the consumer dynamic is so fluid, and some of these retailers that aren't maybe performing as well, you know, are likely to provide an offset?" I'm just trying to kinda get a little bit of a handle on how you're handicapping or thinking about the top line in 2027. Thanks.
Speaker #8: I'm just trying to kind of get a little bit of a about the top line and in '27. Thanks.
Ronald Lombardi: Yeah. So let's break it into two pieces. I'll talk about consumption, which is where you started with. You know, again, we feel good about the broad portfolio and the opportunities for 2027. And then Clear Eyes, as we've talked about, we expect to have more product available at retail, so that's gonna give us a lift in consumption for next year. At the May call, you know, we'll know more between now and May in terms of what to expect for the impact for retail order patterns as we get into 2027. But, you know, it always starts with consumption and brand performance. We feel good about that base, and we'll provide more detail in May for 2027.
Ronald Lombardi: Yeah. So let's break it into two pieces. I'll talk about consumption, which is where you started with. You know, again, we feel good about the broad portfolio and the opportunities for 2027. And then Clear Eyes, as we've talked about, we expect to have more product available at retail, so that's gonna give us a lift in consumption for next year. At the May call, you know, we'll know more between now and May in terms of what to expect for the impact for retail order patterns as we get into 2027. But, you know, it always starts with consumption and brand performance. We feel good about that base, and we'll provide more detail in May for 2027.
Speaker #2: Pieces. 27. And then, clear eyes as we've talked—and I'll talk about consumption, product available at retail. So that's going to give us—so let's break it into two—about, we expect to have more of a lift in consumption for next year.
Speaker #2: At the May call, we'll know more between now and May in terms of what to expect for the impact on retail order patterns as we get into '27.
Speaker #2: But it always starts with consumption and brand performance. We feel good about that base. And we'll provide more detail in May for '27.
Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. Again, that is star one one to ask a question. Our next question comes from Mitchell Pinheiro with Sturdivant & Co. Your line is open.
Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. Again, that is star one one to ask a question. Our next question comes from Mitchell Pinheiro with Sturdivant & Co. Your line is open.
Speaker #1: reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. Again, that is star 11 to ask a Thank you.
Speaker #1: question. Our next question comes As a from Mitchell Pinheiro with Start Event and Co. Your line is open.
[Analyst] (Sturdivant & Co.): Hey, good morning. So, just curious, you know, we haven't talked much, or at least on advertising and marketing. Is there any changes in that as e-commerce becomes bigger? I mean, are you able to take, you know, any advantage, take any money out of that bucket, or just become a little more? Does it require a little more focus as e-commerce grows?
Mitchell B. Pinheiro: Hey, good morning. So, just curious, you know, we haven't talked much, or at least on advertising and marketing. Is there any changes in that as e-commerce becomes bigger? I mean, are you able to take, you know, any advantage, take any money out of that bucket, or just become a little more? Does it require a little more focus as e-commerce grows?
Speaker #3: Hey, good morning. So just a question. We've just curious, we haven't talked much or at least on advertising and marketing. Is there any advertising and marketing do you anticipate any changes in that as e-commerce becomes bigger?
Speaker #3: I mean, are you able to take any advantage, take any money out of that bucket, or does it more does it require a little more focus as e-commerce become a little grows?
Speaker #2: Yeah. So good morning, Mitch. Thanks for the question. So our marketing is always going to evolve based on what the consumer is doing. And how best to connect with them.
Ronald Lombardi: Yeah. So good morning, Mitch. Thanks for the question. So our marketing is always going to evolve based on what the consumer is doing and how best to connect with them. And in today's environment, certainly aligning your marketing initiatives to better connect with the shoppers as they're shopping differently, right? Increasing their purchases on .com, through, you know, whatever retail partner we have in their DTC .com initiatives. So it's something we've been working on for quite a while, to better align those investments to connect with the shoppers. You know, it doesn't, you know, we're not wired to think about, "Hey, can we save money by this evolving change?" Right? We'll look for ways to be more efficient and effective, and if we can find additional dollars, we're going to invest it behind long-term brand building.
Ronald Lombardi: Yeah. So good morning, Mitch. Thanks for the question. So our marketing is always going to evolve based on what the consumer is doing and how best to connect with them. And in today's environment, certainly aligning your marketing initiatives to better connect with the shoppers as they're shopping differently, right? Increasing their purchases on .com, through, you know, whatever retail partner we have in their DTC .com initiatives. So it's something we've been working on for quite a while, to better align those investments to connect with the shoppers. You know, it doesn't, you know, we're not wired to think about, "Hey, can we save money by this evolving change?" Right? We'll look for ways to be more efficient and effective, and if we can find additional dollars, we're going to invest it behind long-term brand building.
Speaker #2: And in today's environment, certainly aligning your marketing initiatives to better connect with the shoppers as they're shopping differently, right? Increasing their purchases on dot-com.
Speaker #2: Through whatever retail partner we have and their dot com initiatives. So it's something we've been working on for quite a while to better align those investments to connect with the shoppers.
Speaker #2: It doesn't we're not wired to think about, hey, can we save money by this evolving change, right? We'll look for ways to be more efficient and effective.
Speaker #2: And if we can find additional dollars, we're going to invest it behind long-term brand building. But evolving how we think about better connecting with the consumers is something that's always been part of what we've been doing.
Ronald Lombardi: But evolving how we think about better connecting with the consumers is something that's always been part of what we've been doing.
Ronald Lombardi: But evolving how we think about better connecting with the consumers is something that's always been part of what we've been doing.
Speaker #3: Okay. And then as it comes to I mean, private label is always really relatively non-existent in your category. But I'm just curious whether you're seeing anything in that regard in the current environment.
[Analyst] (Sturdivant & Co.): Okay. And then, as it comes to, I mean, private label is always really relatively nonexistent in your category, but I'm just curious whether you're seeing anything in that regard, in the current environment?
Mitchell B. Pinheiro: Okay. And then, as it comes to, I mean, private label is always really relatively nonexistent in your category, but I'm just curious whether you're seeing anything in that regard, in the current environment?
Speaker #2: Yeah, of the same—no, it's more for private label share. In this environment, right, when you're in a category once every year or two or three years, and you used a brand or a product the previous time you or somebody was sick, somebody in your family was sick, and it worked, you're going to continue to look for that trusted brand to treat your illness.
Ronald Lombardi: Yeah. No, it's more of the same for private label share in this environment, right? When you're in a category once every year or two or three years, and you used a brand or a product the previous time you or somebody was sick, somebody in your family was sick and it worked, you're going to continue to look for that trusted brand to treat your illness. So we don't anticipate private label share changes in this environment.
Ronald Lombardi: Yeah. No, it's more of the same for private label share in this environment, right? When you're in a category once every year or two or three years, and you used a brand or a product the previous time you or somebody was sick, somebody in your family was sick and it worked, you're going to continue to look for that trusted brand to treat your illness. So we don't anticipate private label share changes in this environment.
Speaker #2: So we don't anticipate private label share changes in this environment.
Speaker #3: Okay. And then I guess sort of back to advertising marketing, but as you grow your eye and ear, eye care business back to prior levels and is it going to take a little more marketing?
[Analyst] (Sturdivant & Co.): Okay. And then, I guess, like, sort of back to advertising and marketing, but as you grow your eye care business back to, you know, prior levels, and is it going to take a little more marketing? I know shelf resets are a big part of it, but is it going to require, like, for, you know, 12 months, additional focus there?
Mitchell B. Pinheiro: Okay. And then, I guess, like, sort of back to advertising and marketing, but as you grow your eye care business back to, you know, prior levels, and is it going to take a little more marketing? I know shelf resets are a big part of it, but is it going to require, like, for, you know, 12 months, additional focus there?
Speaker #3: I mean, I know shelf resets are a big part of it, but is it going to require 12 months of additional focus there?
Speaker #2: Yeah. We'll see an increase in marketing spending and activity for clear eyes. As more product becomes available at retail, but we'll look to shift funds around during the last year or so we haven't meaningfully taken down advertising and marketing in total.
Ronald Lombardi: Yeah. We'll see an increase in marketing spending and activity for Clear Eyes as more product becomes available at retail. But we'll look to shift funds around. You know, during the last year or so, we haven't meaningfully taken down advertising and marketing in total. We've shifted it to other places to accelerate activities or take advantage of other opportunities, and we'll look to move monies around. So we wouldn't expect any impact on the profile of the P&L as we get back to chasing Clear Eyes activity.
Ronald Lombardi: Yeah. We'll see an increase in marketing spending and activity for Clear Eyes as more product becomes available at retail. But we'll look to shift funds around. You know, during the last year or so, we haven't meaningfully taken down advertising and marketing in total. We've shifted it to other places to accelerate activities or take advantage of other opportunities, and we'll look to move monies around. So we wouldn't expect any impact on the profile of the P&L as we get back to chasing Clear Eyes activity.
Speaker #2: We've shifted it to other places to accelerate activities or take advantage of other opportunities. And we'll look to move monies around. So we wouldn't expect any impact on the profile of the P&L as we get back to chasing clear eyes activity.
Speaker #3: Okay. And I guess just one last question. I mean, you've done a excellent job sort of line extending, whether it's Dramamine and Nausea or whether it's with Summer's Eve so on and so forth.
[Analyst] (Sturdivant & Co.): Okay. I guess just one last, just one last question. I mean, you've done an excellent job, sort of, line extending, whether it's, you know, with Dramamine and nausea, or whether it's with Summer's Eve, so on and so forth. You sort of once a year, you know, focus on a category, with, you know, some extra, you know, new news. Anything you can talk about in 2027 that might be an extended focus?
Mitchell B. Pinheiro: Okay. I guess just one last, just one last question. I mean, you've done an excellent job, sort of, line extending, whether it's, you know, with Dramamine and nausea, or whether it's with Summer's Eve, so on and so forth. You sort of once a year, you know, focus on a category, with, you know, some extra, you know, new news. Anything you can talk about in 2027 that might be an extended focus?
Speaker #3: You sort of once a year focus on a category with some extra new news. Anything you can talk about in 2027 that might be an extended focus?
Speaker #2: Yeah. So we don't tend to talk about product until it's at retail. And we're just getting into the Shelf Reset timing for the year.
Ronald Lombardi: Yeah. So, you know, we don't tend to talk about product until it's at retail, and we're just getting into the shelf reset timing for the year. But the one product I will point out is Compound W launched a skin tag product, and it's found at mass and .com right now, and it's quickly accelerated at mass to be the number one skin tag product. So that's an example of us stretching that Compound W brand into skin tag treatments and the power of the brand to connect to that kind of treatment occasion, you know, expanding beyond the legacy work products.
Ronald Lombardi: Yeah. So, you know, we don't tend to talk about product until it's at retail, and we're just getting into the shelf reset timing for the year. But the one product I will point out is Compound W launched a skin tag product, and it's found at mass and .com right now, and it's quickly accelerated at mass to be the number one skin tag product. So that's an example of us stretching that Compound W brand into skin tag treatments and the power of the brand to connect to that kind of treatment occasion, you know, expanding beyond the legacy work products.
Speaker #2: But the one product I will point out is Compound W launched a skin tag product and it's found at mass and dot com right now.
Speaker #2: Accelerated at mass to be the number—and it's quickly—the number one skin tag product. So that's an example of us stretching that Compound W brand into skin tag treatments.
Speaker #2: And the power of the brand to connect to that kind of treatment occasion expanding beyond the legacy work products.
Speaker #3: Okay. That's great. That's all from me. Thank you.
[Analyst] (Sturdivant & Co.): Okay. That's great. That's all for me. Thank you.
Mitchell B. Pinheiro: Okay. That's great. That's all for me. Thank you.
Speaker #2: Okay. Thanks, Mitch.
Ronald Lombardi: Okay. Thanks, Mitch.
Ronald Lombardi: Okay. Thanks, Mitch.
Operator: Thank you. Our next question comes from Yakov Moshelev with JP Morgan. Your line is open.
Operator: Thank you. Our next question comes from Yaakov Musheyev with JPMorgan. Your line is open.
Speaker #1: Thank you. Our next question comes from Yakov Mosheyev with JP Morgan, your line is open.
Speaker #4: Hi, it's actually Carla Casella. Just a question about the you talked about the charge you took for a loan. For the supplier, is that a facility that you would consider acquiring or can you give us a sense or was the supplier for a specific segment of the business?
[Analyst] (JP Morgan): Hi, it's actually Carla Casella. Just a question about the charge you took for a facility, for the loan, for the supplier. Is that a, a facility that you would consider acquiring, or can you give us a sense, or, or was the supplier for a specific segment of the business? Just any more color you can give on that would be great.
Yaakov Musheyev: Hi, it's actually Carla Casella. Just a question about the charge you took for a facility, for the loan, for the supplier. Is that a, a facility that you would consider acquiring, or can you give us a sense, or, or was the supplier for a specific segment of the business? Just any more color you can give on that would be great.
Speaker #4: Just any more color you can give on that would be great.
Speaker #2: Yeah. Good morning, Carla. It's Chris. So this particular supplier, Strategic Relationship with, came to us over almost two years ago. And said we're experiencing some financial difficulties, was a decent size of the business.
Christine Sacco: Yeah. Good morning, Carla, it's Chris. So, this particular supplier, you know, strategic relationship with, came to us over almost two years ago and said: "We're experiencing some financial difficulties," was a decent size of the business, and so, immediate plans went in place to transfer out the product. But as you know, that takes some time. So, over that period, we extended them about $8 million of financial assistance. That gave us enough time to get our product out of there. And, they were, at the time, pursuing a sale. And so, you know, when I look back, I think about the return we got on that money for saving the gross margin on those particular products. There were—it wasn't concentrated in one area.
Christine Sacco: Yeah. Good morning, Carla, it's Chris. So, this particular supplier, you know, strategic relationship with, came to us over almost two years ago and said: "We're experiencing some financial difficulties," was a decent size of the business, and so, immediate plans went in place to transfer out the product. But as you know, that takes some time. So, over that period, we extended them about $8 million of financial assistance. That gave us enough time to get our product out of there. And, they were, at the time, pursuing a sale. And so, you know, when I look back, I think about the return we got on that money for saving the gross margin on those particular products. There were—it wasn't concentrated in one area.
Speaker #2: And so immediate plans went in place to transfer out the product. But as you know, that takes some time. So over that period, we extended them about $8 million of financial assistance.
Speaker #2: enough time to get our product out of That gave us there. And they were at the time pursuing a sale. And so when I look back, I think about the return we got on that money for saving the gross margin on those particular products.
Speaker #2: There were it wasn't concentrated in one area. There were a few products a few SKUs within products and brands that were there. We transferred them all out successfully.
Christine Sacco: There were a few products, a few SKUs within products and brands, that were there. We transferred them all out successfully, and, unfortunately, they, they did not complete a sale during that time, and, they shut down in December. So a highly unusual, specific situation, but kind of an example of how we work with all of our suppliers and our focus is on continuity of supply, and I think we were successful in that.
Christine Sacco: There were a few products, a few SKUs within products and brands, that were there. We transferred them all out successfully, and, unfortunately, they, they did not complete a sale during that time, and, they shut down in December. So a highly unusual, specific situation, but kind of an example of how we work with all of our suppliers and our focus is on continuity of supply, and I think we were successful in that.
Speaker #2: And unfortunately, they did not complete a sale during that time. And they shut down in December. So highly unusual specific situation. But kind of an example of how we work with all of our suppliers and our focus is on continuity of supply.
Speaker #2: And I think we were successful in that.
Ronald Lombardi: And, Carla, very different than the Pillar Five example. This was a liquid mix and fill facility, and there's plenty of competitive liquid mix and fill capacity available, that we were able to move our products to, including one moving one product to Lynchburg, our Debrox earwax removal product. We evaluated it and said, "Hey, this liquid mix and fill product would be a great candidate to move into Lynchburg." So we even moved one of the products there. So very different than sterile eye care, whereas we scanned the supply chain landscape, there wasn't available capacity. So two very different outcomes, one where it was a strategic advantage to us going forward with Pillar Five, an example of taking advantage of capacity available out there.
Ronald Lombardi: And, Carla, very different than the Pillar Five example. This was a liquid mix and fill facility, and there's plenty of competitive liquid mix and fill capacity available, that we were able to move our products to, including one moving one product to Lynchburg, our Debrox earwax removal product. We evaluated it and said, "Hey, this liquid mix and fill product would be a great candidate to move into Lynchburg." So we even moved one of the products there. So very different than sterile eye care, whereas we scanned the supply chain landscape, there wasn't available capacity. So two very different outcomes, one where it was a strategic advantage to us going forward with Pillar Five, an example of taking advantage of capacity available out there.
Speaker #3: very different than the pillar five example. This was a liquid mix and fill facility. And there's plenty of competitive liquid mix and fill capacity available that we were able to move our products to, Lynchburg.
Speaker #3: Our including one moving one product to Debrox earwax removal product, we evaluated it and said, "Hey, this liquid mix and fill product would be a great candidate to move into Lynchburg." So we even moved one of the products there.
Speaker #3: than sterile eye care where as we scanned the supply chain So very different landscape, there wasn't available capacity. So two very different outcomes. One where it was strategically advantage an advantage to us going forward with pillar of capacity five and example of taking advantage available out
Speaker #3: there. Okay.
[Analyst] (JP Morgan): Okay, great. And then as you look to future M&A, are you mostly focused on brands, or could some of it be vertical or, you know, facility related?
Yaakov Musheyev: Okay, great. And then as you look to future M&A, are you mostly focused on brands, or could some of it be vertical or, you know, facility related?
Speaker #4: Great. And then as you look to future M&A, are you mostly focused on brands or could some of it be vertical or
Ronald Lombardi: It's gonna be focused on brands and long-term brand building value.
Speaker #2: It's going to be focused on
Ronald Lombardi: It's gonna be focused on brands and long-term brand building value.
Speaker #2: brands and long-term brand building value. facility-related?
Speaker #4: Okay. Great. Thank
[Analyst] (JP Morgan): Okay. Great. Thank you.
Yaakov Musheyev: Okay. Great. Thank you.
Speaker #2: Thank you,
Ronald Lombardi: Thank you, Carla.
Ronald Lombardi: Thank you, Carla.
Speaker #2: Carla.
Speaker #1: Thank you. you. concludes the question and answer session. Oh, now I'd like to turn the call back closing
Operator: Thank you. This concludes the question and answer session. I would now like to turn the call back over to Ron Lombardi for closing remarks.
Operator: Thank you. This concludes the question and answer session. I would now like to turn the call back over to Ron Lombardi for closing remarks.
Speaker #1: over to Ron Lombardi for
Speaker #3: Thank you, operator. And
Ronald Lombardi: Thank you, operator, and thanks to everyone for joining us today, and we look forward to providing another update on our May call. Thank you. Have a good day.
Ronald Lombardi: Thank you, operator, and thanks to everyone for joining us today, and we look forward to providing another update on our May call. Thank you. Have a good day.
Speaker #3: thanks to everyone for joining us remarks. today. And we look forward to providing you. Have a good day.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker #1: This concludes today's conference
Speaker #1: call. Thank you for participating. You another update on our May call. may now
