Consolidated Net Sales Decline of 12.2%
GAAP Diluted EPS of $0.26; Adjusted Diluted EPS of $0.99
Gross Profit Margin Expansion of 330 Basis Points
Cash Flow from Operations of $25.3 Million; Free Cash Flow(1)(2)
of $16.2 Million
Updates Fiscal 2025
Outlook: Lowers Consolidated Net Sales to
$1.885-$1.935 Billion Lowers GAAP Diluted EPS to $4.69-$5.45
and Adjusted Diluted EPS to $7.00-$7.50 Lowers Adjusted
EBITDA to $287-$297 Million and Free Cash Flow(1)(2) to $220-$240
Million Updates Net Leverage Ratio(1)(3) Reduction to
Between 1.6X and 1.5X by the End of Fiscal 2025 Project
Pegasus on Track to Deliver Savings of $26 Million to $30
Million
Helen of Troy Limited (NASDAQ: HELE), designer,
developer, and worldwide marketer of branded consumer home,
outdoor, beauty, and wellness products, today reported results for
the three-month period ended May 31, 2024.
Executive Summary – First Quarter of
Fiscal 2025 Compared to Fiscal 2024
- Consolidated net sales revenue of $416.8 million, a decrease of
12.2%
- Gross profit margin improvement of 330 basis points to 48.7%
compared to 45.4%
- Operating margin of 7.4% compared to 8.6%
- Non-GAAP adjusted operating margin of 10.3% compared to
13.9%
- GAAP diluted EPS of $0.26 compared to $0.94
- Non-GAAP adjusted diluted EPS of $0.99 compared to $1.94
- Net cash provided by operating activities of $25.3 million
compared to $121.1 million
- Non-GAAP adjusted EBITDA margin of 12.6% compared to 15.2%
- Repurchased 1,011,243 shares of common stock in the open market
during the quarter for $100 million
Noel M. Geoffroy, Chief Executive Officer, stated: “We are
disappointed with the start to our fiscal year. We battled an
unusual number of internal and external challenges in the quarter,
which resulted in net sales and adjusted EPS below our outlook.
Many of these challenges became more pronounced toward the end of
the first quarter and some continue to evolve. We now see this
fiscal year as a time to take action to reset and revitalize our
business. As a result, we are lowering our annual outlook, which
delays the delivery of the long-term financial algorithm in our
strategic plan.”
“Despite the challenges we currently face, I remain confident
the strategies we are implementing are the right ones to improve
the long-term health of our brands, return our Company to positive
sales and earnings growth, and deliver sustained shareholder value
creation. Project Pegasus continues to provide us with fuel to fund
our initiatives and organizational focus to capture opportunities
and leverage our scale. We also invested in new talent and
next-level data, analytics and capabilities to improve our
effectiveness and productivity across the enterprise. As always, we
believe that our success will be driven by the passion and
dedication of our exceptional people who remain committed to our
purpose, vision, values, and the actions we are taking.”
Three Months Ended May
31,
(in thousands) (unaudited)
Home & Outdoor
Beauty & Wellness
Total
Fiscal 2024 sales revenue, net
$
217,144
$
257,528
$
474,672
Organic business (4)
(18,654
)
(39,528
)
(58,182
)
Impact of foreign currency
(31
)
388
357
Change in sales revenue, net
(18,685
)
(39,140
)
(57,825
)
Fiscal 2025 sales revenue, net
$
198,459
$
218,388
$
416,847
Total net sales revenue growth
(decline)
(8.6
)%
(15.2
)%
(12.2
)%
Organic business
(8.6
)%
(15.3
)%
(12.3
)%
Impact of foreign currency
—
%
0.2
%
0.1
%
Operating margin (GAAP)
Fiscal 2025
8.0
%
6.8
%
7.4
%
Fiscal 2024
10.2
%
7.2
%
8.6
%
Adjusted operating margin (non-GAAP)
(1)
Fiscal 2025
10.6
%
10.0
%
10.3
%
Fiscal 2024
15.8
%
12.4
%
13.9
%
Consolidated Results - First Quarter
Fiscal 2025 Compared to First Quarter Fiscal 2024
- Consolidated net sales revenue decreased $57.8 million, or
12.2%, to $416.8 million, compared to $474.7 million, primarily
driven by a decline in sales of hair appliances, prestige hair care
products and humidifiers in Beauty & Wellness, and a decline in
Home & Outdoor primarily due to lower replenishment orders from
retail customers and the impact of the shipping disruption at the
Company's Tennessee distribution facility due to automation startup
issues affecting some of the segment's small retail customer and
direct-to-consumer orders. These factors were partially offset by
international growth and higher sales of fans in Beauty &
Wellness.
- Consolidated gross profit margin increased 330 basis points to
48.7%, compared to 45.4%. The increase in consolidated gross profit
margin was primarily due to a favorable segment mix with a higher
percentage of Home & Outdoor sales at a higher margin,
favorable inventory obsolescence expense year-over-year, and lower
commodity and product costs driven by Project Pegasus initiatives.
These factors were partially offset by a less favorable product mix
within the segments, a less favorable customer mix within Home
& Outdoor and higher sales dilution from trade discounts,
allowances and promotional programs in Beauty & Wellness.
- Consolidated selling, general and administrative expense
(“SG&A”) ratio increased 560 basis points to 40.9%, compared to
35.3%. The increase in the consolidated SG&A ratio was
primarily due to planned higher marketing expense as the Company
reinvested back into its brands, additional costs and lost
efficiency associated with automation startup issues at the
Company's Tennessee distribution facility, higher depreciation
expense, unfavorable health insurance and product liability
expense, and the impact of unfavorable operating leverage due to
the decrease in net sales. These factors were partially offset by
the favorable comparative impact of a charge of $4.2 million
related to the bankruptcy of Bed, Bath & Beyond(5) incurred in
the prior year period and lower share-based compensation
expense.
- Consolidated operating income was $30.8 million, or 7.4% of net
sales revenue, compared to $40.6 million, or 8.6% of net sales
revenue. The 120 basis point decrease in consolidated operating
margin was primarily due to an increase in the consolidated
SG&A ratio, partially offset by consolidated gross profit
margin expansion and a decrease in restructuring charges of $5.5
million.
- Interest expense was $12.5 million, compared to $14.1 million.
The decrease in interest expense was primarily due to lower average
borrowings outstanding, partially offset by a higher average
effective interest rate compared to the same period last year.
- Income tax expense as a percentage of income before income tax
was 66.1% compared to 15.5%, primarily due to the Barbados tax
legislation enacted with immediate effect during the first quarter
of fiscal 2025, which resulted in a discrete tax charge of $6.0
million to revalue deferred tax liabilities and an increase in tax
expense from incorporating the impact of ongoing changes into the
estimated annual effective tax rate.
- Net income was $6.2 million, compared to $22.6 million. Diluted
EPS was $0.26, compared to $0.94. Diluted EPS decreased primarily
due to lower operating income and an increase in the effective
income tax rate, partially offset by a decrease in interest
expense.
- Non-GAAP adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization) was $52.4 million, compared to $72.4
million. Non-GAAP adjusted EBITDA margin was 12.6% compared to
15.2%.
On an adjusted basis (non-GAAP) for the first quarters of fiscal
2025 and 2024, excluding the discrete impact of Barbados tax
reform(6), Bed, Bath & Beyond bankruptcy(5), restructuring
charges, amortization of intangible assets, and non-cash
share-based compensation, as applicable:
- Adjusted operating income decreased $23.2 million, or 35.1%, to
$43.0 million, or 10.3% of net sales revenue, compared to $66.2
million, or 13.9% of net sales revenue. The decrease in adjusted
operating margin was primarily driven by planned higher marketing
expense as the Company reinvested back into its brands, additional
costs associated with automation startup issues at the Company's
Tennessee distribution facility, higher sales dilution from trade
discounts, allowances and promotional programs, an increase in
depreciation expense, unfavorable health insurance and product
liability expense, a less favorable product mix within the segments
and a less favorable customer mix within Home & Outdoor, and
the impact of unfavorable operating leverage due to the decrease in
net sales. These factors were partially offset by a favorable
segment mix with a higher percentage of Home & Outdoor sales at
a higher margin, favorable inventory obsolescence expense
year-over-year, and lower commodity and product costs partly driven
by Project Pegasus initiatives.
- Adjusted income decreased $23.4 million, or 50.0%, to $23.3
million, compared to $46.7 million. Adjusted diluted EPS decreased
49.0% to $0.99 compared to $1.94. The decrease in adjusted diluted
EPS was primarily due to lower adjusted operating income and an
increase in the adjusted effective income tax rate, partially
offset by a decrease in interest expense.
Segment Results - First Quarter Fiscal
2025 Compared to First Quarter Fiscal 2024
Home & Outdoor net sales revenue decreased $18.7 million, or
8.6%, to $198.5 million, compared to $217.1 million. The decrease
was driven by lower replenishment orders from retail customers,
softer consumer demand, shifts in consumer spending, a global
outdoor slowdown in packs and accessories, increased competition in
the insulated beverageware category, and the impact of the shipping
disruption at the Company's Tennessee distribution facility due to
automation startup issues affecting some of the segment's small
retail customer and direct-to-consumer orders. These factors were
partially offset by new and expanded distribution, incremental
sales from the launch of the travel tumbler, and an increase in
international sales.
Home & Outdoor operating income was $15.9 million, or 8.0%
of segment net sales revenue, compared to $22.1 million, or 10.2%
of segment net sales revenue. The decrease in segment operating
margin was primarily due to planned higher marketing expense as the
Company reinvested back into its brands, additional costs
associated with automation startup issues at the Company's
Tennessee distribution facility, an increase in depreciation
expense, the impact of unfavorable operating leverage due to the
decrease in net sales, and a less favorable customer and product
mix. These factors were partially offset by favorable inventory
obsolescence expense year-over-year, lower commodity and product
costs, and the favorable comparative impact of a charge of $3.1
million related to the bankruptcy of Bed, Bath & Beyond(5)
incurred in the prior year period. Adjusted operating income
decreased 38.5% to $21.1 million, or 10.6% of segment net sales
revenue, compared to $34.3 million, or 15.8% of segment net sales
revenue.
Beauty & Wellness net sales revenue decreased $39.1 million,
or 15.2%, to $218.4 million, compared to $257.5 million. The
decrease was primarily due to a decline in sales of hair appliances
and prestige hair care products primarily due to softer consumer
demand, shifts in consumer spending and increased competition,
shipping disruption from Curlsmith system integration challenges,
lower sales of humidifiers, primarily driven by reduced
replenishment orders from retail customers due to a softer
2023/2024 illness season, higher sales dilution from trade
discounts, allowances and promotional programs, and a decrease in
water filtration primarily driven by the expiration of an
out-license relationship. These factors were partially offset by an
increase in fan sales.
Beauty & Wellness operating income was $14.9 million, or
6.8% of segment net sales revenue, compared to $18.5 million, or
7.2% of segment net sales revenue. The decrease in segment
operating margin was primarily due to planned higher marketing
expense as the Company reinvested back into its brands, a less
favorable product mix, higher sales dilution from trade discounts,
allowances and promotional programs, and the impact of unfavorable
operating leverage due to the decrease in net sales. These factors
were partially offset by favorable inventory obsolescence expense
year-over-year, lower commodity and product costs, and a decrease
in restructuring charges of $3.2 million. Adjusted operating income
decreased 31.4% to $21.9 million, or 10.0% of segment net sales
revenue, compared to $31.9 million, or 12.4% of segment net sales
revenue.
Balance Sheet and Cash Flow - First
Quarter Fiscal 2025 Compared to First Quarter Fiscal
2024
- Cash and cash equivalents totaled $16.1 million, compared to
$38.9 million.
- Accounts receivable turnover(7) was 67.4 days, compared to 67.5
days.
- Inventory was $444.7 million, compared to $433.9 million.
- Total short- and long-term debt was $748.4 million, compared to
$837.2 million.
- Net cash provided by operating activities for the first three
months of the fiscal year was $25.3 million, compared to $121.1
million for the same period last year.
- Free cash flow(1)(2) for the first three months of the fiscal
year was $16.2 million, compared to $109.2 million for the same
period last year.
Pegasus Restructuring
Plan
The Company previously announced a global restructuring plan
intended to expand operating margins through initiatives designed
to improve efficiency and effectiveness and reduce costs
(collectively referred to as “Project Pegasus”). Project Pegasus
includes multiple workstreams to further optimize the Company's
brand portfolio, streamline and simplify the organization,
accelerate and amplify cost of goods savings projects, enhance the
efficiency of its supply chain network, optimize its indirect
spending and improve its cash flow and working capital, as well as
other activities. The Company anticipates these initiatives will
create operating efficiencies, as well as provide a platform to
fund future growth investments.
As previously disclosed, the Company continues to have the
following expectations regarding Project Pegasus charges:
- Total one-time pre-tax restructuring charges of approximately
$50 million to $55 million over the duration of the plan, expected
to be completed during fiscal 2025.
- Pre-tax restructuring charges to be comprised of approximately
$15 million to $19 million of severance and employee related costs,
$28 million of professional fees, $3 million to $4 million of
contract termination costs, and $4 million of other exit and
disposal costs.
- All of the Company's operating segments and shared services
will be impacted by the plan and pre-tax restructuring charges
include approximately $16 million to $17 million in Home &
Outdoor and $34 million to $38 million in Beauty &
Wellness.
- Pre-tax restructuring charges represent primarily cash
expenditures, which are expected to be substantially paid by the
end of fiscal 2025.
The Company also continues to have the following expectations
regarding Project Pegasus savings:
- Targeted annualized pre-tax operating profit improvements of
approximately $75 million to $85 million, which began in fiscal
2024 and are expected to be substantially achieved by the end of
fiscal 2027.
- Estimated cadence of the recognition of the savings will be
approximately 25% in fiscal 2024, which was achieved, approximately
35% in fiscal 2025, approximately 25% in fiscal 2026 and
approximately 15% in fiscal 2027.
- Total profit improvements to be realized approximately 60%
through reduced cost of goods sold and 40% through lower
SG&A.
Fiscal 2025 Annual
Outlook
The Company now expects consolidated net sales revenue in the
range of $1.885 billion to $1.935 billion, which implies a decline
of 6.0% to 3.5%, compared to the previous range of a decline of
2.0% to growth of 1.0%. The sales outlook continues to reflect the
Company's view of lingering inflation and further consumer spending
softness, especially in certain discretionary categories. The sales
outlook now reflects the expected impact of executional challenges
in the Company's Tennessee distribution facility, as well as its
view of increased macro uncertainty, an increasingly stretched
consumer, a more promotional environment, and retailers even more
closely managing their inventory levels.
The Company's fiscal year net sales outlook now reflects the
following expectations by segment:
- Home & Outdoor net sales decline of 3.0% to 1.0%, which
includes the expectation of continued shipping disruption in the
Company's Tennessee distribution facility through the second
quarter of fiscal 2025, compared to the prior expectation of growth
of 1.0% to 4.0%; and
- Beauty & Wellness net sales decline of 8.0% to 5.0%,
compared to the prior expectation of a decline of 4.5% to 1.5%,
both of which include a year-over-year headwind of approximately
1.0% related to the expiration of an out-license relationship in
Wellness.
The Company now expects GAAP diluted EPS of $4.69 to $5.45,
compared to the previous range of $6.68 to $7.45, and non-GAAP
adjusted diluted EPS in the range of $7.00 to $7.50, which implies
an adjusted diluted EPS decline of 21.4% to 15.8%, compared to the
previous range of $8.70 to $9.20.
The Company now expects adjusted EBITDA of $287 million to $297
million, compared to the previous range of $324 million to $331
million, which implies a decline of 14.6% to 11.8%, as benefits
from Project Pegasus are reinvested for growth. The Company's
outlook continues to reflect a year-over-year increase in growth
investment spending of approximately 100 basis points and a
year-over-year headwind of approximately 50 basis points from the
expiration of an out-license relationship in Wellness. The
Company's outlook now includes expected margin compression of
approximately 60 basis points from incremental operating expense
and lost efficiency related to automation startup issues at its
Tennessee distribution facility, and margin compression from its
view of a more promotional environment, a less favorable mix, and
lower operating leverage due to the decline in revenue. The Company
expects these factors to be partially offset by profit improvement
actions implemented in the second quarter.
The Company now expects free cash flow(1)(2) in the range of
$220 million to $240 million, compared to the previous range of
$255 million to $275 million, and now expects its net leverage
ratio(1)(3), as defined in its credit agreement, to end fiscal 2025
at 1.60x to 1.50x, compared to the previous range of 1.25x to
1.00x.
In terms of the quarterly cadence of sales, the Company now
expects a decline in net sales of approximately 7% to 4% in the
second quarter of fiscal 2025 and a decline of 2.5% to growth of 1%
in the second half of fiscal 2025. The Company now expects a
decline in adjusted diluted EPS of approximately 45% to 35% in the
second quarter of fiscal 2025 and a decline of approximately 3% to
growth of 3% in the second half of fiscal 2025.
The Company's consolidated net sales and EPS outlook also
reflects the following assumptions:
- the severity of the cough/cold/flu season will be in line with
pre-COVID historical averages;
- June 2024 foreign currency exchange rates will remain constant
for the remainder of the fiscal year;
- expected interest expense in the range of $44.0 million to
$46.0 million;
- a reported GAAP effective tax rate range of 27.3% to 29.5% for
the full fiscal year 2025 and an adjusted effective tax rate range
of 20.7% to 21.3%; and
- an estimated weighted average diluted shares outstanding of
23.1 million for the full year.
The likelihood, timing and potential impact of a significant or
prolonged recession, any fiscal 2025 acquisitions and divestitures,
future asset impairment charges, future foreign currency
fluctuations, additional interest rate increases, or share
repurchases are unknown and cannot be reasonably estimated;
therefore, they are not included in the Company's outlook.
Conference Call and
Webcast
The Company will conduct a teleconference in conjunction with
today's earnings release. The teleconference begins at 9:00 a.m.
Eastern Time today, Tuesday, July 9, 2024. Institutional investors
and analysts interested in participating in the call are invited to
dial (877) 407-3982 approximately ten minutes prior to the start of
the call. The conference call will also be webcast live on the
Events & Presentations page at:
http://investor.helenoftroy.com/. A telephone replay of this call
will be available at 1:00 p.m. Eastern Time on July 9, 2024, until
11:59 p.m. Eastern Time on July 23, 2024, and can be accessed by
dialing (844) 512-2921 and entering replay pin number 13747234. A
replay of the webcast will remain available on the website for one
year.
Non-GAAP Financial
Measures
The Company reports and discusses its operating results using
financial measures consistent with accounting principles generally
accepted in the United States of America (“GAAP”). To supplement
its presentation, the Company discloses certain financial measures
that may be considered non-GAAP such as Adjusted Operating Income,
Adjusted Operating Margin, Adjusted Effective Tax Rate, Adjusted
Income, Adjusted Diluted Earnings per Share (“EPS”), EBITDA,
Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Net
Leverage Ratio, which are presented in accompanying tables to this
press release along with a reconciliation of these financial
measures to their corresponding GAAP-based financial measures
presented in the Company's condensed consolidated statements of
income and cash flows. For additional information see Note 1 to the
accompanying tables to this press release.
About Helen of Troy
Limited
Helen of Troy Limited (NASDAQ: HELE) is a leading global
consumer products company offering creative products and solutions
for its customers through a diversified portfolio of
well-recognized and widely-trusted brands, including OXO, Hydro
Flask, Osprey, Vicks, Braun, Honeywell, PUR, Hot Tools, Drybar,
Curlsmith and Revlon. All trademarks herein belong to Helen of Troy
Limited (or its subsidiaries) and/or are used under license from
their respective licensors.
For more information about Helen of Troy, please visit
http://investor.helenoftroy.com
Forward-Looking Statements
Certain written and oral statements made by the Company and
subsidiaries of the Company may constitute “forward-looking
statements” as defined under the Private Securities Litigation
Reform Act of 1995. This includes statements made in this press
release, in other filings with the SEC, and in certain other oral
and written presentations. Generally, the words “anticipates”,
“assumes”, “believes”, “expects”, “plans”, “may”, “will”, “might”,
“would”, “should”, “seeks”, “estimates”, “project”, “predict”,
“potential”, “currently”, “continue”, “intends”, “outlook”,
“forecasts”, “targets”, “reflects”, “could”, and other similar
words identify forward-looking statements. All statements that
address operating results, events or developments that the Company
expects or anticipates may occur in the future, including
statements related to sales, expenses, EPS results, and statements
expressing general expectations about future operating results, are
forward-looking statements and are based upon its current
expectations and various assumptions. The Company believes there is
a reasonable basis for these expectations and assumptions, but
there can be no assurance that the Company will realize these
expectations or that these assumptions will prove correct.
Forward-looking statements are only as of the date they are made
and are subject to risks that could cause them to differ materially
from actual results. Accordingly, the Company cautions readers not
to place undue reliance on forward-looking statements. The
forward-looking statements contained in this press release should
be read in conjunction with, and are subject to and qualified by,
the risks described in the Company's Form 10-K for the year ended
February 29, 2024, and in the Company's other filings with the SEC.
Investors are urged to refer to the risk factors referred to above
for a description of these risks. Such risks include, among others,
the geographic concentration of certain United States (“U.S.”)
distribution facilities which increases its risk to disruptions
that could affect the Company's ability to deliver products in a
timely manner, the occurrence of cyber incidents or failure by the
Company or its third-party service providers to maintain
cybersecurity and the integrity of confidential internal or
customer data, a cybersecurity breach, obsolescence or
interruptions in the operation of the Company's central global
Enterprise Resource Planning systems and other peripheral
information systems, the Company's ability to develop and introduce
a continuing stream of innovative new products to meet changing
consumer preferences, actions taken by large customers that may
adversely affect the Company's gross profit and operating results,
the Company's dependence on sales to several large customers and
the risks associated with any loss of, or substantial decline in,
sales to top customers, the Company's dependence on third-party
manufacturers, most of which are located in Asia, and any inability
to obtain products from such manufacturers, the Company's ability
to deliver products to its customers in a timely manner and
according to their fulfillment standards, the risks associated with
trade barriers, exchange controls, expropriations, and other risks
associated with domestic and foreign operations including
uncertainty and business interruptions resulting from political
changes and events in the U.S. and abroad, and volatility in the
global credit and financial markets and economy, the Company's
dependence on the strength of retail economies and vulnerabilities
to any prolonged economic downturn, including a downturn from the
effects of macroeconomic conditions, any public health crises or
similar conditions, risks associated with weather conditions, the
duration and severity of the cold and flu season and other related
factors, the Company's reliance on its Chief Executive Officer and
a limited number of other key senior officers to operate its
business, risks associated with the use of licensed trademarks from
or to third parties, the Company's ability to execute and realize
expected synergies from strategic business initiatives such as
acquisitions, divestitures and global restructuring plans,
including Project Pegasus, the risks of potential changes in laws
and regulations, including environmental, employment and health and
safety and tax laws, and the costs and complexities of compliance
with such laws, the risks associated with increased focus and
expectations on climate change and other environmental, social and
governance matters, the risks associated with significant changes
in or the Company's compliance with regulations, interpretations or
product certification requirements, the risks associated with
global legal developments regarding privacy and data security that
could result in changes to its business practices, penalties,
increased cost of operations, or otherwise harm the business, the
risks of significant tariffs or other restrictions being placed on
imports from China, Mexico or Vietnam or any retaliatory trade
measures taken by China, Mexico or Vietnam, the Company's
dependence on whether it is classified as a “controlled foreign
corporation” for U.S. federal income tax purposes which impacts the
tax treatment of its non-U.S. income, the risks associated with
legislation enacted in Bermuda and Barbados in response to the
European Union's review of harmful tax competition, the risks
associated with accounting for tax positions and the resolution of
tax disputes, the risks associated with product recalls, product
liability and other claims against the Company, and associated
financial risks including but not limited to, increased costs of
raw materials, energy and transportation, significant impairment of
the Company's goodwill, indefinite-lived and definite-lived
intangible assets or other long-lived assets, risks associated with
foreign currency exchange rate fluctuations, the risks to the
Company's liquidity or cost of capital which may be materially
adversely affected by constraints or changes in the capital and
credit markets, interest rates and limitations under its financing
arrangements, and projections of product demand, sales and net
income, which are highly subjective in nature, and from which
future sales and net income could vary by a material amount. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements as a result of new information, future
events or otherwise.
HELEN OF
TROY LIMITED AND SUBSIDIARIES Condensed Consolidated
Statements of Income (Unaudited) (in thousands, except per
share data)
Three Months Ended May
31,
2024
2023
Sales revenue, net
$
416,847
100.0
%
$
474,672
100.0
%
Cost of goods sold
213,768
51.3
%
259,041
54.6
%
Gross profit
203,079
48.7
%
215,631
45.4
%
Selling, general and administrative
expense (“SG&A”)
170,481
40.9
%
167,635
35.3
%
Restructuring charges
1,835
0.4
%
7,355
1.5
%
Operating income
30,763
7.4
%
40,641
8.6
%
Non-operating income, net
100
—
%
137
—
%
Interest expense
12,543
3.0
%
14,052
3.0
%
Income before income tax
18,320
4.4
%
26,726
5.6
%
Income tax expense
12,116
2.9
%
4,145
0.9
%
Net income
$
6,204
1.5
%
$
22,581
4.8
%
Diluted earnings per share (“EPS”)
$
0.26
$
0.94
Weighted average shares of common stock
used in computing diluted EPS
23,633
24,134
Consolidated Net Sales by
Geographic Region (Unaudited) (in thousands)
Three Months Ended May
31,
2024
2023
Domestic sales revenue, net (11)
$
300,680
72.1
%
$
359,559
75.7
%
International sales revenue, net
116,167
27.9
%
115,113
24.3
%
Total sales revenue, net
$
416,847
100.0
%
$
474,672
100.0
%
Reconciliation of Non-GAAP
Financial Measures – GAAP Operating Income and Operating Margin to
Adjusted Operating Income and Adjusted Operating Margin (Non-GAAP)
(1) (Unaudited) (in thousands)
Three Months Ended May 31,
2024
Home &
Outdoor
Beauty &
Wellness
Total
Operating income, as reported (GAAP)
$
15,850
8.0
%
$
14,913
6.8
%
$
30,763
7.4
%
Restructuring charges
440
0.2
%
1,395
0.6
%
1,835
0.4
%
Subtotal
16,290
8.2
%
16,308
7.5
%
32,598
7.8
%
Amortization of intangible assets
1,765
0.9
%
2,755
1.3
%
4,520
1.1
%
Non-cash share-based compensation
3,013
1.5
%
2,820
1.3
%
5,833
1.4
%
Adjusted operating income (non-GAAP)
$
21,068
10.6
%
$
21,883
10.0
%
$
42,951
10.3
%
Three Months Ended May 31,
2023
Home &
Outdoor
Beauty &
Wellness
Total
Operating income, as reported (GAAP)
$
22,116
10.2
%
$
18,525
7.2
%
$
40,641
8.6
%
Bed, Bath & Beyond bankruptcy (5)
3,087
1.4
%
1,126
0.4
%
4,213
0.9
%
Restructuring charges
2,790
1.3
%
4,565
1.8
%
7,355
1.5
%
Subtotal
27,993
12.9
%
24,216
9.4
%
52,209
11.0
%
Amortization of intangible assets
1,777
0.8
%
2,880
1.1
%
4,657
1.0
%
Non-cash share-based compensation
4,498
2.1
%
4,799
1.9
%
9,297
2.0
%
Adjusted operating income (non-GAAP)
$
34,268
15.8
%
$
31,895
12.4
%
$
66,163
13.9
%
Reconciliation of Non-GAAP
Financial Measures – GAAP Operating Income to EBITDA
(Earnings Before Interest, Taxes, Depreciation and
Amortization), Adjusted EBITDA and Adjusted EBITDA Margin
(Non-GAAP) (1) (Unaudited) (in thousands)
Three Months Ended May 31,
2024
Home &
Outdoor
Beauty &
Wellness
Total
Operating income, as reported (GAAP)
$
15,850
8.0
%
$
14,913
6.8
%
$
30,763
7.4
%
Depreciation and amortization
6,647
3.3
%
7,189
3.3
%
13,836
3.3
%
Non-operating income, net
—
—
%
100
—
%
100
—
%
EBITDA (non-GAAP)
22,497
11.3
%
22,202
10.2
%
44,699
10.7
%
Add: Restructuring charges
440
0.2
%
1,395
0.6
%
1,835
0.4
%
Non-cash share-based compensation
3,013
1.5
%
2,820
1.3
%
5,833
1.4
%
Adjusted EBITDA (non-GAAP)
$
25,950
13.1
%
$
26,417
12.1
%
$
52,367
12.6
%
Three Months Ended May 31,
2023
Home &
Outdoor
Beauty &
Wellness
Total
Operating income, as reported (GAAP)
$
22,116
10.2
%
$
18,525
7.2
%
$
40,641
8.6
%
Depreciation and amortization
4,402
2.0
%
6,313
2.5
%
10,715
2.3
%
Non-operating income, net
—
—
%
137
0.1
%
137
—
%
EBITDA (non-GAAP)
26,518
12.2
%
24,975
9.7
%
51,493
10.8
%
Add: Bed, Bath & Beyond bankruptcy
3,087
1.4
%
1,126
0.4
%
4,213
0.9
%
Restructuring charges
2,790
1.3
%
4,565
1.8
%
7,355
1.5
%
Non-cash share-based compensation
4,498
2.1
%
4,799
1.9
%
9,297
2.0
%
Adjusted EBITDA (non-GAAP)
$
36,893
17.0
%
$
35,465
13.8
%
$
72,358
15.2
%
Reconciliation of Non-GAAP
Financial Measures – GAAP Net Income to EBITDA (Earnings
Before Interest, Taxes, Depreciation and Amortization), Adjusted
EBITDA and Adjusted EBITDA Margin (Non-GAAP) (1) (Unaudited)
(in thousands)
Three Months Ended May
31,
2024
2023
Net income, as reported (GAAP)
$
6,204
1.5
%
$
22,581
4.8
%
Interest expense
12,543
3.0
%
14,052
3.0
%
Income tax expense
12,116
2.9
%
4,145
0.9
%
Depreciation and amortization
13,836
3.3
%
10,715
2.3
%
EBITDA (non-GAAP)
44,699
10.7
%
51,493
10.8
%
Add: Bed, Bath & Beyond bankruptcy
—
—
%
4,213
0.9
%
Restructuring charges
1,835
0.4
%
7,355
1.5
%
Non-cash share-based compensation
5,833
1.4
%
9,297
2.0
%
Adjusted EBITDA (non-GAAP)
$
52,367
12.6
%
$
72,358
15.2
%
Quarterly Period Ended
Twelve Months Ended May
31, 2024
August
November
February
May
Net income, as reported (GAAP)
$
27,381
$
75,898
$
42,734
$
6,204
$
152,217
Interest expense
13,654
12,859
12,500
12,543
51,556
Income tax expense
5,958
18,350
11,995
12,116
48,419
Depreciation and amortization
13,891
12,431
14,462
13,836
54,620
EBITDA (non-GAAP)
60,884
119,538
81,691
44,699
306,812
Add: Gain on sale of distribution and
office facilities (8)
—
(34,190
)
—
—
(34,190
)
Restructuring charges
3,617
3,890
3,850
1,835
13,192
Non-cash share-based compensation
7,229
8,579
8,767
5,833
30,408
Adjusted EBITDA (non-GAAP)
$
71,730
$
97,817
$
94,308
$
52,367
$
316,222
Reconciliation of Non-GAAP
Financial Measures – GAAP Income and Diluted EPS to Adjusted
Income and Adjusted Diluted EPS (Non-GAAP) (1) (Unaudited)
(in thousands, except per share data)
Three Months Ended May 31,
2024
Income
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
18,320
$
12,116
$
6,204
$
0.78
$
0.51
$
0.26
Barbados tax reform (6)
—
(6,045
)
6,045
—
(0.26
)
0.26
Restructuring charges
1,835
165
1,670
0.08
0.01
0.07
Subtotal
20,155
6,236
13,919
0.85
0.26
0.59
Amortization of intangible assets
4,520
661
3,859
0.19
0.03
0.16
Non-cash share-based compensation
5,833
264
5,569
0.25
0.01
0.24
Adjusted (non-GAAP)
$
30,508
$
7,161
$
23,347
$
1.29
$
0.30
$
0.99
Weighted average shares of common stock
used in computing diluted EPS
23,633
Three Months Ended May 31,
2023
Income
Diluted EPS
Before Tax
Tax
Net of Tax
Before Tax
Tax
Net of Tax
As reported (GAAP)
$
26,726
$
4,145
$
22,581
$
1.11
$
0.17
$
0.94
Bed, Bath & Beyond bankruptcy
4,213
53
4,160
0.17
—
0.17
Restructuring charges
7,355
92
7,263
0.30
—
0.30
Subtotal
38,294
4,290
34,004
1.59
0.18
1.41
Amortization of intangible assets
4,657
606
4,051
0.19
0.03
0.17
Non-cash share-based compensation
9,297
641
8,656
0.39
0.03
0.36
Adjusted (non-GAAP)
$
52,248
$
5,537
$
46,711
$
2.16
$
0.23
$
1.94
Weighted average shares of common stock
used in computing diluted EPS
24,134
Selected Consolidated Balance
Sheet and Cash Flow Information (Unaudited) (in
thousands)
May 31,
2024
2023
Balance Sheet:
Cash and cash equivalents
$
16,148
$
38,869
Receivables, net
328,097
349,699
Inventory
444,749
433,913
Total assets, current
831,563
856,057
Total assets
2,820,951
2,872,828
Total liabilities, current
427,675
440,791
Total long-term liabilities
843,776
917,129
Total debt
748,377
837,157
Stockholders' equity
1,549,500
1,514,908
Three Months Ended May
31,
2024
2023
Cash Flow:
Depreciation and amortization
$
13,836
$
10,715
Net cash provided by operating
activities
25,320
121,056
Capital and intangible asset
expenditures
9,142
11,877
Net debt proceeds (repayments)
82,387
(97,563
)
Payments for repurchases of common
stock
103,035
4,446
Reconciliation of Non-GAAP
Financial Measures – GAAP Net Cash Provided by Operating Activities
to Free Cash Flow (Non-GAAP) (1) (2) (Unaudited) (in
thousands)
Three Months Ended May
31,
2024
2023
Net cash provided by operating activities
(GAAP)
$
25,320
$
121,056
Less: Capital and intangible asset
expenditures
(9,142
)
(11,877
)
Free cash flow (non-GAAP)
$
16,178
$
109,179
Reconciliation of Non-GAAP
Financial Measures – Net Leverage Ratio (Non-GAAP) (1) (3)
(Unaudited) (in thousands)
Quarterly Period Ended
Twelve Months Ended May
31, 2024
August
November
February
May
Adjusted EBITDA (non-GAAP) (9)
$
71,730
$
97,817
$
94,308
$
52,367
$
316,222
Total borrowings under the credit
agreement, as reported (GAAP)
$
754,337
Add: Outstanding letters of credit
15,555
Less: Unrestricted cash and cash
equivalents
(21,138
)
Net debt
$
748,754
Net leverage ratio (non-GAAP) (3)
2.37
Fiscal 2025 Outlook for Net
Sales Revenue (Unaudited) (in thousands)
Consolidated:
Fiscal 2024
Outlook Fiscal 2025
Net sales revenue
$
2,005,050
$
1,885,000
—
$
1,935,000
Net sales revenue decline
(6.0
)%
—
(3.5
)%
Reconciliation of Non-GAAP
Financial Measures – Fiscal 2025 Outlook for GAAP Net Income to
EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization) and Adjusted EBITDA (Non-GAAP) (1) (Unaudited)
(in thousands)
Three Months Ended May 31,
2024
Outlook for the Balance
of the Fiscal Year (Nine Months)
Outlook Fiscal 2025
Net income, as reported (GAAP)
$
6,204
$
102,208
—
$
119,735
$
108,412
—
$
125,939
Interest expense
12,543
33,457
—
31,457
46,000
—
44,000
Income tax expense
12,116
33,141
—
35,133
45,257
—
47,249
Depreciation and amortization
13,836
39,664
—
37,674
53,500
—
51,510
EBITDA (non-GAAP)
44,699
208,470
—
223,999
253,169
—
268,698
Add: Restructuring charges
1,835
7,091
—
2,091
8,926
—
3,926
Non-cash share-based compensation
5,833
19,072
—
18,043
24,905
—
23,876
Adjusted EBITDA (non-GAAP)
$
52,367
$
234,633
—
$
244,133
$
287,000
—
$
296,500
Reconciliation of Non-GAAP
Financial Measures - Fiscal 2025 Outlook for GAAP Diluted EPS to
Adjusted Diluted EPS (Non-GAAP) and GAAP Effective Tax Rate to
Adjusted Effective Tax Rate (Non-GAAP) (1) (Unaudited)
Three Months Ended May 31,
2024
Outlook for the Balance
of the Fiscal Year (Nine Months)
Outlook Fiscal
2025
Tax Rate Outlook Fiscal
2025
Diluted EPS, as reported (GAAP)
$
0.26
$
4.43
-
$
5.19
$
4.69
-
$
5.45
29.5
%
-
27.3
%
Restructuring charges
0.08
0.31
-
0.09
0.39
-
0.17
Amortization of intangible assets
0.19
0.59
-
0.57
0.78
-
0.76
Non-cash share-based compensation
0.25
0.83
-
0.78
1.08
-
1.03
Income tax effect of adjustments (10)
0.21
(0.15
)
-
(0.12
)
0.06
-
0.09
(8.2
)%
-
(6.6
)%
Adjusted diluted EPS (non-GAAP)
$
0.99
$
6.01
-
$
6.51
$
7.00
-
$
7.50
21.3
%
-
20.7
%
Reconciliation of Non-GAAP
Financial Measures – Fiscal 2025 Outlook for GAAP Net Cash Provided
by Operating Activities to Free Cash Flow (Non-GAAP) (1) (2)
(Unaudited) (in thousands)
Three Months Ended May 31,
2024
Outlook for the Balance
of the Fiscal Year (Nine Months)
Outlook Fiscal 2025
Net cash provided by operating activities
(GAAP)
$
25,320
$
229,680
—
$
244,680
$
255,000
—
$
270,000
Less: Capital and intangible asset
expenditures
(9,142
)
(25,858
)
—
(20,858
)
(35,000
)
—
(30,000
)
Free cash flow (non-GAAP)
$
16,178
$
203,822
—
$
223,822
$
220,000
—
$
240,000
HELEN OF TROY LIMITED AND SUBSIDIARIES
Notes to Press Release
(1)
This press release contains non-GAAP
financial measures. Adjusted Operating Income, Adjusted Operating
Margin, Adjusted Effective Tax Rate, Adjusted Income, Adjusted
Diluted EPS, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Free
Cash Flow and Net Leverage Ratio (“Non-GAAP Financial Measures”)
that are discussed in the accompanying press release or in the
preceding tables may be considered non-GAAP financial measures as
defined by SEC Regulation G, Rule 100. Accordingly, the Company is
providing the preceding tables that reconcile these measures to
their corresponding GAAP-based financial measures. The Company is
unable to present a quantitative reconciliation of forward-looking
expected net leverage ratio to its most directly comparable
forward-looking GAAP financial measure because such information is
not available, and management cannot reliably predict all of the
necessary components of such GAAP financial measure without
unreasonable effort or expense. In addition, the Company believes
such reconciliation would imply a degree of precision that would be
confusing or misleading to investors. The Company believes that
these Non-GAAP Financial Measures provide useful information to
management and investors regarding financial and business trends
relating to its financial condition and results of operations. The
Company believes that these Non-GAAP Financial Measures, in
combination with the Company's financial results calculated in
accordance with GAAP, provide investors with additional perspective
regarding the impact of certain charges and benefits on applicable
income, margin and earnings per share measures. The Company also
believes that these Non-GAAP Financial Measures facilitate a more
direct comparison of the Company's performance with its
competitors. The Company further believes that including the
excluded charges and benefits would not accurately reflect the
underlying performance of the Company's operations for the period
in which the charges and benefits were incurred and reflected in
the Company's GAAP financial results. The material limitation
associated with the use of the Non-GAAP Financial Measures is that
the Non-GAAP Financial Measures do not reflect the full economic
impact of the Company's activities. These Non-GAAP Financial
Measures are not prepared in accordance with GAAP, are not an
alternative to GAAP financial measures, and may be calculated
differently than non-GAAP financial measures disclosed by other
companies. Accordingly, undue reliance should not be placed on
non-GAAP financial measures.
(2)
Free cash flow represents net cash
provided by operating activities less capital and intangible asset
expenditures.
(3)
Net leverage ratio is calculated as (a)
total borrowings under the Company's credit agreement plus
outstanding letters of credit, net of unrestricted cash and cash
equivalents, including readily marketable obligations issued,
guaranteed or insured by the U.S. with maturities of two years or
less, at the end of the current period, divided by (b) Adjusted
EBITDA per the Company's credit agreement (calculated as EBITDA
plus non-cash charges and certain allowed addbacks, less certain
non-cash income, plus the pro forma effect of acquisitions and
certain pro forma run-rate cost savings for acquisitions and
dispositions, as applicable for the trailing twelve months ended as
of the current period).
(4)
Organic business refers to net sales
revenue associated with product lines or brands after the first
twelve months from the date the product line or brand is acquired,
excluding the impact that foreign currency remeasurement had on
reported net sales revenue. Net sales revenue from internally
developed brands or product lines is considered Organic business
activity.
(5)
Represents a charge for uncollectible
receivables due to the bankruptcy of Bed, Bath & Beyond (“Bed,
Bath & Beyond bankruptcy”).
(6)
Represents a discrete tax charge to
revalue existing deferred tax liabilities as a result of Barbados
enacting a domestic corporate income tax rate of 9%, effective
beginning with the Company's fiscal year 2025 (“Barbados tax
reform”).
(7)
Accounts receivable turnover uses 12 month
trailing net sales revenue. The current and four prior quarters'
ending balances of trade accounts receivable are used for the
purposes of computing the average balance component as required by
the particular measure.
(8)
Gain on the sale of distribution and
office facilities in El Paso, Texas during the third quarter of
fiscal year 2024.
(9)
See reconciliation of Adjusted EBITDA to
the most directly comparable GAAP-based financial measure (net
income) in the accompanying tables to this press release.
(10)
Income tax effect of adjustments is
inclusive of the Barbados tax reform income tax adjustment.
(11)
Domestic net sales revenue includes net
sales revenue from the U.S. and Canada.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240709661475/en/
Investor Contact: Helen of Troy Limited Anne Rakunas,
Director, External Communications (915) 225-4841 ICR, Inc. Allison
Malkin, Partner (203) 682-8200
Helen of Troy (NASDAQ:HELE)
Gráfica de Acción Histórica
De Jun 2024 a Jul 2024
Helen of Troy (NASDAQ:HELE)
Gráfica de Acción Histórica
De Jul 2023 a Jul 2024