Q: That inflection point in free cash flow, looks to be a quarter away still. I don’t mind holding for another year, but just want to be sure those earnings don’t concern you as much as the market, given down over $4 today.
5i Research Answer:
PBH did miss earnings estimates (beating on revenue) and did cut its EBITDA guidance for the year. But the reduction was very minor, and looks entirely due to beef inflation. Volumes and sales were very strong overall. Margins and free cash flow are still expected to increase nicely in the next few quarters. A small price decline is likely appropriate with the results, but we do not think the long term outlook has been impacted here.