HG & HY Consumer Checkup: Messi on a Million Backs, Messi for a Million Flashbulbs. One Kick of the Football.

Research evidence excerpt

HG & HY Consumer Checkup: Messi on a Million Backs, Messi for a Million Flashbulbs. One Kick of the Football.

Yaakov Musheyev AC North America Credit Research

(1-212) 834 5865 10 July 2026 J P M O R G A N

yaakov.a.musheyev@jpmorgan.com

to wait for management’s detailed offset plan and at least one more earnings print before

pulling the trigger on a downgrade back to HY. The CreditWatch placement on top of the

downgrade feels like double-counting the same risk.

• Estee Lauder (EL) approved its revised restructuring program, with cumulative

charges now expected to be ~$1.75bn. The charges are well above the original $500-

700mn estimate from Feb‘24 and the $1.5-1.7B revised range disclosed in May ‘26. The

program focuses on go-to-market reorganization, digital infrastructure modernization,

and corporate function rightsizing, with employee-related costs comprising $1.05bn of

the $1.31bn in restructuring charges. All initiatives are expected to be substantially

completed by the end of FY27, funded from operating cash flow.

• Prestige Consumer Healthcare (PBH) came to market to refinance its existing notes.

It issued $400mn 6.250% notes due ‘34 to redeem all $400mn of its existing 5.125% notes

due ‘28.

• Somnigroup (SGI) outlook was raised to Stable from Negative by Fitch (BB+

affirmed). Fitch cited material deleveraging since the Mattress Firm acquisition, with

~$500M of debt repaid and EBITDAR leverage improving to 3.4x as of 1Q26 from ~3.8x

at the February 2025 close. The Mattress Firm deal increased direct retail to ~65% of

sales, synergy capture is running ahead of plan ($80M realized in 2025, $235M net run

rate target by 2027), and the pending all-stock Leggett & Platt (LEG) acquisition is gross

leverage neutral.