Prestige bought a Clear Eyes supplier. Its supply problem remains.
New brands lifted quarterly sales, but production trouble at the acquired Pillar5 plant has cut Prestige's annual outlook. Its cash forecast shows a bigger decline before adjustments.
Prestige bought one of its Clear Eyes suppliers last December to gain more control over production. The eye-drop brand's supply problem is still big enough to pull down the company's new annual forecast.
Recent production variability at the acquired Pillar5 plant is expected to leave fewer Clear Eyes products available in the second half of fiscal 2027. Management lowered its revenue, adjusted earnings and cash-flow targets, while keeping expectations for the rest of its portfolio unchanged.
A bigger business, with a weaker outlook
Q2 revenue rose 22.7% to $336.3 million. The Breathe Right portfolio and LaCorium acquisitions supplied $65.1 million of that total. Excluding acquired sales and currency effects, revenue fell 1.6%, reflecting Clear Eyes weakness and orders that customers had brought forward into the first quarter.
The new full-year revenue range is $1.280 billion to $1.290 billion, down from $1.290 billion to $1.315 billion in August. Adjusted earnings per share are now expected at $4.48 to $4.55, compared with $4.55 to $4.65. The fiscal year ends in March 2027.
Management still expects about $190 million of annual sales from Breathe Right and LaCorium. It also expects roughly 2% organic growth across the portfolio excluding Clear Eyes. For the whole company, the organic growth forecast is now approximately flat.
Owning the plant has brought costs too
Prestige paid $109.9 million for Pillar5 in December 2025. The Canadian manufacturer was already one of Clear Eyes' suppliers. The company is investing in the site to improve capacity and reliability, but consistent production remains a goal.
The quarter included $7.1 million of facility remediation, overhead and idle-capacity costs that Prestige excluded from adjusted earnings. A further $14.4 million adjustment removed the accounting expense of selling inventory marked up when businesses were acquired.
Adjusted EPS rose to $1.13 from $1.07. Reported net income fell to $25.3 million from $42.2 million, with interest expense tripling to $30.0 million and acquisition-related and tax items also affecting the comparison.
The cash forecast fell more before adjustments
The minimum annual adjusted free-cash-flow target fell by $5 million to $265 million. Research by Ticker Byline shows that comparing the original and revised cash reconciliations produces an $8 million decline before cash-cost addbacks: expected operating cash flow fell from $277 million to $269 million, while capital spending stayed at $26 million.
The smaller headline cut reflects an increase in acquisition and other cash costs added back, from $19 million to $22 million. Before those addbacks, projected cash after capital spending is $243 million, versus $251 million previously.
Prestige has already repaid $30 million of acquisition-related term debt. Principal debt still stood at $2.11 billion in September, alongside $46.5 million of cash. Getting Clear Eyes production onto a steadier footing would support both sales and the cash available for further debt reduction.
Our Prestige company profile tracks the revised targets, completed acquisitions, cash generation and debt schedule.