Prestige Brands Holding posts Q3 1 percent net revenue gain

IRVINGTON, N.Y. Prestige Brands Holdings on Thursday posted net revenues of $88.1 million for its second quarter ended Sept. 30, up 1 percent, primarily from increases in Cleary Eyes and Little Remedies brands in the over-the-counter sector, the company reported and the introduction of two products—Chloraseptic Allergen Block and Little Allergies Allergen Block.

Little Remedies grew 37 percent in the quarter, Mark Pettie, Prestige chairman and chief executive officer, told analysts during a conference call. The growth can be attributed the introduction of Little Noses Saline Mist, which delivers nonmedicated pediatric cough-cold relief in a new form, he said. “This product supplements our existing nasal spray business and is providing considerable incremental growth in the expanding pediatrics saline segment.”

Little Remedies also has benefited from dual placement in one of Prestige’s major drug customers. “Early returns on this program indicate strong incrementality for this customer and we expect continued success will make for a compelling selling story with other customers,” Pettie said.

Also helping to drive growth for Little Remedies was last month’s industrywide voluntary label change of children’s medicines marketed for use in children under age 4. “This change has allowed us to get our two voluntarily withdrawn SKUs reinstated in a number of accounts. But it came too late to influence the seasonal cough-cold resets in the majority of our customers. As a result, there will be a modest benefit to Little Remedies in fiscal ’09, but broad reinstatement will not be possible until the fiscal year ’10 cough-cold season,” Pettie said.

Pettie also noted that the company’s wart remover category continues to be down, slightly. “The cryogenic of the wart remover category took a rather steep price reduction as our fiscal year and the summer wart season began,” Pettie explained. “During our fiscal first quarter the Compound W Freeze Off business in particular was significantly depressed by the fact that our new, lower-priced eight application products did not get into certain retailer’s sets until late in the quarter, with some of that transition carrying into Q2. … We [had] projected that in the second quarter, wart care revenues would continue to be down versus one year ago due to the significant cryogenic segment price declines but that we would see meaningfully improved performance relative to Q1. That has proven to be the case, as the pricing came into line and we restored advertising support to Compound W.”

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