Helen of Troy, parent company of a wide range of brands including Osprey Packs, Hydro Flask and OXO, reported sales in its home and outdoor segment dipped in the quarter ended Aug. 31 on lower brick-and-mortar sales in the insulated beverage category.
The company said that decline was offset somewhat by stronger consumer demand for travel-related products in the home and outdoor segment, including the launch of the new Hydro Flask travel tumbler.
Net sales in the home and outdoor division decreased 0.2% to $240 million during the quarter.
Home and outdoor operating income was $36.1 million, or 15% of segment net sales revenue, compared to $42.1 million, or 17.5% of segment net sales revenue in the same quarter last year.
Overall, Helen of Troy’s Q2 earnings and sales company-wide were higher than anticipated. Consolidated net sales revenue was $491.6 million, a decrease of 5.7%, but better than analysts’ estimate of $485.5 million.
Helen of Troy Q2
Gross profit margin improved 420 basis points to 46.7% for the quarter.
“During the quarter we delivered net sales and adjusted EPS at the high end of our expectations,” said Julien R. Mininberg, chief executive officer for Helen of Troy, in a release. “I’m pleased with the consistency of our results as we work toward returning to growth. During the quarter we achieved our revenue expectations for the majority of our leadership brands and international performance was particularly strong.”
Mininberg pointed out that Helen of Troy is supporting product launches and significantly increasing its gross margin as it returns value to shareholders through share repurchase.
“Our initiatives to streamline our inventory and improve free cash flow continue to deliver big results, with inventory down over $200 million in the first half of this fiscal year versus the same period last year, and free cash flow improvement of $325 million during that same comparison period,” Mininberg added.
The company also announced Brian Grass, who stepped in as interim CFO when Matt Osberg resigned in March, will take on the role permanently.
“We conducted a national search, and I concluded Brian is the ideal choice to partner with me now and when I assume the CEO position next fiscal year,” said Noel Geoffroy, chief operating officer, Helen of Troy. “He is a strategic business leader, a collaborative thought partner, and a proven public company CFO with an extraordinary record of delivering results and creating value throughout his career.”
Fiscal 2024 Outlook
Helen of Troy expects consolidated net sales revenue in the range of $1.965 billion to $2.015 billion, which implies a decline of 5.2% to 2.8%.
For home and outdoor, net sales are forecast to range from a decline of 1.7% to growth of 1%.
The company’s sales outlook reflects what it believes will be a continued slower economy and further pressure and uncertainty on consumer spending levels and patterns, especially for some discretionary categories.
Helen of Troy continues to see retailers align their inventory purchases to match their current expectations of consumer spending.
The company has seen some reduction of trade inventory on a sequential basis as many key retailers have lowered their inventory levels and Helen of Troy continues to expect that sell-in will more closely match sell-through in fiscal 2024.
“Looking ahead, I am pleased to be in a position to reiterate our full-year outlook for this fiscal year,” Mininberg said. “Our year-to-date results not only demonstrate strong execution across our entire organization, they also demonstrate resiliency as we navigate the continued challenging macro consumer environment.”