Good morning, everyone, and thank you for joining us at Oppenheimer's 25th Annual Consumer Growth and E-commerce Conference. My name is Rupesh Parikh, and I'm the Senior Food, Grocery, and Consumer Products Analyst here at Oppenheimer. I'm happy to introduce our next presenting company, Prestige Consumer Healthcare. Joining us today are CEO Ron Lombardi and VP IR and Treasury Phil Terpolilli. Prestige sells and distributes over-the-counter healthcare products to retail outlets in the U.S., Canada, and certain international markets. Some of the more well-known brands include Dramamine, Clear Eyes, DenTek, Luden's, etc. PBH has represented a bright spot in the CPG universe. Since early 2020, PBH shares are up around 190% versus increases of just over 160% in the S&P 500 and 110% in the IWM ETF. Before we get into today's session, we'll be fireside chat, and then we'll move to audience Q&A. If you have questions, please enter them in the question panel below the video. Let's get started. Ron, before I dive into my questions, as we do every year, maybe you can kick it off by providing a quick intro to Prestige and anything else you think is important to highlight regarding PBH and the company's strategy. Sure. First, thanks, Rupesh, for hosting us today, and thanks to everyone who's joined us for this morning's discussion. Let me start with a little bit about Prestige's strategy. You know, our strategy and the way we think about creating value has largely remained unchanged over a long period of time. I've been with the company since 2010, and our focus has been looking to build out a consumer healthcare portfolio with a specific focus on leading brands that define niche categories. You know, to describe it simply, it's where can we find places to win over the long term? That's really been the basis of the strategy. Over that period of time, we've been able to build out a great portfolio of leading brands, with many of them defining the categories that they lead. I'll talk about that in a minute here. Our strategy has allowed us to, again, evolve to that consumer healthcare-focused business. We divested a household cleaning business. We divested smaller tailor brands over time and certainly have been very active in M&A. If you look across our portfolio, we've got great examples of these brands. BC and Goody's, for example, right? We sell nearly 800 million doses a year of BC and Goody's as folks look to treat headache, hangovers, and other pain occasions. Fleet is another great example where we're the number one position in helping people deal with very serious constipation instances. Dramamine's another example where if you think about motion sickness and preventing motion sickness, you know, you talk about Dramamine as that example. Great portfolio that we've been able to build out and invest behind to grow the brands and the categories. I think if you look at fiscal 2024, excuse me, fiscal 2025 that just ended here at the end of March, it's another great example of the financial performance that we can expect over time. Despite being in a bit of a turbulent period of time with inflation, the beginnings of discussions on tariffs and a change in presidents, our broad portfolio allowed us to perform well. It was another record year of sales in EPS for us that created great value. It also was another year in significant cash flow performance that resulted in the lowest level of leverage in the company's history. We ended fiscal 2025 in a great position, both in terms of brand momentum, leverage, and as we looked forward into what would be expected to be a disrupted 2026 with all that's going on these days. As we sit here today, we feel good about our business, the long-term positioning of our brands and ability to grow over the long term, and the opportunity that $1 billion worth of free cash flow will generate over the next four years. Okay, great. That's a great overview. Maybe to kick it off, we can start with the consumer. We'd love to get your thoughts on the overall consumer backdrop. Are there any changes of note from your perspective? Yeah. You know, we've been talking about potential changes in consumer shopping habits or how they think about the economy for about a year now. You know what we've talked about and what we've seen first is that consumers have begun to think about shopping in different places. At this point, that's really been the concentrated change that we've seen. Consumers are being more thoughtful. They're looking for better value for the things that they buy. We haven't necessarily seen consumers in our categories. Again, our categories are very different than the other aisles of brick and mortar or the other pages on dot com. You know they're looking for better price value proposition. That's been the big change. They're not looking to buy something different. They want to stick with those trusted consumer healthcare solutions as they think about taking care of themselves. We expect that fluidity and that kind of change to continue in our fiscal 2026. From a channel perspective, are you seeing any shifts? Yeah, again, we're seeing consumers go to what they view as better price value proposition, whether that's mass or dollar or dot com. Okay, great. And then shifting to the competitive backdrop, has anything notable changed on what you're seeing on the competitive front lately? There really hasn't been. There really hasn't been any significant new entrants or changes in offerings at retail that changes the dynamic of the many categories that we compete in. You know, this often brings up the questions about private label. Are we seeing changes in private label as consumers may get more nervous about the economic environment or the worry about what tariffs might do to pricing? Again, what we've seen over time is our spaces tend to be the last places that you look to save a little money, right? If you're taking care of your health or somebody in your family's health, you know it's the last place you look to save 50 cents. You stick with what works over time. Okay, great. Now, I'd like to quickly touch on tariffs. Can you talk about your latest expectations on the tariff front, given changes since your last report, and remind us of the levers you're pulling to mitigate the impacts? Yeah, let me let Phil start with this topic. Sure. So Rupesh, obviously, tariffs topic of the day. As of May 8, that's when we announced our earnings results. We talked about at the time expecting approximately $15 million in cost impact to fiscal 2026. And that's approximately $20 million annualized. To your point, some tariff announcements obviously have shifted since then. We're monitoring it carefully. It continues to be very fluid for everyone, and we'll provide a full update in August. The bigger picture, if you kind of step back from that, is we still view ourselves as very well positioned in this dynamic tariff environment. There are a few factors. First, the diversity of the portfolio. We've talked a lot about that, but having a wide array of products, we think, helps us. Having a largely domestic supply base. Chris talked about in the May earnings call having over 80% of our domestic sales coming from domestic CMO partners as an advantage. Third, really a portfolio of having leading brands gives us the positioning to be able to take surgical pricing if it's necessary. If we step back and think about how we mitigate any future tariffs, we're working closely with all of our suppliers to identify cost savings and closed exposures that'll result in savings to offset tariffs. Where we can't have it, we'll take that surgical pricing that I mentioned. I think bottom line is we feel good about the ability to sort of navigate the environment as best we can. Okay, great. And then with the potential for tariff-induced inflation, how should we think about pricing versus volume growth for this year? Yeah, it's a good question. We anticipate some pricing element for the year regardless. It's a combination of you have a wide range of brands and various inflationary efforts. There will be some pricing for the year regardless. That element really is variable depending on the ultimate level of tariffs and where they shake out. We do think there'll be specific pockets where there may be pricing if, again, we can't get that cost savings that we're looking for. Now, I'd like to touch on a couple of areas within your portfolio. Starting with Clear Eyes, remind us where you are at following last year's supply chain challenges for the brand and how you think about the recovery from here. Sure. So we've talked about and have all along expected the Clear Eyes supply chain recovery to be a couple of years or so. You know, changes in drug supply chain take a long time. Changes in sterile eye care products, which is what Clear Eyes sells, take an even longer period of time. You have to be thoughtful around your plans and make sure that you go through the right changes. That's the first part of it. The other part that we had talked about is we kind of expect two elements of the supply recovery. The first is to expand capacity at our existing suppliers, which is underway, as well as bring on two new suppliers to help provide a longer-term ability to expand capacity. Both of those elements are well underway. We had also talked about the outlook for this year where we expected the recovery and expansion in supply to come online in the second half of the year. We expected the first half of the year to continue to be fluid as we make the changes, as our partners make the changes to the supply chain. Do you expect your inventory and retail position to be the right spot by the end of this fiscal year, by the end of your fiscal year? Yeah, still a long ways to go till we get there to the end of March. We expect to make significant progress in recovering first in stock at shelf, and then secondly, the retailers refilling their distribution centers. The last element will be filling our warehouses to provide good service level. We will see how that rolls out, but we will be focused on, first and foremost, getting as much product at shelf as possible. Moving on to women's health. This has been an area of the portfolio that's been challenged in recent years, but you began to see some recent stabilization at the end of last year. Can you share with us how your team is thinking about the women's health category this year and what's your confidence in delivering sustainable growth going forward? Yeah. Two very different product offerings within women's health, Monistat and Summer's Eve, and two very different paths to recovery that we have talked about over the last couple of years. For Monistat, we were largely recovered early in fiscal 2025 as we made some slight adjustments to our marketing, advertising, and product distribution. Monistat was largely stabilized and thinking about long-term growth. Summer's Eve was a longer project for us. Over the course of four plus years, we did a lot of work to try to reposition the brand. Quite frankly, it did not work. Not everything you do in marketing works. This is an example of one that did not. We had worked on repositioning, getting back to the heritage of connecting with women around feminine hygiene incidents and providing them with products that they can trust to help them with odor control and confidence. In fiscal 2025, we began to see the results of the changes that we had been making. The last two quarters of fiscal 2025 saw recovery in sales, so year-over-year growth in sales for the first time in about three years, as well as growing share. We felt and continue to feel really good about the momentum that Summer's Eve brought into fiscal 2025. We've got a number of other new product launches, a whole body Deodorant that's positioned in the feminine hygiene aisle, not the Deodorant aisle, positioned consistently with the Summer's Eve offering in terms of price point and expectations around how it will perform. As we get into 2026, we continue to feel good about our women's health portfolio. Great. Shifting gears to international, a real bright spot in your portfolio in recent years. You have indicated longer-term top-line growth expectations in the mid-single digits for your international segment. Can you talk about some of the drivers behind that growth and your confidence in delivering on that target? Sure. You know, the wonderful performance that we've had in our international business really has more to do with our strategy than where it happens to be located. The concentration is in Australia and close-in regions. And Hydralyte and Fess and Zaditen are three brands that have performed very well there. And why? And it all starts with brands that define the spaces that they compete in, whether it's clinical hydration, "I'm ill and I need to rehydrate," or nasal saline solutions for cough, cold, allergy relief, and Zaditen for allergy eye relief. They all define those spaces. We've brought new products, new forms, expanded distribution, both within Australia and in adjacent regions, particularly for Hydralyte, and have a wonderful marketing group who have been great stewards for those brands and others, and a great general manager for that region that have driven the success there in those places. We can expect that that brand playbook will continue to play out over time. Our longer-term outlook and the outlook for 2026 is for growth around 5%-6% for that part of the business. Okay, great. Then shifting just to e-commerce, what are your latest priorities here? Are there key efforts we should be thinking about? Yeah. E-commerce is more of the same for us. It's been growing north of 10% for a long time. I think we were over 20% for a couple of years there. We continue to grow nicely as shoppers continue to show up in increasingly larger numbers every year to the dot-coms, not only Amazon, but our dot-com arms of our brick-and-mortar partners. We work with all of them to be successful and grow their businesses. We make investments with all of them to help support the shoppers that are showing up there. You know, I think one thing that we haven't talked a lot about in the past is the continuing expanded investment in those places, really more as a marketing element as opposed to supporting a retail sales channel. What do I mean by that? You know, years ago, a new shopper, a new user to a category might begin to get introduced to a brand maybe on TV, and then maybe it turned to linear TV. Or they went to a drug or some other retail partner that had a pharmacy and may have asked the pharmacist for some help, or they just went up and down the aisle looking for a broad assortment and turning packs. What we've seen happen is that new to a category is showing up at dot-com and getting educated by reviews, making purchase decisions based on the information that they're seeing on this dot-com arm. Our marketers are beginning to work with how to best use that aspect to connect to new to the category shoppers. That's an example of how the dot-com element is expanding as a marketing tool. That's how we're thinking about it. Lots of P's from the six P portfolio of connecting with them there. Okay, great. There's been some talk from others of retail inventory destocking during the quarter here in the U.S. How do you characterize healthier retailer inventories in the U.S. market? Yeah. You know, so we saw some retailer, it was concentrated really with one, buys ahead of or triggered by tariff talk for our quarter-ended March. And we had talked about how we expected it to come out of the first quarter. You know, at the first week of May, we were able to see six weeks, half of the first quarter worth of activity. So it was based on six weeks of fact at that point. So we saw it largely concentrated in one. We're hearing the same things out of consumer companies that you are. But as a reminder, our part of the shelf within the healthcare aisles of retailer or dot-com versus the other shelf within OTC or healthcare or the other aisles are very different. I like to use as an example, think about how many linear feet you see for tableted analgesic or cough, cold, allergy. The retailers may manage that part of the shelf very differently than our much narrower powdered analgesic or our Dramamine or our Fleet part of the shelf. We live in, by strategy, a different world that may have us see different kinds of impact. That is why you may hear us talk differently about private label trends, about retailer order or inventory trends during a particular time. It does not mean that they are not happening. It means that they are happening differently for us based on our business model. Okay. And then pharmacies' store closures, I think you guys have managed quite well through them in the recent years. I think is that the same expectation going forward based on what you know? Yeah. You know, in a lot of ways, it's in the base. The two big players have been optimizing and closing stores for a long time now. An announcement of X hundreds of stores to be closed by a particular drug retailer is just more of the same. For the changes at Rite Aid, they haven't been a big customer for us for a long period of time given their financial situation, the closing of stores. Whatever has been going on there is in the base and has been reflected in the outlook that we gave for 2026. On the innovation front, how do you feel about the innovation pipeline for this year and the coming years? Is there anything that you'd highlight or any examples of recent successes on the innovation front? Yeah. You know, first of all, over the last three years or so, every year our new product pipeline and innovation has accelerated because of the disruption we saw from 2020 through 2022-ish or so. Like a lot of consumer health consumer companies, we've been gaining momentum as we've made progress to figure out what to bring to market and launch it in line with retailer shelf replacement. We continue to feel good about it. In recent years, the Dramamine Nausea product offering has performed well. Compound W has had a number of products that have performed well. For example, the Summer's Eve whole body Deodorant launch we feel good about as a continued extension of what we're looking to do with Summer's Eve over the long term. Hydralyte has had some great new flavors come out across their tablets, powdered and ready-to-drink formulas over the last few years. I continue to feel good. It is an important element of how we think about growing the categories that we are stewards of. Okay, great. Now shifting to a few financial questions. What gives your team confidence in your longer-term 2%-3% organic sales growth target and being able to deliver 6%-8% EPS growth? Yeah, Phil. Yeah. When you step back and look at the longer-term, Rupesh, and we actually have this in the deck this morning that we posted with the conference. If you look at the last five years, we're growing our CAGRs in excess of that on the revenue and EPS slightly above it, a little bit closer to 9%. Very much aligned with that longer-term organic algorithm that you referenced. If you kind of unpack those top line and then earnings, we really have excellent components for each one. With top line, we talked about the international segment earlier, still expect that to grow 5% plus over the long term, really due to a number of factors that Ron got into. When you look at the North American business, we have a very diverse portfolio of stable and leading needs-based brands. In aggregate, we think of that portfolio as tied to population growth with categories, but we do better than those overall categories and grow them over time through really the combination of brand building that we often talk about. We just talked about innovation. We think of marketing, line extensions, and other investments behind our brands that drive that 2%-3% in aggregate for the top line. On the earnings side, we've had a long history of sort of stable profit profile over the long term. You can see in our financials, we've had this long-term largely stable EBITDA margin in the low to mid-30s. We'd expect that to be maintained over time. We really get the leverage and the ability to generate the 6%-8% EPS growth thanks to the strong free cash flow that EBITDA throws off and obviously gives us the ability for efficient capital allocation that can drive that earnings growth. We can unpack those if you want, but those are kind of the building blocks to getting to the algorithm. Okay, no, that's great. Just on gross margins, since that comes up a lot in our conversations, I think it'd be helpful if you could maybe walk through some of the key puts and takes on the gross margin line for this year. As you guys look forward, what are still the big opportunities going forward to get back to your historical gross margin levels? Sure. I think we have a guidance out there for approximately 56.5% for fiscal 2026. That is the third year in a row now of improvement on a year-over-year basis. We continue to kind of creep that gross margin back towards historical levels. We think that is a long-term initiative that we have for the line. You kind of mentioned unpack it, give us some building blocks. I think the largest effect is really almost a 1% benefit associated with cost savings that Chris talked about last year really started to come into effect in the Q4 period. That will wrap around into fiscal 2026. That is a big component of it. From there, we do obviously have some additional inflation. We talked about tariffs earlier, but the objective is to largely offset those inflation effects through a combination of cost savings and pricing. No different to the longer term. Remember, over the long term, we have those rolling cost savings efforts that we talk about and good visibility into the long-term ability to execute behind that. Our team has three-year initiatives literally by month that we go through to make sure that we're having line of sight into capturing those over time to drive that gross margin expansion. Just as a reminder to tie it back to EBITDA, we look to reinvest that higher level of gross margin if we get expansion through higher levels of A and M that can drive faster top line. That's kind of the formula that we think about with gross margin. Okay, great. And then shifting gears to capital allocation, if you can remind us of your priorities on the capital allocation front, and what do you believe is a right level of leverage for the business longer term? Sure. One of the big messages we always talk about is we'd expect to generate approximately $1 billion in free cash flow for the next four years. If you look at that in the context of our business, that's very substantial. Getting efficient capital allocation correct is really critical for our business. First and foremost, that's after marketing investments. Number one is always we got to grow the business we have and invest organically, and we're doing that. When we think of the capital allocation priorities from there, the waterfall is really unchanged to what we talked about over the last year or so. M&A continues to remain the priority. We think on a global basis, there continues to be fragmentation and opportunity in consumer healthcare. We have the ability to go out and do additional acquisitions and strengthen our portfolio and brands over time. The M&A is there, and we continue to see a consistent cadence of opportunities. That is kind of priority one. Priority two at this point would be share repurchases. We always divide that into two. The first aspect is offsetting dilution each year. We generally do that during Q1. Further and beyond that, absent M&A, we look to repurchase shares opportunistically throughout the year. You saw that back in fiscal 2025. We repurchased a little over $50 million in shares against our authorization. The final piece of it is just net debt reduction. We have worked down our debt quite a bit over the last three to five years here. We're to the point now where we have two fixed notes outstanding and no further prepayable debt and run approximately 2.4 times leverage. We built a little bit of cash on the balance sheet at the end of last year. As you look ahead to fiscal 2026, absent M&A, you can see us continue to creep that cash a little bit higher and then possibly get a little bit more aggressive on share repurchases if it makes sense. We will kind of balance those two. Generally speaking, we look at cash build rather than debt reduction just given the fixed notes. Both of them are at very attractive prices at five and an eighth and three and three quarters pricing. Okay, great. Just circling back to M&A. It sounds like you guys are still seeing consistent opportunities, but just what are you seeing from a valuation perspective? Anything different than the past? Just overall, how do you feel about the pipeline out there? Yeah. To your question before, Rupesh, about just kind of leverage and long-term thinking, and this ties to M&A too, we have a long-term objective out there to operate at less than three times leverage. When you think about us at 2.4 times today, that's not a constraining factor to M&A in any way, shape, or form. I just want to make that clarifying point. In terms of M&A overall, still see a standard cadence of opportunities. It's about finding the right one. We often say that a bad deal would be worse than no deal. Certainly we want to be strategic in our thinking and not sort of financial engineering and just doing deals to do deals. We continue to see a landscape of activity in private equity, obviously always buying and selling, families over time looking to monetize their businesses. We actually saw that in Australia. We bought a key supplier for Hydralyte there a little over a year ago because they were critical to our supply chain for that business. That family was looking to monetize. The last piece that we get asked about a lot is just some of the bigger pharmaceutical and consumer product companies. They often have tail brands or businesses that are not a core focus for them. We always look at those and do diligence and understanding what could be a potential fit for our business. A large number of our brands have actually come out of those businesses over time. The textbook example we always use is Dramamine. We purchased that from Johnson & Johnson over a decade ago now, and it has been highly successful. An example we use of long-term brand building, that was a non-core brand for that business and just a function of the size of it, but for us was a great opportunity. Those sorts of things we'll continue to look at. The last thing that we get on the M&A front is just sizing. Certainly, we'll look at things small to large and everything in between. We think of the sweet spot, though, as still kind of that $200 million-$500 million purchase price, where we'd love to, if we wave the magic wand, do that size of a deal where it's sizable and accretive to the business, but not necessarily derailing the deleveraging efforts that we've had. That's kind of the M&A landscape. Ron, anything to add? Yeah. In a lot of ways, Rupesh, the M&A environment for us hasn't changed in the 15 years or so that I've been here, which is there's all kinds of different sellers, and we see a steady flow of all kinds of things. The vast majority of them don't really line up with our criteria of looking for brands that can be well-positioned for long-term growth. The thing that has changed in the last couple of years is that there's been a lot of attention to the space as these big consumer franchises have been carved out of the big pharma, as big PE has talked a lot about made investments into this space, but it doesn't create a different competitive environment for us. The brands that we're interested in tend to be smaller than what the big players would be interested in. We are very competitive with our ability to take brands and bolt them into our existing infrastructure and have an approach to invest in them and hold them for the long term rather than having to create a thesis of how do you get in and how do you get out of the investment and make money. For all of those factors, it is more of the same. We continue to feel good about the long-term opportunity to find things that will make sense for us. Okay, great. We're getting close to time. Thanks, Ron and Phil, for joining us today. Great. Thank you, Rupesh.