UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~May 31,~~November 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __ to __

Commission File Number: 001-14669

HELEN OF TROY LIMITED

(Exact name of registrant as specified in its charter)

~~Bermuda~~ ~~74-2692550~~

~~(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)~~


Bermuda						74-2692550
(State or other jurisdiction						(I.R.S. Employer
of incorporation or organization)						Identification No.)

Clarendon House

2 Church Street

Hamilton, Bermuda

(Address of principal executive offices)

1 Helen of Troy Plaza

El Paso, Texas 79912

(~~Registrant’s~~Registrant's United States Mailing Address) (Zip Code)

(915) 225-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares, $0.10 par value per share

HELE

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

~~Large accelerated filer~~

Large accelerated filer

☒ ~~Accelerated filer~~ ☐

~~Non-accelerated filer~~ ☐ ~~Smaller reporting company~~ ☐

~~Emerging growth company~~

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of ~~July 1,~~December 29, 2021, there were ~~24,098,751~~24,137,065 common shares, $0.10 par value per share, outstanding.

Table of Contents

HELEN OF TROY LIMITED AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS


		PAGE

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	2

	Note 1 - Basis of Presentation and Related Information	78
	Note 2 - New Accounting Pronouncements	89
	Note 3 - Assets and Liabilities Held for Sale	810
	Note 4 - Accrued Expenses and Other Current Liabilities	911
	Note 5 - Share-Based Compensation Plans	911
	Note 6 - Repurchases of Common Stock	1011
	Note 7 - Restructuring Plan	1012
	Note 8 - Commitments and Contingencies	1112
	Note 9 - Long-Term Debt	1214
	Note 10 - Fair Value	1215
	Note 11 - Financial Instruments and Risk Management	1316
	Note 12 - Accumulated Other Comprehensive Income (Loss)	1719
	Note 13 - Segment Information	1719
	Note 14 - Income Taxes	1720
	Note 15 - Earnings Per Share	1821
	Note 16 - Subsequent Events	1921

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2022

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3848

Item 4.	Controls and Procedures	3848

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	3949

Item 1A.	Risk Factors	3950

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4152

Item 6.	Exhibits	4253

SIGNATURES		4354

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)


(in thousands, except shares and par value)	(in thousands, except shares and par value)	May 31, 2021		February 28, 2021		(in thousands, except shares and par value)	November 30, 2021		February 28, 2021
Assets	Assets					Assets
Assets, current:	Assets, current:					Assets, current:
Cash and cash equivalents	Cash and cash equivalents	$	37,368	$	45,120	Cash and cash equivalents	$	44,344	$	45,120
Receivables - principally trade, less allowances of $594 and $998		406,409		382,449
Receivables - principally trade, less allowances of $627 and $998						Receivables - principally trade, less allowances of $627 and $998	505,933		382,449
Inventory	Inventory	540,129		481,611		Inventory	585,811		481,611
Prepaid expenses and other current assets	Prepaid expenses and other current assets	18,584		16,170		Prepaid expenses and other current assets	23,062		16,170
Income taxes receivable	Income taxes receivable	4,938		6,720		Income taxes receivable	3,574		6,720
Assets held for sale	Assets held for sale	48,646		39,867		Assets held for sale	2,265		39,867
Total assets, current	Total assets, current	1,056,074		971,937		Total assets, current	1,164,989		971,937

Property and equipment, net of accumulated depreciation of $145,915 and $140,379		134,450		136,535
Property and equipment, net of accumulated depreciation of $157,287 and $140,379						Property and equipment, net of accumulated depreciation of $157,287 and $140,379	165,061		136,535
Goodwill	Goodwill	739,901		739,901		Goodwill	739,901		739,901
Other intangible assets, net of accumulated amortization of $154,224 and $151,240		354,642		357,264
Other intangible assets, net of accumulated amortization of $160,204 and $151,240						Other intangible assets, net of accumulated amortization of $160,204 and $151,240	349,328		357,264
Operating lease assets	Operating lease assets	31,905		32,533		Operating lease assets	30,314		32,533
Deferred tax assets, net	Deferred tax assets, net	26,431		21,748		Deferred tax assets, net	29,311		21,748
Other assets	Other assets	4,689		3,570		Other assets	8,501		3,570
Total assets	Total assets	$	2,348,092	$	2,263,488	Total assets	$	2,487,405	$	2,263,488

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity					Liabilities and Stockholders' Equity
Liabilities, current:	Liabilities, current:					Liabilities, current:
Accounts payable, principally trade	Accounts payable, principally trade	$	317,573	$	334,807	Accounts payable, principally trade	$	306,049	$	334,807
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	232,604		271,179		Accrued expenses and other current liabilities	296,362		271,179
Income taxes payable	Income taxes payable	13,917		7,022		Income taxes payable	20,727		7,022
Long-term debt, current maturities	Long-term debt, current maturities	1,884		1,884		Long-term debt, current maturities	1,884		1,884
Liabilities held for sale	Liabilities held for sale	5,757		0		Liabilities held for sale	286		—
Total liabilities, current	Total liabilities, current	571,735		614,892		Total liabilities, current	625,308		614,892

Long-term debt, excluding current maturities	Long-term debt, excluding current maturities	509,090		341,746		Long-term debt, excluding current maturities	445,584		341,746
Lease liabilities, non-current	Lease liabilities, non-current	37,788		38,352		Lease liabilities, non-current	35,595		38,352
Deferred tax liabilities, net	Deferred tax liabilities, net	6,432		5,735		Deferred tax liabilities, net	7,136		5,735
Other liabilities, non-current	Other liabilities, non-current	20,966		23,416		Other liabilities, non-current	18,824		23,416
Total liabilities	Total liabilities	1,146,011		1,024,141		Total liabilities	1,132,447		1,024,141

Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0

Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Cumulative preferred stock, non-voting, $1.00 par. Authorized 2,000,000 shares; NaN issued		0		0
Common stock, $0.10 par. Authorized 50,000,000 shares; 24,097,766 and 24,405,921 shares issued and outstanding		2,410		2,441
Cumulative preferred stock, non-voting, $1.00 par. Authorized 2,000,000 shares; none issued						Cumulative preferred stock, non-voting, $1.00 par. Authorized 2,000,000 shares; none issued	—		—
Common stock, $0.10 par. Authorized 50,000,000 shares; 24,136,351 and 24,405,921 shares issued and outstanding						Common stock, $0.10 par. Authorized 50,000,000 shares; 24,136,351 and 24,405,921 shares issued and outstanding	2,414		2,441
Additional paid in capital	Additional paid in capital	283,394		283,396		Additional paid in capital	298,708		283,396
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(12,453)		(11,656)		Accumulated other comprehensive loss	(1,066)		(11,656)
Retained earnings	Retained earnings	928,730		965,166		Retained earnings	1,054,902		965,166
Total stockholders' equity	Total stockholders' equity	1,202,081		1,239,347		Total stockholders' equity	1,354,958		1,239,347
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	2,348,092	$	2,263,488	Total liabilities and stockholders' equity	$	2,487,405	$	2,263,488

See accompanying notes to condensed consolidated financial statements.

Table of Contents

HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Income (Unaudited)

Three Months Ended May 31,
(in thousands, except per share data) 2021 2020
Sales revenue, net $ 541,223 $ 420,835
Cost of goods sold 320,631 241,534
Gross profit 220,592 179,301
Selling, general and administrative expense (“SG&A”) 155,751 121,989
Restructuring charges 6 333
Operating income 64,835 56,979
Non-operating income, net 102 236
Interest expense 2,995 3,846
Income before income tax 61,942 53,369
Income tax expense (benefit) 4,970 (6,917)
Net income $ 56,972 $ 60,286
Earnings per share (“EPS”):
Basic $ 2.34 $ 2.39
Diluted 2.31 2.37
Weighted average shares used in computing EPS:
Basic 24,349 25,254
Diluted 24,636 25,397


	Three Months Ended November 30,				Nine Months Ended November 30,
(in thousands, except per share data)	2021		2020		2021		2020
Sales revenue, net	$	624,884	$	637,737	$	1,641,335	$	1,589,424
Cost of goods sold	351,051		350,410		936,322		892,460
Gross profit	273,833		287,327		705,013		696,964

Selling, general and administrative expense (“SG&A”)	183,788		186,630		482,467		439,646

Restructuring charges	5		(12)		380		355
Operating income	90,040		100,709		222,166		256,963

Non-operating income, net	52		93		185		440
Interest expense	3,206		2,926		9,508		9,568
Income before income tax	86,886		97,876		212,843		247,835

Income tax expense	11,203		13,721		28,873		16,061
Net income	$	75,683	$	84,155	$	183,970	$	231,774




Earnings per share (“EPS”):
Basic	$	3.14	$	3.37	$	7.60	$	9.20
Diluted	3.10		3.34		7.52		9.14








Weighted average shares used in computing EPS:
Basic	24,129		24,965		24,193		25,182
Diluted	24,399		25,192		24,461		25,350

See accompanying notes to condensed consolidated financial statements.

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HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended May 31,
(in thousands) 2021 2020
Net income $ 56,972 $ 60,286
Other comprehensive loss, net of tax:
Cash flow hedge activity - interest rate swaps 757 (2,607)
Cash flow hedge activity - foreign currency contracts (1,554) 695
Total other comprehensive loss, net of tax (797) (1,912)
Comprehensive income $ 56,175 $ 58,374


	Three Months Ended November 30,				Nine Months Ended November 30,
(in thousands)	2021		2020		2021		2020
Net income	$	75,683	$	84,155	$	183,970	$	231,774
Other comprehensive income (loss), net of tax:
Cash flow hedge activity - interest rate swaps	1,787		1,180		3,623		(696)
Cash flow hedge activity - foreign currency contracts	3,358		855		6,967		(4,584)
Total other comprehensive income (loss), net of tax	5,145		2,035		10,590		(5,280)
Comprehensive income	$	80,828	$	86,190	$	194,560	$	226,494

See accompanying notes to condensed consolidated financial statements.

Table of Contents

HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

Common Stock Additional Paid in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity
(in thousands, including shares) Shares Par
Value
Balances at February 29, 2020 25,194 $ 2,519 $ 268,043 $ (7,005) $ 898,166 $ 1,161,723
Net income — — — — 60,286 60,286
Other comprehensive loss, net of tax — — — (1,912) — (1,912)
Exercise of stock options 8 1 475 — — 476
Issuance and settlement of restricted stock 165 17 (17) — — 0
Issuance of common stock related to stock purchase plan 15 1 1,900 — — 1,901
Common stock repurchased and retired (61) (6) (9,895) — (112) (10,013)
Share-based compensation — — 9,291 — — 9,291
Balances at May 31, 2020 25,321 $ 2,532 $ 269,797 $ (8,917) $ 958,340 $ 1,221,752
Balances at February 28, 2021 24,406 $ 2,441 $ 283,396 $ (11,656) $ 965,166 $ 1,239,347
Net income — — — — 56,972 56,972
Other comprehensive loss, net of tax — — — (797) — (797)
Exercise of stock options 4 — 275 — — 275
Issuance and settlement of restricted stock 177 18 (18) — — 0
Issuance of common stock related to stock purchase plan 13 1 2,337 — — 2,338
Common stock repurchased and retired (502) (50) (16,616) — (93,408) (110,074)
Share-based compensation — — 14,020 — — 14,020
Balances at May 31, 2021 24,098 $ 2,410 $ 283,394 $ (12,453) $ 928,730 $ 1,202,081


	Common Stock			Additional Paid in Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Shareholders' Equity
(in thousands, including shares)	Shares	Par Value
Balances at February 28, 2021	24,406	$	2,441	$	283,396	$	(11,656)	$	965,166	$	1,239,347
Net income	—	—		—		—		56,972		56,972

Other comprehensive loss, net of tax	—	—		—		(797)		—		(797)
Exercise of stock options	4	—		275		—		—		275
Issuance and settlement of restricted stock	177	18		(18)		—		—		—
Issuance of common stock related to stock purchase plan	13	1		2,337		—		—		2,338
Common stock repurchased and retired	(502)	(50)		(16,616)		—		(93,408)		(110,074)
Share-based compensation	—	—		14,020		—		—		14,020

Balances at May 31, 2021	24,098	$	2,410	$	283,394	$	(12,453)	$	928,730	$	1,202,081
Net income	—	—		—		—		51,315		51,315

Other comprehensive income, net of tax	—	—		—		6,242		—		6,242
Exercise of stock options	6	1		519		—		—		520
Issuance and settlement of restricted stock	2	—		—		—		—		—

Common stock repurchased and retired	(1)	—		(104)		—		(12)		(116)
Share-based compensation	—	—		7,780		—		—		7,780

Balances at August 31, 2021	24,105	$	2,411	$	291,589	$	(6,211)	$	980,033	$	1,267,822
Net income	—	—		—		—		75,683		75,683

Other comprehensive income, net of tax	—	—		—		5,145		—		5,145
Exercise of stock options	11	1		664		—		—		665
Issuance and settlement of restricted stock	22	2		(2)		—		—		—
Issuance of common stock related to stock purchase plan	10	1		1,922		—		—		1,923
Common stock repurchased and retired	(12)	(1)		(2,014)		—		(814)		(2,829)
Share-based compensation	—	—		6,549		—		—		6,549

Balances at November 30, 2021	24,136	$	2,414	$	298,708	$	(1,066)	$	1,054,902	$	1,354,958

See accompanying notes to condensed consolidated financial statements.

Table of Contents

HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity - Continued (Unaudited)


	Common Stock			Additional Paid in Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Shareholders' Equity
(in thousands, including shares)	Shares	Par Value
Balances at February 29, 2020	25,194	$	2,519	$	268,043	$	(7,005)	$	898,166	$	1,161,723
Net income	—	—		—		—		60,286		60,286

Other comprehensive loss, net of tax	—	—		—		(1,912)		—		(1,912)
Exercise of stock options	8	1		475		—		—		476
Issuance and settlement of restricted stock	165	17		(17)		—		—		—
Issuance of common stock related to stock purchase plan	15	1		1,900		—		—		1,901
Common stock repurchased and retired	(61)	(6)		(9,895)		—		(112)		(10,013)
Share-based compensation	—	—		9,291		—		—		9,291

Balances at May 31, 2020	25,321	$	2,532	$	269,797	$	(8,917)	$	958,340	$	1,221,752
Net income	—	—		—		—		87,333		87,333

Other comprehensive loss, net of tax	—	—		—		(5,403)		—		(5,403)
Exercise of stock options	4	1		370		—		—		371
Issuance and settlement of restricted stock	4	—		—		—		—		—

Common stock repurchased and retired	(1)	—		(148)		—		—		(148)
Share-based compensation	—	—		4,624		—		—		4,624

Balances at August 31, 2020	25,328	$	2,533	$	274,643	$	(14,320)	$	1,045,673	$	1,308,529
Net income	—	—		—		—		84,155		84,155

Other comprehensive income, net of tax	—	—		—		2,035		—		2,035
Exercise of stock options	1	—		70		—		—		70
Issuance and settlement of restricted stock	20	2		(2)		—		—		—
Issuance of common stock related to stock purchase plan	12	1		1,709		—		—		1,710
Common stock repurchased and retired	(967)	(97)		(5,870)		—		(186,833)		(192,800)
Share-based compensation	—	—		6,739		—		—		6,739

Balances at November 30, 2020	24,394	$	2,439	$	277,289	$	(12,285)	$	942,995	$	1,210,438

See accompanying notes to condensed consolidated financial statements.

Table of Contents

HELEN OF TROY LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)


		Three Months Ended May 31,					Nine Months Ended November 30,
(in thousands)	(in thousands)	2021		2020		(in thousands)	2021		2020
Cash provided by operating activities:
Cash (used) provided by operating activities:						Cash (used) provided by operating activities:
Net income	Net income	$	56,972	$	60,286	Net income	$	183,970	$	231,774

Adjustments to reconcile net income to net cash (used) provided by operating activities:	Adjustments to reconcile net income to net cash (used) provided by operating activities:					Adjustments to reconcile net income to net cash (used) provided by operating activities:
Depreciation and amortization	Depreciation and amortization	8,713		9,140		Depreciation and amortization	26,082		27,995
Amortization of financing costs	Amortization of financing costs	243		267		Amortization of financing costs	738		772
Non-cash operating lease expense	Non-cash operating lease expense	2,027		1,558		Non-cash operating lease expense	6,910		4,910
Provision for credit losses	Provision for credit losses	0		1,738		Provision for credit losses	292		3,445
Non-cash share-based compensation	Non-cash share-based compensation	14,020		9,291		Non-cash share-based compensation	28,349		20,654

Loss on the sale or disposal of property and equipment		0		6
Gain on sale of North America Personal Care business						Gain on sale of North America Personal Care business	(513)		—
(Gain) loss on the sale or disposal of property and equipment						(Gain) loss on the sale or disposal of property and equipment	(2,274)		75
Deferred income taxes and tax credits	Deferred income taxes and tax credits	(3,811)		2,274		Deferred income taxes and tax credits	(8,721)		(4,132)
Changes in operating capital:	Changes in operating capital:					Changes in operating capital:
Receivables	Receivables	(38,747)		13,516		Receivables	(139,292)		(155,492)
Inventory	Inventory	(58,860)		(16,017)		Inventory	(103,821)		(121,629)
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(2,414)		1,490		Prepaid expenses and other current assets	(6,765)		(2,915)
Other assets and liabilities, net	Other assets and liabilities, net	(3,185)		(3,907)		Other assets and liabilities, net	(6,110)		(6,617)
Accounts payable	Accounts payable	(10,885)		40,963		Accounts payable	(30,549)		148,501
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	(35,574)		(16,010)		Accrued expenses and other current liabilities	29,198		95,612
Accrued income taxes	Accrued income taxes	8,116		(11,769)		Accrued income taxes	17,452		6,793
Net cash (used) provided by operating activities	Net cash (used) provided by operating activities	(63,385)		92,826		Net cash (used) provided by operating activities	(5,054)		249,746

Cash used by investing activities:
Cash provided (used) by investing activities:						Cash provided (used) by investing activities:
Capital and intangible asset expenditures	Capital and intangible asset expenditures	(4,006)		(6,451)		Capital and intangible asset expenditures	(41,529)		(19,423)

Net cash used by investing activities		(4,006)		(6,451)
Proceeds from sale of North America Personal Care business						Proceeds from sale of North America Personal Care business	44,700		—
Proceeds from the sale of property and equipment						Proceeds from the sale of property and equipment	5,305		—
Net cash provided (used) by investing activities						Net cash provided (used) by investing activities	8,476		(19,423)

Cash provided (used) by financing activities:
Cash used by financing activities:						Cash used by financing activities:
Proceeds from line of credit	Proceeds from line of credit	221,100		765,200		Proceeds from line of credit	461,400		917,400
Repayment of line of credit	Repayment of line of credit	(52,100)		(774,200)		Repayment of line of credit	(356,400)		(811,400)
Repayment of long-term debt	Repayment of long-term debt	(1,900)		(1,900)		Repayment of long-term debt	(1,900)		(1,900)
Payment of financing costs	Payment of financing costs	0		(3,789)		Payment of financing costs	—		(3,796)
Proceeds from share issuances under share-based compensation plans	Proceeds from share issuances under share-based compensation plans	2,613		2,377		Proceeds from share issuances under share-based compensation plans	5,721		4,528

Payments for repurchases of common stock	Payments for repurchases of common stock	(110,074)		(10,013)		Payments for repurchases of common stock	(113,019)		(202,961)
Net cash provided (used) by financing activities		59,639		(22,325)
Net cash used by financing activities						Net cash used by financing activities	(4,198)		(98,129)

Net (decrease) increase in cash and cash equivalents	Net (decrease) increase in cash and cash equivalents	(7,752)		64,050		Net (decrease) increase in cash and cash equivalents	(776)		132,194
Cash and cash equivalents, beginning balance	Cash and cash equivalents, beginning balance	45,120		24,467		Cash and cash equivalents, beginning balance	45,120		24,467
Cash and cash equivalents, ending balance	Cash and cash equivalents, ending balance	$	37,368	$	88,517	Cash and cash equivalents, ending balance	$	44,344	$	156,661

Supplemental non-cash investing activity:						Supplemental non-cash investing activity:
Capital expenditures included in accounts payable						Capital expenditures included in accounts payable	$	8,140	$	—

See accompanying notes to condensed consolidated financial statements.

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HELEN OF TROY LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

~~May 31,~~November 30, 2021

Note 1 - Basis of Presentation and Related Information

Corporate Overview

The accompanying condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly our consolidated financial position as of ~~May 31,~~November 30, 2021 and February 28, 2021, and the results of our consolidated operations for the interim periods presented. We follow the same accounting policies when preparing quarterly financial data as we use for preparing annual data. These statements should be read in conjunction with the consolidated financial statements and the notes included in our latest annual report on Form 10-K for the fiscal year ended February 28, 2021 (“Form 10-K”), and our other reports on file with the Securities and Exchange Commission (the “SEC”).

When used in these notes, unless otherwise indicated or the context suggests otherwise, references to “the Company”, “our Company”, “Helen of Troy”, “we”, “us”, or “our” refer to Helen of Troy Limited and its subsidiaries, which are all wholly-owned. We refer to our common shares, par value $0.10 per share, as “common stock.” References to “the FASB” refer to the Financial Accounting Standards Board. References to “GAAP” refer to accounting principles generally accepted in the United States of America (the “U.S.”). References to “ASU” refer to the codification of GAAP in the Accounting Standards Updates issued by the FASB. References to “ASC” refer to the codification of GAAP in the Accounting Standards Codification issued by the FASB.

We incorporated as Helen of Troy Corporation in Texas in 1968 and were reorganized as Helen of Troy Limited in Bermuda in 1994. We are a leading consumer products company offering creative products and solutions for our customers through a diversified portfolio of brands. As of ~~May 31,~~November 30, 2021, we operated 3 segments: Housewares, Health & Home, and Beauty. Our Housewares segment provides a broad range of innovative consumer products for the home and on the go to help with food preparation, cooking, cleaning, organization, beverage service, and other tasks to ease everyday living for families. The Health & Home segment provides healthcare and home environment products including health care devices, water filtration systems, and small home appliances. Our Beauty segment provides mass and prestige market beauty appliance and personal care products including hair styling appliances, grooming tools, decorative haircare accessories, and ~~liquid-, solid- and powder-based~~liquid personal care ~~and grooming~~ products.

Our business is seasonal due to different calendar events, holidays and seasonal weather patterns. Our fiscal reporting period ends on the last day in February. Historically, our highest sales volume and operating income occur in our third fiscal quarter ending November 30th. We purchase our products from unaffiliated manufacturers, most of which are located in China, Mexico and the U.S.

During the fourth quarter of fiscal 2020, we committed to a plan to divest certain assets within our Beauty segment's mass channel personal care business, which included liquid, powder and aerosol products under brands such as Pert, Brut, Sure and Infusium (“Personal Care”). On June 7, 2021, we completed the sale of our Personal Care business, not including the Latin America and Caribbean regions, to HRB Brands LLC, for $44.7 million in cash. The net assets ~~to be disposed of include~~sold included intangible assets, inventory, certain net trade receivables, fixed assets and certain accrued sales discounts and allowances relating to our ~~mass channel liquids, powder~~North America Personal Care business. During the second quarter of fiscal 2022, we recognized a gain on the sale in SG&A totaling $0.5 million. We are continuing to negotiate the sale of the Latin America and ~~aerosol products under brands such as Pert, Brut, Sure and Infusium.~~Caribbean Personal Care businesses to HRB Brands LLC, which we expect to close no later than the end of fiscal 2022. Accordingly, we have ~~classified~~continued to classify the identified net assets of the ~~disposal group as held for sale. The Personal Care divestiture was completed during the second quarter of fiscal 2022. See Notes 3 and 16 for additional information.~~

Latin

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America and Caribbean Personal Care businesses as held for sale. See Note 3 for additional information.

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) to be a pandemic. The effects of the COVID-19 pandemic have had an unfavorable impact on certain parts of our business. The impact includes the effect of temporary closures of certain customer stores or limited hours of operation, and materially lower store traffic, primarily during fiscal 2021. Additionally, COVID-19 has disrupted certain parts of our supply chain. Surges in demand and shifts in shopping patterns related to COVID-19, as well as other factors, have strained the global freight network, which is resulting in higher costs, less capacity, and longer lead times. These factors may impact our ability to fulfill some orders on a timely basis. Additionally, the extent of COVID-19's impact on the demand for certain of our product lines in the future will depend on future developments, including the duration, spread and intensity of the pandemic, our continued ability to source and distribute our products, as well as any future government actions affecting consumers and the global economy generally, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. Accordingly, our liquidity and financial results could be impacted in ways that we are not able to predict today.

Principles of Consolidation

The accompanying condensed consolidated financial statements are prepared in accordance with GAAP and include all of our subsidiaries. Our condensed consolidated financial statements are prepared in U.S. Dollars. All intercompany balances and transactions are eliminated in consolidation.

The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Actual results may differ materially from those estimates.

Reclassifications

We have reclassified, combined or separately disclosed certain amounts in the prior years’ condensed consolidated financial statements and accompanying footnotes to conform with the current period’s presentation.

Note 2 - New Accounting Pronouncements

~~There~~Except for the changes discussed below, there have been no changes in the information provided in our Form 10-K.

Not Yet Adopted

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. Prior to the issuance of this guidance, contract assets and contract liabilities were recognized by the acquirer at fair value on the acquisition date. The amendments in ASU 2021-08 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted and should be applied prospectively to acquisitions occurring on or after the effective date. This ASU will be effective for us in the first quarter of fiscal 2024. We believe that the adoption of this ASU will not have a material impact on our consolidated financial statements.

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In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which requires business entities to disclose information about transactions with a government that are accounted for by applying a grant or contribution model by analogy to other accounting guidance due to the lack of specific authoritative guidance in GAAP, (for example, a grant model within International Accounting Standard 20, Accounting for Government Grants and Disclosure of Government Assistance, or Subtopic 958-605, Not-For-Profit Entities - Revenue Recognition). This guidance excludes transactions in the scope of specific GAAP, such as tax incentives accounted for under ASC 740, Income Taxes. This new ASU is effective for annual periods beginning after December 15, 2021, with early adoption and retrospective or prospective application permitted. This ASU will be effective for us in our Form 10-K for fiscal 2023. We believe that the adoption of this ASU will not have a material impact on our consolidated financial statement disclosures.

Note 3 - Assets and Liabilities Held for Sale

During the fourth quarter of fiscal 2020, we committed to a plan to divest certain assets within our Personal Care business and accordingly, we classified the identified net assets of the disposal group as held for sale. On June 7, 2021, we completed the sale of our Personal Care business, not including the Latin America and Caribbean regions, to HRB Brands LLC, for $44.7 million in cash. The net assets ~~to be disposed of include~~sold included intangible assets, inventory, certain net trade receivables, fixed assets and certain accrued sales discounts and allowances relating to our ~~mass channel liquids, powder and aerosol products under brands such as Pert, Brut, Sure and Infusium. The~~North America Personal Care ~~divestiture was completed during~~business. During the second quarter of fiscal 2022, we recognized a gain on the sale in SG&A totaling $0.5 million. We are continuing to negotiate the sale of the Latin America and Caribbean Personal Care businesses to HRB Brands LLC, which we expect to close no later than the end of fiscal 2022. ~~See Note 16~~Accordingly, we have continued to classify the identified net assets of the Latin America and Caribbean Personal Care businesses as held for ~~additional information.~~sale.

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The carrying amounts of the major classes of assets and liabilities for our Personal Care business that were classified as held for sale are as follows:


(in thousands)	(in thousands)	May 31, 2021		February 28, 2021		(in thousands)	November 30, 2021		February 28, 2021
Receivables, net of allowance of $89 and $30		$	16,415	$	7,979
Receivables, net of allowance of $34 and $30						Receivables, net of allowance of $34 and $30	$	1,555	$	7,979
Inventory	Inventory	13,010		12,667		Inventory	644		12,667
Property and equipment, net of accumulated depreciation of $403		100		100
Goodwill, net of accumulated impairment of $80,445		1,397		1,397
Other intangible assets, net of accumulated amortization of $4,474		17,724		17,724
Property and equipment, net of accumulated depreciation of $152 and $403						Property and equipment, net of accumulated depreciation of $152 and $403	66		100
Goodwill (1)						Goodwill (1)	—		1,397
Other intangible assets (1)						Other intangible assets (1)	—		17,724
Assets held for sale	Assets held for sale	$	48,646	$	39,867	Assets held for sale	$	2,265	$	39,867

Accrued sales discounts and allowances	Accrued sales discounts and allowances	$	5,757	$	0	Accrued sales discounts and allowances	$	286	$	—
Liabilities held for sale	Liabilities held for sale	$	5,757	$	0	Liabilities held for sale	$	286	$	—

(1)Goodwill and other intangible assets as of February 28, 2021 are presented net of accumulated impairment and accumulated amortization of $80,445 and $4,474, respectively.

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Note 4 - Accrued Expenses and Other Current Liabilities

A summary of accrued expenses and other current liabilities is as follows:


(in thousands)	(in thousands)	May 31, 2021		February 28, 2021		(in thousands)	November 30, 2021		February 28, 2021
Accrued compensation, benefits and payroll taxes	Accrued compensation, benefits and payroll taxes	$	26,089	$	66,385	Accrued compensation, benefits and payroll taxes	$	41,107	$	66,385
Accrued sales discounts and allowances	Accrued sales discounts and allowances	57,758		59,426		Accrued sales discounts and allowances	68,729		59,426
Accrued sales returns	Accrued sales returns	30,344		29,434		Accrued sales returns	34,960		29,434
Accrued advertising	Accrued advertising	45,528		50,923		Accrued advertising	72,183		50,923
Other	Other	72,885		65,011		Other	79,383		65,011
Total accrued expenses and other current liabilities	Total accrued expenses and other current liabilities	$	232,604	$	271,179	Total accrued expenses and other current liabilities	$	296,362	$	271,179

Note 5 - Share-Based Compensation Plans

As part of our compensation structure, we grant share-based compensation awards to certain employees and non-employee members of our Board of Directors during the fiscal year. These awards may be subject to attainment of certain service conditions, performance conditions and/or market conditions. During the first quarter of fiscal 2022, we granted 83,227 service condition awards (“Service Condition Awards”) with a weighted average grant date fair value of $219.02. Additionally, we granted 143,340 performance-based awards during the first quarter of fiscal 2022, of which 71,670 contained performance conditions (“Performance Condition Awards”) and 71,670 contained market conditions (“Market Condition Awards”) with weighted average grant date fair values of $216.20 and $156.08, respectively. Refer to our Form 10-K for further information on the Company's share-based compensation plans.

We recorded share-based compensation expense in SG&A as follows:

Three Months Ended May 31,
(in thousands) 2021 2020
Stock options $ 0 $ 12
Directors stock compensation 160 182
Service Condition Awards 1,940 1,920
Performance Condition Awards 10,023 6,691
Market Condition Awards 1,129 0
Employee stock purchase plan 768 486
Share-based compensation expense 14,020 9,291
Less income tax benefits (859) (606)
Share-based compensation expense, net of tax $ 13,161 $ 8,685

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	Three Months Ended November 30,				Nine Months Ended November 30,
(in thousands)	2021		2020		2021		2020
Stock options	$	—	$	3	$	—	$	18
Directors stock compensation	160		161		483		525
Service Condition Awards	3,117		1,677		8,353		5,261
Performance Condition Awards	1,622		4,407		14,706		13,873
Market Condition Awards	1,115		—		3,504		—
Employee stock purchase plan	535		491		1,303		977
Share-based compensation expense	6,549		6,739		28,349		20,654
Less income tax benefits	(784)		(403)		(2,355)		(1,406)
Share-based compensation expense, net of tax	$	5,765	$	6,336	$	25,994	$	19,248

Unrecognized Share-Based Compensation Expense

As of ~~May 31,~~November 30, 2021, our total unrecognized share-based compensation for all awards was ~~$47.4~~$33.8 million, which will be recognized over a weighted average amortization period of ~~2.5~~2.2 years. The total unrecognized share-based compensation reflects an estimate of target achievement for Performance Condition Awards granted during the first quarter of fiscal 2022 and fiscal 2021, and ana weighted average estimate of ~~200%~~175% of target achievement for Performance Condition Awards granted in fiscal 2020.

Note 6 - Repurchases of Common Stock

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replaced our former repurchase ~~authorization.~~authorization, of which approximately $79.5 million remained. As of ~~May 31,~~November 30, 2021, our repurchase authorization allowed for the purchase of ~~$79.6~~$497.2 million of common stock.

Our current equity-based compensation plans include provisions that allow for the “net exercise” of share-settled awards by all plan participants. In a net exercise, any required payroll taxes, federal withholding taxes and exercise price of the shares due from the equity holder can be settled by having the holder tender back to us a number of shares at fair value equal to the amounts due. Net exercises are treated as purchases and retirements of shares.

The following table summarizes our share repurchase activity for the periods shown:


		Three Months Ended May 31,					Three Months Ended November 30,				Nine Months Ended November 30,
(in thousands, except share and per share data)	(in thousands, except share and per share data)	2021		2020		(in thousands, except share and per share data)	2021		2020		2021		2020
Common stock repurchased on the open market:	Common stock repurchased on the open market:					Common stock repurchased on the open market:
Number of shares	Number of shares	436,842		0		Number of shares	—		960,829		436,842		960,829
Aggregate value of shares	Aggregate value of shares	$	95,484	$	0	Aggregate value of shares	$	—	$	191,606	$	95,484	$	191,606
Average price per share	Average price per share	$	218.58	$	0	Average price per share	$	—	$	199.42	$	218.58	$	199.42

Common stock received in connection with share-based compensation:	Common stock received in connection with share-based compensation:					Common stock received in connection with share-based compensation:
Number of shares	Number of shares	65,644		60,845		Number of shares	12,059		6,115		78,206		67,740
Aggregate value of shares	Aggregate value of shares	$	14,590	$	10,013	Aggregate value of shares	$	2,829	$	1,194	$	17,535	$	11,355
Average price per share	Average price per share	$	222.26	$	164.56	Average price per share	$	234.56	$	195.26	$	224.22	$	167.63

Note 7 - Restructuring Plan

In October 2017, we announced a restructuring plan (referred to as “Project Refuel”) intended to enhance performance primarily in the Beauty and former Nutritional Supplements segments. Project Refuel includes charges for a reduction-in-force and the elimination of certain contracts. During the first quarter of fiscal 2019, we expanded Project Refuel to include the realignment and streamlining of our supply chain structure. We are targeting total annualized profit improvements of approximately $10.5 million to $12.5 million over the duration of the plan. We estimate the plan to be completed during fiscal 2022 and expect to incur total restructuring charges of approximately $10.3 million over the duration of the plan, of which ~~$9.2~~$9.6 million have been incurred through the ~~first~~third quarter of fiscal 2022. Restructuring provisions are determined based on estimates prepared at the time the restructuring actions are approved by management and are revised periodically.

We incurred an insignificant amount and ~~$0.3~~$0.4 million of pre-tax restructuring costs during the three and nine months ended ~~May 31,~~November 30, 2021, ~~and May 31, 2020,~~ respectively, which are recorded as “Restructuring

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charges” in the condensed consolidated statements of income. During the three and nine month ~~period~~periods ended ~~May 31,~~November 30, 2021, we made total cash restructuring payments of $0.1 ~~million.~~million and $0.5 million, respectively. Since implementing Project Refuel, we have made total cash restructuring payments of ~~$9.2~~$9.6 million as of ~~May 31,~~November 30, 2021.

Note 8 - Commitments and Contingencies

Legal Matters

We are involved in various legal claims and proceedings in the normal course of operations. We believe the outcome of these matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity, except as described below.

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Regulatory Matters

As a global company, we are subject to U.S. and foreign regulations, including environmental, health and

safety laws, and industry-specific product certifications. Many of the products we sell are subject to

product safety laws and regulations in various jurisdictions. These laws and regulations specify the

maximum allowable levels of certain materials that may be contained in our products, provide statutory

prohibitions against misbranded and adulterated products, establish ingredients and manufacturing

procedures for certain products, specify product safety testing requirements, and set product

identification, labeling and claim requirements. Additionally, some of our product lines within our Health & Home segment are subject to product identification, labeling and claim requirements, which are monitored and enforced by regulatory agencies, such as the U.S. Environmental Protection Agency (the “EPA”), U.S. Customs and Border Protection, the U.S. Food and Drug Administration, and the U.S. Consumer Product Safety Commission.

~~We are currently~~In our quarterly report on Form 10-Q for our first quarter of fiscal 2022, we disclosed that we were in discussions with the EPA regarding the compliance of packaging claims on certain of our products in the air and water filtration categories and a limited subset of humidifier products within the Health & Home segment that are sold in the U.S. The EPA ~~has~~did not ~~raised~~raise any product quality, safety or performance issues. ~~We expect these products to be available for distribution with the only changes being modified labeling or different packaging.~~ As a result of these packaging compliance discussions, on May 27, 2021, we voluntarily implemented a temporary stop shipment action across this line of products in the U.S. ~~while~~as we ~~ensure that all labeling is in compliance and we work~~worked with the EPA towards an expedient resolution. ~~The~~In July 2021, the EPA ~~has~~ approved modest changes to our labeling claims on ~~our~~packaging of existing water filtration ~~packaging,~~products, which we ~~have begun to implement. We resumed shipment~~implemented, and subsequently began shipping in limited quantities during the second quarter of fiscal 2022. The shipping volume for these products has continued to increase and, ~~are actively working towards similar agreements regarding~~in September 2021, we returned to a more normalized level of shipping activity. In August 2021, the EPA approved changes to our air filtration packaging and ~~humidification packaging in continued collaboration with the EPA. At our request, the EPA issued~~we implemented a Stop Sale, Use or Removal Order on June 29, 2021, which, among other things, allows for the movement of certain of our products among our warehouses and will facilitate rework of the affected air filtration packaging once agreed to with the EPA. We believe this is meaningful progress towards a final resolution with the EPA. The stop shipment will remain in effect until we implement an approved labeling and repackaging plan. We began shipping limited quantities of the impacted products at the end of August 2021 and returned to a more normalized level of shipping activity in November 2021. We have also resolved the majority of the packaging compliance concerns on the limited subset of humidifier products and do not expect ~~that~~them to have a material impact on our consolidated financial results. Our consolidated and Health & Home segment’s ~~fiscal 2022~~ net sales revenue, gross profit and operating income ~~will be~~for the nine months ended November 30, 2021, have been materially and adversely impacted by the stop ~~shipment.~~shipment actions and the time needed to execute repackaging plans after changes were approved by the EPA. While we have resumed normalized levels of shipping of the affected inventory, we are still in process of repackaging our existing inventory of affected products. If we are not able to execute our repackaging plans on schedule to meet demand, our net sales revenue, gross profit and operating income could continue to be materially and adversely impacted. At this time, we are not aware of any fines or penalties related to this matter imposed against us by the EPA. While we do not anticipate material fines or penalties, there can be no assurances that such fines or penalties will not be imposed.

~~In addition, during~~During the first quarter of fiscal 2022, we recorded a $13.1 million charge to cost of goods sold to write-off the obsolete packaging for the affected products in our inventory on-hand and in-transit as of the end of the first quarter of fiscal 2022. ~~The charge was~~During the second and third quarters of fiscal 2022, we incurred additional compliance costs of $3.0 million and $4.9 million, respectively, comprised of incremental warehouse storage costs and legal fees of $2.6 million and $4.6 million, respectively, which were recognized in SG&A, and storage and obsolete packaging charges from vendors of $0.4 million and $0.3 million, respectively, which were recognized in cost of goods ~~sold and is~~sold. These charges are referred to throughout this Form 10-Q as “EPA compliance costs.” In addition, during the second and third quarters of fiscal 2022, we incurred and capitalized into inventory costs to repackage a portion of our existing inventory of the affected products and expect to continue to incur and capitalize such costs as we continue to repackage the remainder of the inventory during the fourth quarter of fiscal 2022. We also expect to incur additional compliance costs, which may include ~~costs to relabel or repackage our existing inventory as well as~~ incremental freight, ~~and~~warehouse storage costs, ~~among other things. Costs to relabel or repackage our existing inventory will be capitalized into~~charges from

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~~inventory; however, many of the~~vendors, and legal fees, among other things. Such potential incremental EPA compliance costs will be expensed as incurred and could materially and adversely impact our consolidated and Health & Home segment’s gross profit and operating income. In addition, our net sales revenue could be materially and adversely impacted by customer returns, an increase in sales discounts and allowances and by the potential impact of distribution losses at certain retailers. Additional impacts or more pronounced adverse impacts may arise that we are not currently aware of today. Accordingly, our business, results of operations and financial condition could be adversely and materially impacted ~~by our actions or~~ in ways that we are not able to predict today. For additional information refer to Part I, Item 2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including “EPA Compliance Costs” and to Part II, Item 1A., “Risk Factors” included within this Form 10-Q.

Note 9 - Long-Term Debt

A summary of our long-term debt follows:


(in thousands)	(in thousands)	May 31, 2021		February 28, 2021		(in thousands)	November 30, 2021		February 28, 2021
Mississippi Business Finance Corporation Loan (the “MBFC Loan”) (1)	Mississippi Business Finance Corporation Loan (the “MBFC Loan”) (1)	$	16,708	$	18,607	Mississippi Business Finance Corporation Loan (the “MBFC Loan”) (1)	$	16,707	$	18,607
Credit Agreement (2)	Credit Agreement (2)	498,000		329,000		Credit Agreement (2)	434,000		329,000
Subtotal	Subtotal	514,708		347,607		Subtotal	450,707		347,607
Unamortized prepaid financing fees	Unamortized prepaid financing fees	(3,734)		(3,977)		Unamortized prepaid financing fees	(3,239)		(3,977)
Total long-term debt	Total long-term debt	510,974		343,630		Total long-term debt	447,468		343,630
Less: current maturities of long-term debt	Less: current maturities of long-term debt	(1,884)		(1,884)		Less: current maturities of long-term debt	(1,884)		(1,884)
Long-term debt, excluding current maturities	Long-term debt, excluding current maturities	$	509,090	$	341,746	Long-term debt, excluding current maturities	$	445,584	$	341,746

(1)The MBFC Loan is unsecured and bears floating interest based on either the London Interbank Offered Rate (“LIBOR”) plus a margin of up to 2.0%, or a Base Rate plus a margin of up to 1.0%, as determined by the interest rate elected and the Net Leverage Ratio defined in the ~~Indenture.~~loan agreement. The weighted average interest rate on borrowings outstanding was 1.1% at both ~~May 31,~~November 30, 2021 and February 28, 2021.

(2)The Credit Agreement (defined below) is unsecured and bears floating interest at either the Base Rate or LIBOR, plus a margin based on the Net Leverage Ratio (as defined in the Credit Agreement) of 0% to 1.0% and 1.0% to 2.0% for Base Rate and LIBOR borrowings, respectively. These floating interest rates are hedged with interest rate swaps to effectively fix interest rates on $225 million of the outstanding principal balance under the Credit Agreement (see Notes 10, 11, and 12 for additional information regarding interest rate swaps). The weighted average interest rate on borrowings outstanding was 1.1% at both ~~May 31,~~November 30, 2021 and February 28, 2021.

Credit Agreement

We have a credit agreement (the "Credit Agreement") with Bank of America, N.A., as administrative agent, and other lenders that provides for an unsecured total revolving commitment of $1.25 billion. As of ~~May 31,~~November 30, 2021, the balance of outstanding letters of credit was ~~$19.2~~$32.7 million and the amount available for borrowings was ~~$732.8~~$783.3 million. Covenants in the Credit Agreement limit the amount of total indebtedness we can incur. As of ~~May 31,~~November 30, 2021, these covenants ~~did not limit~~effectively limited our ability to incur ~~$732.8~~more than $735.8 million of additional debt ~~under~~from all sources, including the Credit ~~Agreement.~~Agreement, or $783.3 million in the event a qualified acquisition is consummated.

Debt Covenants

As of ~~May 31,~~November 30, 2021, we were in compliance with all covenants as defined under the terms of the Credit Agreement and our other debt agreements.

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Note 10 - Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques under

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the accounting guidance related to fair value measurements are based on observable and unobservable inputs. These inputs are classified into the following hierarchy:

Level 1:Quoted prices for identical assets or liabilities in active markets;

Level 2:Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable; and

Level 3:Unobservable inputs that reflect the reporting entity’s own assumptions.

Our financial assets and liabilities are classified as Level 2 because their valuation is dependent on observable inputs and other quoted prices for similar assets or liabilities, or model-derived valuations whose significant value drivers are observable. The following tables present the carrying amount and fair value of our financial assets and liabilities measured and recorded at fair value on a recurring basis and classified as Level 2 as follows:


		Carrying Amount and Fair Value					Carrying Amount and Fair Value

(in thousands)	(in thousands)	May 31, 2021		February 28, 2021		(in thousands)	November 30, 2021		February 28, 2021
Assets:	Assets:					Assets:
Cash equivalents (money market accounts)	Cash equivalents (money market accounts)	$	1,602	$	1,631	Cash equivalents (money market accounts)	$	791	$	1,631

Foreign currency derivatives	Foreign currency derivatives	0		33		Foreign currency derivatives	3,448		33
Total assets	Total assets	$	1,602	$	1,664	Total assets	$	4,239	$	1,664

Liabilities:	Liabilities:					Liabilities:

Interest rate swaps	Interest rate swaps	$	8,947	$	9,941	Interest rate swaps	$	5,186	$	9,941
Foreign currency derivatives	Foreign currency derivatives	8,612		6,550		Foreign currency derivatives	658		6,550
Total liabilities	Total liabilities	$	17,559	$	16,491	Total liabilities	$	5,844	$	16,491

The carrying amounts of cash, accounts payable, accrued expenses and other current liabilities and income taxes payable approximate fair value because of the short maturity of these items. The carrying amounts of receivables approximate fair value due to the effect of the related allowance for credit losses. The carrying amount of our floating rate debt approximates its fair value.

We use derivatives to manage our exposure to changes in foreign currency exchange rates, which can include foreign currency forward contracts, zero cost collars and cross-currency debt swaps. In addition, we use interest rate swaps to manage our exposure to changes in interest rates. All of our derivative assets and liabilities are recorded at fair value. See Notes 11 and 12 for more information on our derivatives.

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Note 11 - Financial Instruments and Risk Management

Foreign Currency Risk

The U.S. Dollar is the functional currency for the Company and all of its subsidiaries and is also the reporting currency for the Company. By operating internationally, we are subject to foreign currency risk from transactions denominated in currencies other than the U.S. Dollar (“foreign currencies”). Such transactions include sales, certain inventory purchases and operating expenses. As a result of such transactions, portions of our cash, trade accounts receivable and trade accounts payable are denominated in foreign currencies. ~~Approximately 12%~~For both the three and ~~15%~~nine month periods ended November 30, 2021, approximately 10% of our net sales revenue was

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denominated in foreign currencies, ~~during~~compared to 11% and 12%, respectively, for the ~~three month~~same periods ~~ended May 31, 2021 and 2020, respectively.~~last year. These sales were primarily denominated in British Pounds, Euros, Mexican Pesos and Canadian Dollars. We make most of our inventory purchases from vendors in the Asia Pacific market and primarily use the U.S. Dollar for such purchases.

In our condensed consolidated statements of income, foreign currency exchange rate gains and losses resulting from the remeasurement of foreign taxes receivable, taxes payable, deferred tax assets, and deferred tax liabilities are recognized in their respective income tax lines, and all other foreign currency exchange rate gains and losses are recognized in SG&A. During the three and nine month ~~period~~periods ended ~~May 31,~~November 30, 2021, we recorded foreign currency exchange rate net losses of $0.3 million and $0.8 million, respectively, in SG&A compared to foreign currency exchange rate net gains of $0.4 million ~~in SG&A compared to foreign currency exchange rate net losses of $1.7~~and $0.5 million, respectively, for the same ~~period~~periods last year.

We mitigate certain foreign currency exchange rate risk by using a series of foreign currency contracts, which can include forward contracts and zero-cost collars, designated as cash flow hedges, and mark-to-market cross-currency debt swaps to protect against the foreign currency exchange rate risk inherent in our forecasted transactions denominated in foreign currencies. We do not enter into any derivatives or similar instruments for trading or other speculative purposes. Our foreign currency contracts are designated as cash flow hedges and are recorded on the balance sheet at fair value with changes in fair value recorded in Other Comprehensive ~~Loss~~Income (Loss) (“OCI”) until the hedge transaction is settled, at which point amounts are reclassified from Accumulated Other Comprehensive ~~Loss~~Income (Loss) (“AOCI”) to our condensed consolidated statements of income. Derivatives for which we have not elected hedge accounting consist of our cross-currency debt swaps, and any changes in the fair value of the derivatives are recorded in our condensed consolidated statements of income. We evaluate our derivatives designated as cash flow hedges each quarter to assess hedge effectiveness. Any ineffectiveness, which is not material for any ~~year~~period presented, is immediately recognized in our condensed consolidated statements of income.

Interest Rate Risk

Interest on our outstanding debt as of ~~May 31,~~November 30, 2021 is based on floating interest rates. If short-term interest rates increase, we will incur higher interest expense on any future outstanding balances of floating rate debt. Floating interest rates are hedged with interest rate swaps to effectively fix interest rates on $225.0 million of the outstanding principal balance under the Credit Agreement, which totaled ~~$498.0~~$434.0 million as of ~~May 31,~~November 30, 2021. Our interest rate swaps are designated as cash flow hedges and are recorded on the balance sheet at fair value with changes in fair value recorded in OCI until the hedge transaction is settled, at which point amounts are reclassified from AOCI to our condensed consolidated statements of income. We evaluate our derivatives designated as cash flow hedges each quarter to assess hedge effectiveness. Any ineffectiveness, which is not material for any ~~year~~period presented, is immediately recognized in our condensed consolidated statements of income.

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The following tables summarize the fair values of our derivative instruments as of the end of the periods presented:


(in thousands)	(in thousands)	May 31, 2021												(in thousands)	November 30, 2021
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments	Hedge Type	Final Settlement Date	Notional Amount		Prepaid Expenses and Other Current Assets		Other Assets		Accrued Expenses and Other Current Liabilities		Other Liabilities, Non- current		Derivatives designated as hedging instruments	Hedge Type	Final Settlement Date	Notional Amount		Prepaid Expenses and Other Current Assets		Other Assets		Accrued Expenses and Other Current Liabilities		Other Liabilities, Non- current

Forward contracts - sell Euro	Forward contracts - sell Euro	Cash flow	2/2023	€	43,750	0		0		1,867		241		Forward contracts - sell Euro	Cash flow	2/2023	€	30,500	$	1,494	$	157	$	—	$	—
Forward contracts - sell Canadian Dollars	Forward contracts - sell Canadian Dollars	Cash flow	2/2023	$	46,750	0		0		1,857		251		Forward contracts - sell Canadian Dollars	Cash flow	2/2023	$	34,700	344		148		—		—
Forward contracts - sell Pounds	Forward contracts - sell Pounds	Cash flow	2/2023	£	38,800	0		0		2,399		274		Forward contracts - sell Pounds	Cash flow	2/2023	£	28,250	953		352		—		—

Forward contracts - Sell Australian Dollars		Cash flow	11/2021	A$	4,000	0		0		20		0

Interest rate swaps	Interest rate swaps	Cash flow	1/2024	$	225,000	0		0		4,011		4,936		Interest rate swaps	Cash flow	1/2024	$	225,000	—		—		2,411		2,775
Subtotal	Subtotal					0		0		10,154		5,702		Subtotal					2,791		657		2,411		2,775

Derivatives not designated under hedge accounting	Derivatives not designated under hedge accounting													Derivatives not designated under hedge accounting
Cross-currency debt swaps - Euro	Cross-currency debt swaps - Euro	(1)	04/2022	€	6,000	0		0		863		0		Cross-currency debt swaps - Euro	(1)	4/2022	€	6,000	—		—		272		—
Cross-currency debt swaps - Pounds	Cross-currency debt swaps - Pounds	(1)	04/2022	£	4,500	0		0		840		0		Cross-currency debt swaps - Pounds	(1)	4/2022	£	4,500	—		—		386		—
Subtotal	Subtotal					0		0		1,703		0		Subtotal					—		—		658		—
Total fair value	Total fair value					$	0	$	0	$	11,857	$	5,702	Total fair value					$	2,791	$	657	$	3,069	$	2,775


(in thousands)	(in thousands)	February 28, 2021												(in thousands)	February 28, 2021
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments	Hedge Type	Final Settlement Date	Notional Amount		Prepaid Expenses and Other Current Assets		Other Assets		Accrued Expenses and Other Current Liabilities		Other Liabilities, Non- current		Derivatives designated as hedging instruments	Hedge Type	Final Settlement Date	Notional Amount		Prepaid Expenses and Other Current Assets		Other Assets		Accrued Expenses and Other Current Liabilities		Other Liabilities, Non- current

Forward contracts - sell Euro	Forward contracts - sell Euro	Cash flow	2/2022	€	39,000	0		0		1,851		0		Forward contracts - sell Euro	Cash flow	2/2022	€	39,000	$	—	$	—	$	1,851	$	—
Forward contracts - sell Canadian Dollars	Forward contracts - sell Canadian Dollars	Cash flow	2/2023	$	34,000	0		33		1,061		0		Forward contracts - sell Canadian Dollars	Cash flow	2/2023	$	34,000	—		33		1,061		—

Forward contracts - sell Pounds	Forward contracts - sell Pounds	Cash flow	2/2023	£	34,500	0		0		2,026		21		Forward contracts - sell Pounds	Cash flow	2/2023	£	34,500	—		—		2,026		21

Forward contracts - sell Australian Dollars	Forward contracts - sell Australian Dollars	Cash flow	11/2021	A$	4,000	0		0		18		0		Forward contracts - sell Australian Dollars	Cash flow	11/2021	A$	4,000	—		—		18		—
Interest rate swaps	Interest rate swaps	Cash flow	1/2024	$	225,000	0		0		4,407		5,534		Interest rate swaps	Cash flow	1/2024	$	225,000	—		—		4,407		5,534
Subtotal	Subtotal					0		33		9,363		5,555		Subtotal					—		33		9,363		5,555

Derivatives not designated under hedge accounting	Derivatives not designated under hedge accounting													Derivatives not designated under hedge accounting
Cross-currency debt swaps - Euro	Cross-currency debt swaps - Euro	(1)	04/2022	€	6,000	0		0		0		817		Cross-currency debt swaps - Euro	(1)	4/2022	€	6,000	—		—		—		817
Cross-currency debt swaps - Pounds	Cross-currency debt swaps - Pounds	(1)	04/2022	£	4,500	0		0		0		756		Cross-currency debt swaps - Pounds	(1)	4/2022	£	4,500	—		—		—		756
Subtotal	Subtotal					0		0		0		1,573		Subtotal					—		—		—		1,573
Total fair value	Total fair value					$	0	$	33	$	9,363	$	7,128	Total fair value					$	—	$	33	$	9,363	$	7,128

(1)These cross-currency debt swaps, for which we have not elected hedge accounting, adjust the currency denomination of a portion of our outstanding debt to the Euro and British Pound, as applicable, for the notional amounts reported, creating an economic hedge against currency movements.

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The pre-tax effects of derivative instruments designated as cash flow hedges were as follows for the periods presented:


		Three Months Ended May 31,				Three Months Ended November 30,
		Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income		Gain (Loss) Recognized in AOCI			Gain (Loss) Reclassified from AOCI into Income
(in thousands)	(in thousands)	2021			Location		2021			(in thousands)	2021		Location	2021
Foreign currency contracts - cash flow hedges	Foreign currency contracts - cash flow hedges	$	(3,191)		Sales revenue, net		$	(1,226)		Foreign currency contracts - cash flow hedges	$	3,686	Sales revenue, net	$	(354)
Interest rate swaps - cash flow hedges	Interest rate swaps - cash flow hedges	(290)			Interest expense		(1,284)			Interest rate swaps - cash flow hedges	1,045		Interest expense	(1,300)

Total	Total	$	(3,481)				$	(2,510)		Total	$	4,731		$	(1,654)

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		Three Months Ended May 31,					Three Months Ended November 30,
		Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income			Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income
(in thousands)	(in thousands)	2020		Location	2020			(in thousands)		2020		Location	2020
Foreign currency contracts - cash flow hedges	Foreign currency contracts - cash flow hedges	$	1,604	SG&A	$	765		Foreign currency contracts - cash flow hedges		$	452	SG&A	$	(549)
Interest rate swaps - cash flow hedges	Interest rate swaps - cash flow hedges	(4,133)		Interest expense	(726)			Interest rate swaps - cash flow hedges		250		Interest expense	(1,289)

Total	Total	$	(2,529)		$	39		Total		$	702		$	(1,838)


	Nine Months Ended November 30,
	Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income
(in thousands)	2021			Location	2021
Foreign currency contracts - cash flow hedges	$	5,951		Sales revenue, net	$	(2,441)
Interest rate swaps - cash flow hedges	821			Interest expense	(3,934)


Total	$	6,772			$	(6,375)


	Nine Months Ended November 30,
	Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income
(in thousands)	2020		Location	2020
Foreign currency contracts - cash flow hedges	$	(5,405)	SG&A	$	124
Interest rate swaps - cash flow hedges	(4,132)		Interest expense	(3,222)


Total	$	(9,537)		$	(3,098)

The pre-tax effects of derivative instruments not designated under hedge accounting were as follows for the periods presented:


		Three Months Ended May 31,						Gain (Loss) Recognized in Income
		Gain (Loss) Recognized in Income							Three Months Ended November 30,				Nine Months Ended November 30,
(in thousands)	(in thousands)	Location	2021		2020		(in thousands)	Location	2021		2020		2021		2020
Cross-currency debt swaps - principal	Cross-currency debt swaps - principal	SG&A	(129)		(149)		Cross-currency debt swaps - principal	SG&A	$	575	$	23	$	915	$	(1,075)
Cross-currency debt swaps - interest	Cross-currency debt swaps - interest	Interest expense	(2)		74		Cross-currency debt swaps - interest	Interest expense	(1)		(2)		(3)		72
Total	Total		$	(131)	$	(75)	Total		$	574	$	21	$	912	$	(1,003)

We expect a net ~~loss~~gain of ~~$10.2~~$0.4 million associated with foreign currency contracts and interest rate swaps currently reported in AOCI to be reclassified into income over the next twelve months. The amount ultimately realized, however, will differ as exchange rates and interest rates change and the underlying contracts settle. See Notes 10 and 12 to these condensed consolidated financial statements for more information.

Counterparty Credit Risk

Financial instruments, including foreign currency contracts, cross-currency debt swaps and interest rate swaps, expose us to counterparty credit risk for non-performance. We manage our exposure to counterparty credit risk by only dealing with counterparties who are substantial international financial

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institutions with significant experience using such derivative instruments. We believe that the risk of incurring credit losses is remote.

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Note 12 - Accumulated Other Comprehensive Income (Loss)

The changes in AOCI by component and related tax effects for the periods presented were as follows:


(in thousands)	(in thousands)	Interest Rate Swaps		Foreign Currency Contracts		Total		(in thousands)	Interest Rate Swaps		Foreign Currency Contracts		Total
Balance at February 29, 2020	Balance at February 29, 2020	$	(8,199)	$	1,194	$	(7,005)	Balance at February 29, 2020	$	(8,199)	$	1,194	$	(7,005)
Other comprehensive (loss) income before reclassification		(4,133)		1,604		(2,529)
Amounts reclassified out of AOCI		726		(765)		(39)
Tax effects		800		(144)		656
Other comprehensive (loss) income		(2,607)		695		(1,912)
Balance at May 31, 2020		$	(10,806)	$	1,889	$	(8,917)

Balance at February 28, 2021		$	(7,576)	$	(4,080)	$	(11,656)
Other comprehensive loss before reclassification	Other comprehensive loss before reclassification	(290)		(3,191)		(3,481)		Other comprehensive loss before reclassification	(4,132)		(5,405)		(9,537)
Amounts reclassified out of AOCI	Amounts reclassified out of AOCI	1,284		1,226		2,510		Amounts reclassified out of AOCI	3,222		(124)		3,098
Tax effects	Tax effects	(237)		411		174		Tax effects	214		945		1,159
Other comprehensive income (loss)		757		(1,554)		(797)
Balance at May 31, 2021		$	(6,819)	$	(5,634)	$	(12,453)
Other comprehensive loss								Other comprehensive loss	(696)		(4,584)		(5,280)
Balance at November 30, 2020								Balance at November 30, 2020	$	(8,895)	$	(3,390)	$	(12,285)

Balance at February 28, 2021								Balance at February 28, 2021	$	(7,576)	$	(4,080)	$	(11,656)
Other comprehensive income before reclassification								Other comprehensive income before reclassification	821		5,951		6,772
Amounts reclassified out of AOCI								Amounts reclassified out of AOCI	3,934		2,441		6,375
Tax effects								Tax effects	(1,132)		(1,425)		(2,557)
Other comprehensive income								Other comprehensive income	3,623		6,967		10,590
Balance at November 30, 2021								Balance at November 30, 2021	$	(3,953)	$	2,887	$	(1,066)

See Notes 9, 10 and 11 to these condensed consolidated financial statements for additional information regarding our cash flow hedges.

Note 13 - Segment Information

The following tables summarize segment information for the periods presented:


		Three Months Ended May 31, 2021									Three Months Ended November 30, 2021
(in thousands)	(in thousands)	Housewares		Health & Home		Beauty		Total		(in thousands)	Housewares		Health & Home		Beauty		Total
Sales revenue, net	Sales revenue, net	$	193,644	$	204,096	$	143,483	$	541,223	Sales revenue, net	$	246,135	$	203,900	$	174,849	$	624,884
Restructuring charges	Restructuring charges	0		0		6		6		Restructuring charges	—		—		5		5
Operating income	Operating income	27,143		11,249		26,443		64,835		Operating income	43,239		13,573		33,228		90,040
Capital and intangible asset expenditures	Capital and intangible asset expenditures	2,987		748		271		4,006		Capital and intangible asset expenditures	16,159		633		783		17,575
Depreciation and amortization	Depreciation and amortization	2,548		2,726		3,439		8,713		Depreciation and amortization	2,894		2,529		3,218		8,641

Three Months Ended May 31, 2020
(in thousands) Housewares Health & Home Beauty Total
Sales revenue, net $ 140,628 $ 199,956 $ 80,251 $ 420,835
Restructuring charges 238 0 95 333
Operating income 23,233 31,533 2,213 56,979
Capital and intangible asset expenditures 2,717 3,408 326 6,451
Depreciation and amortization 2,122 4,052 2,966 9,140


	Three Months Ended November 30, 2020
(in thousands)	Housewares		Health & Home		Beauty		Total
Sales revenue, net	$	222,400	$	250,158	$	165,179	$	637,737
Restructuring charges	(12)		—		—		(12)

Operating income	37,658		30,478		32,573		100,709
Capital and intangible asset expenditures	1,375		2,441		370		4,186
Depreciation and amortization	2,371		4,106		3,042		9,519

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	Nine Months Ended November 30, 2021
(in thousands)	Housewares		Health & Home		Beauty		Total
Sales revenue, net	$	654,997	$	549,475	$	436,863	$	1,641,335
Restructuring charges	369		—		11		380
Operating income	112,303		29,616		80,247		222,166
Capital and intangible asset expenditures	36,196		3,613		1,720		41,529
Depreciation and amortization	8,257		7,879		9,946		26,082


	Nine Months Ended November 30, 2020
(in thousands)	Housewares		Health & Home		Beauty		Total
Sales revenue, net	$	564,891	$	661,568	$	362,965	$	1,589,424
Restructuring charges	251		—		104		355

Operating income	106,294		95,782		54,887		256,963
Capital and intangible asset expenditures	6,912		10,346		2,165		19,423
Depreciation and amortization	6,743		12,331		8,921		27,995

Note 14 - Income Taxes

We reorganized the Company in Bermuda in 1994 and many of our foreign subsidiaries are not directly or indirectly owned by a U.S. parent. As such, a large portion of our foreign income is not subject to U.S. taxation on a permanent basis under current law. Additionally, our intellectual property is largely owned by foreign subsidiaries, resulting in proportionally higher earnings in jurisdictions with lower statutory tax

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rates, which decreases our overall effective tax rate. The taxable income earned in each jurisdiction, whether U.S. or foreign, is determined by the subsidiary's operating results and transfer pricing and tax regulations in the related jurisdictions.

For interim periods, our income tax expense and resulting effective tax rate are based upon an estimated annual effective tax rate adjusted for the effects of items required to be treated as discrete to the period, including changes in tax laws, changes in estimated exposures for uncertain tax positions and other items.

On March 11, 2021, the American Rescue Plan Act (the ~~“ARM”~~“ARP”) was enacted and signed into law. The ~~ARM~~ARP is an economic stimulus package in response to the COVID-19 outbreak which contains tax provisions that did not have a material impact to our condensed consolidated financial statements.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted and signed into law. The CARES Act is an emergency economic stimulus package in response to the COVID-19 outbreak that contains numerous tax provisions. Among other things, the CARES Act included technical corrections to the effective date language in the Tax Cuts and Jobs Act, enacted into law on December 22, 2017 (the “Tax Act”), related to net operating loss carrybacks.

Upon the enactment of the Tax Act in fiscal 2018, there was a net operating loss on our balance sheet, which was measured using the U.S. statutory tax rate in effect prior to enactment. As a result of the Tax Act, we were required to record a one-time charge of $17.9 million in fiscal 2018, which included a charge of $9.4 million to remeasure the net operating loss at the reduced rate at which it was expected to reverse in the future. The CARES Act effectively reversed the impact of the Tax Act on our net operating loss, resulting in a corresponding tax benefit of $9.4 million recorded in the first quarter of fiscal 2021.

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year period, partially offset by shifts in the mix of income in our various tax jurisdictions. For the nine months ended November 30, 2021, income tax ~~benefit~~expense as a percentage of ~~13.0%~~income before income tax was 13.6% compared to 6.5% for the same period last year, primarily due to the mix of income in our various tax jurisdictions and the benefit of the CARES Act in fiscal ~~2021. Income tax expense for the three months ended May 31,~~ 2021, ~~is driven~~partially offset by the ~~mix~~favorable comparative impact of ~~taxable income~~increases in ~~our various~~liabilities related to uncertain tax ~~jurisdictions and excess tax benefits associated with share-based compensation recognized~~positions in the ~~period in which it is settled.~~

Our Macau subsidiary generates income from the sale of the goods that it has sourced and procured. This subsidiary is responsible for the sourcing and procurement of a large portion of the products that we sell. We previously had an indefinite tax holiday in Macau conditioned on the subsidiary meeting certain

~~employment and investment thresholds. The Macau Offshore Law and its supplementary regulations that~~

grant tax incentives to approved offshore institutions was abolished on January 1, 2021. Existing approved offshore institutions such as ours continued to operate under the offshore regime until the end of the calendarprior year 2020. Beginning in calendar year 2021, our Macau subsidiary transitioned to onshore status and is now subject to a statutory corporate income tax of 12%. Because our Macau subsidiary is not directly or indirectly owned by a U.S. parent, there is 0 U.S. tax liability associated with the income generated in Macau.period.

Note 15 - Earnings Per Share

We compute basic earnings per share using the weighted average number of shares of common stock outstanding during the period. We compute diluted earnings per share using the weighted average number of shares of common stock outstanding plus the effect of dilutive securities. Dilutive securities at any given point in time may consist of outstanding options to purchase common stock and issued and contingently issuable unvested restricted stock units, performance stock units, restricted stock awards and performance restricted stock awards and other stock based awards. Anti-dilutive securities are not included in the computation of diluted earnings per share under the treasury stock method. See Note 5

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to these condensed consolidated financial statements for more information regarding stock-based awards.

The following table presents our weighted average basic and diluted shares outstanding for the periods shown:


		Three Months Ended May 31,			Three Months Ended November 30,		Nine Months Ended November 30,
(in thousands)	(in thousands)	2021	2020	(in thousands)	2021	2020	2021	2020
Weighted average shares outstanding, basic	Weighted average shares outstanding, basic	24,349	25,254	Weighted average shares outstanding, basic	24,129	24,965	24,193	25,182
Incremental shares from share-based compensation arrangements	Incremental shares from share-based compensation arrangements	287	143	Incremental shares from share-based compensation arrangements	270	227	268	168
Weighted average shares outstanding, diluted	Weighted average shares outstanding, diluted	24,636	25,397	Weighted average shares outstanding, diluted	24,399	25,192	24,461	25,350

Anti-dilutive securities	Anti-dilutive securities	0	262	Anti-dilutive securities	20	4	16	149

Note 16 - Subsequent Events

~~Divestiture of Personal Care Business~~

On ~~June 7,~~December 29, 2021, we completed the ~~sale~~acquisition of ~~our Personal Care business, not~~Osprey Packs, Inc., a longtime U.S. leader in technical and everyday packs. The total purchase consideration, net of cash acquired, was $414.7 million in cash, including the ~~Latin America~~impact of a $5.3 million favorable customary closing net working capital adjustment. The acquisition was funded with cash on hand and ~~Caribbean regions,~~a $435.0 million borrowing under our existing revolving credit facility. After giving effect to ~~HRB Brands LLC,~~the borrowing, as of December 29, 2021, the remaining amount available for ~~$44.7~~borrowings under our Credit Agreement was $351.8 million. The initial accounting for this business combination is in process. We incurred acquisition-related expenses of $1.6 million ~~in cash. The sale also includes an option that provides HRB Brands LLC~~during the ~~right to purchase the Latin America and Caribbean Personal Care businesses no later than the end~~third quarter of fiscal 2022, ~~subject to meeting certain agreed-upon conditions. The carrying amount of the identified assets and liabilities~~which were recognized in SG&A within ~~the disposal group were classified as held for sale as of May 31, 2021. The transaction is not reflected in~~ our condensed consolidated ~~financial~~ statements as of ~~and for the period ended May 31, 2021. See Note 3 for additional information.~~income.

1921

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our condensed consolidated financial statements included under Part I, Item 1., “Financial Statements.” The various sections of this MD&A contain a number of forward-looking statements, all of which are based on our current expectations. Actual results may differ materially due to a number of factors, including those discussed in Part II, Item 1A.,“Risk Factors,” and in the section entitled “Information Regarding Forward-Looking Statements” following this MD&A, and in Part I, Item 3., “Quantitative and Qualitative Disclosures About Market Risk” in this report, as well as in Part II, Item IA., “Risk Factors” in the Company’s most recent annual report on Form 10-K for the fiscal year ended February 28, 2021 (“Form 10-K”) and its other filings with the Securities and Exchange Commission (the “SEC”). When used in this MD&A, unless otherwise indicated or the context suggests otherwise, references to “the Company”, “our Company”, “Helen of Troy”, “we”, “us”, or “our” refer to Helen of Troy Limited and its subsidiaries. Throughout this MD&A, we refer to our Leadership Brands, which are brands that have number-one and number-two positions in their respective categories and include OXO, Honeywell, Braun, PUR, Hydro Flask, Vicks, Hot Tools and Drybar.

This MD&A, including the tables under the headings “Operating Income, Operating Margin, Adjusted Operating Income (non-GAAP), and Adjusted Operating Margin (non-GAAP) by Segment” and “Net Income, Diluted EPS, Adjusted Income (non-GAAP), and Adjusted Diluted EPS (non-GAAP),” reports operating income, operating margin, net income and diluted earnings per share (“EPS”) without the impact of acquisition-related expenses, EPA compliance costs, restructuring charges, tax reform, amortization of intangible assets, and non-cash share-based compensation for the periods presented, as applicable. These measures may be considered non-GAAP financial information as set forth in SEC Regulation G, Rule 100. The tables reconcile these measures to their corresponding GAAP-based measures presented in our condensed consolidated statements of income. We believe that adjusted operating income, adjusted operating margin, adjusted income, and adjusted diluted EPS provide useful information to management and investors regarding financial and business trends relating to our financial condition and results of operations. We believe that these non-GAAP financial measures, in combination with our financial results calculated in accordance with GAAP, provide investors with additional perspective regarding the impact of such charges and benefits on applicable income, margin and earnings per share measures. We also believe that these non-GAAP measures facilitate a more direct comparison of our performance to our competitors. We further believe that including the excluded charges and benefits would not accurately reflect the underlying performance of our operations for the period in which the charges and benefits are incurred, even though such charges and benefits may be incurred and reflected in our GAAP financial results in the near future. The material limitation associated with the use of the non-GAAP financial measures is that the non-GAAP measures do not reflect the full economic impact of our activities. Our adjusted operating income, adjusted operating margin, adjusted income, and adjusted diluted EPS are not prepared in accordance with GAAP, are not an alternative to GAAP financial information and may be calculated differently than non-GAAP financial information disclosed by other companies. Accordingly, undue reliance should not be placed on non-GAAP information. These non-GAAP measures are discussed further and reconciled to their applicable GAAP-based measures contained in this MD&A beginning on page ~~30.~~37.

There were no material changes to the key financial measures discussed in our Form 10-K.

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Overview

We incorporated as Helen of Troy Corporation in Texas in 1968 and were reorganized as Helen of Troy Limited in Bermuda in 1994. We are a leading global consumer products company offering creative products and solutions for our customers through a diversified portfolio of brands. We have built leading market positions through new product innovation, product quality and competitive pricing. We currently operate in three segments consisting of Housewares, Health & Home, and Beauty.

In fiscal 2015, we launched a five-year transformational strategy designed to improve the performance of our business segments and strengthen our shared service capabilities. Fiscal 2019 marked the completion of Phase I of our multi-year transformation strategy, which delivered performance across a wide range of measures. We improved organic sales growth by focusing on our Leadership Brands, made strategic acquisitions, became a more efficient operating company with strong global shared services, upgraded our organization and culture, improved inventory turns and return on invested capital, and returned capital to shareholders.

Fiscal 2020 began Phase II of our transformation, which is designed to drive the next five years of progress. The long-term objectives of Phase II include improved organic sales growth, continued margin expansion, and strategic and effective capital deployment. Phase II includes continued investment in our Leadership Brands, with a focus on growing them through consumer-centric innovation, expanding them more aggressively outside the United States of America (the “U.S.”), and adding new brands through acquisition. We are building further shared service capability and operating efficiency, as well as focusing on attracting, retaining, unifying and training the best people. Additionally, we are enhancing and consolidating our environmental, social and governance efforts and accelerating programs related to diversity, equity and inclusion to support our Phase II transformation.

In fiscal 2018, we announced a restructuring plan (referred to as “Project Refuel”) intended to enhance the performance primarily in the Beauty and former Nutritional Supplements segments. Project Refuel includes charges for a reduction-in-force and the elimination of certain contracts. During the first quarter of fiscal 2019, we expanded Project Refuel to include the realignment and streamlining of our supply chain structure. We are targeting total annualized profit improvements of approximately $10.5 million to $12.5 million over the duration of the plan. We estimate the plan to be completed during fiscal 2022 and expect to incur total restructuring charges of approximately $10.3 million over the duration of the plan, of which ~~$9.2~~$9.6 million ~~was~~have been incurred through the ~~first~~third quarter of fiscal 2022. See Note 7 to the accompanying

condensed consolidated financial statements for additional information.

Consistent with our strategy of focusing resources on our Leadership Brands, during the fourth quarter of fiscal 2020, we committed to a plan to divest certain assets within our Beauty segment's mass channel personal care business, (“Personal Care”). The net assets to be disposed of include intangible assets, inventory, certain net trade receivables, fixed assets and certain accrued sales discounts and allowances relating to our mass channel liquids,which included liquid, powder and aerosol products under brands such as Pert, Brut, Sure and ~~Infusium. Accordingly, we classified the identified net assets of the disposal group as held for sale.~~Infusium (“Personal Care”). On June 7, 2021, we completed the sale of our Personal Care business, not including the Latin America and Caribbean regions, to HRB Brands LLC, for $44.7 million in cash. The net assets sold included intangible assets, inventory, certain net trade receivables, fixed assets and certain accrued sales discounts and allowances relating to our North America Personal Care business. During the second quarter of fiscal 2022, we recognized a gain on the sale ~~also includes an option that provides HRB Brands LLC~~in selling, general and administrative expense (“SG&A”) totaling $0.5 million. We are continuing to negotiate the ~~right to purchase~~sale of the Latin America and Caribbean Personal Care businesses to HRB Brands LLC, which we expect to close no later than the end of fiscal ~~2022, subject~~2022. Accordingly, we have continued to ~~meeting certain agreed-upon conditions.~~classify the identified net assets of the Latin America and Caribbean Personal Care businesses as held for sale. See Note 3 ~~and Note 16~~ to the accompanying condensed consolidated financial statements for additional information.

Subsequent to the end of our third quarter, on December 29, 2021, we completed the acquisition of Osprey Packs, Inc. (“Osprey”), a longtime U.S. leader in technical and everyday packs. The total

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purchase consideration, net of cash acquired, was $414.7 million in cash, including the impact of a $5.3 million favorable customary closing net working capital adjustment. The acquisition was funded with cash on hand and borrowings from our existing revolving credit facility. We incurred acquisition-related expenses of $1.6 million during the third quarter of fiscal 2022, which were recognized in SG&A within our condensed consolidated statements of income.

Significant Trends Impacting the Business

Impact of COVID-19

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) to be a pandemic. The effects of the COVID-19 pandemic have had an unfavorable impact on certain parts of our business. The impact includes the effect of temporary closures of certain customer stores, or limited hours of operation, and materially lower store traffic, primarily during fiscal 2021. Additionally, COVID-19 has disrupted certain parts of our supply chain. Surges in demand and shifts in shopping patterns related to COVID-19, as well as other factors, have strained the global freight network, which is resulting in higher costs, less capacity, and longer lead times. These factors may impact our ability to fulfill some orders on a timely basis. Additionally, the extent of COVID-19’s impact on the demand for certain of our product lines in the future will depend on future developments, including the duration, spread and intensity of the pandemic, our continued ability to source and distribute our products, as well as any future government actions affecting consumers and the global economy generally, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. Accordingly, our liquidity and financial results could be impacted in ways that we are not able to predict today.

Future developments are outside of our control, are highly uncertain and cannot be predicted. If the COVID-19 impact or potential economic downturn is prolonged, then it can further increase the difficulty of planning for operations. These and other potential impacts of the current public health crisis could therefore materially and adversely affect our business, financial condition, cash flows and results of operations.

Global Supply Chain and Cost Inflation Trends

Surges in demand and shifts in shopping patterns related to COVID-19, as well as other factors, have continued to strain the global supply chain network, which has resulted in carrier-imposed capacity restrictions, carrier delays, and longer lead times. Demand for Chinese imports has caused shipment receiving and unloading backlogs at many U.S. ports that have been unable to keep pace with unprecedented inbound container volume. The situation has been further exacerbated by COVID-19 illness and protocols at many port locations. Due to the backlog and increasing trade imbalance with China, many shipping containers are not being sent back to China, or are being sent to China empty. With continued increases in demand for containers, limited supply and freight vendors bearing the cost of shipping empty containers, the market cost of inbound freight has increased by several multiples compared to calendar year 2020 averages. In addition to increasing cost trends, our third party manufacturing partners are not equipped to hold meaningful amounts of inventory and if shipping container capacity remains limited or unavailable, they could pause manufacturing, which could ultimately impact our ability to meet consumer demand on a timely basis. Demand for raw materials, components and semiconductor chips impacted by the supply chain challenges described above have created surges in prices and shortages of these materials may become more significant which could further increase our costs. Further, in the U.S., the surge in demand along with COVID-19 related government stimulus and rising hourly labor wages, ~~are creating~~have created labor shortages and higher labor costs. The majority of our hourly labor is employed in our distribution centers and these factors may increase our costs and negatively impact our ability to attract and retain qualified associates.

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EPA Compliance Costs

Some of our product lines within our Health & Home segment are subject to product identification, labeling and claim requirements, which are monitored and enforced by regulatory agencies, such as the U.S. Environmental Protection Agency (the “EPA”), U.S. Customs and Border Protection, the U.S. Food and Drug Administration, and the U.S. Consumer Product Safety Commission.

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Health & Home segment that are sold in the U.S. The EPA ~~has~~did not ~~raised~~raise any product quality, safety or performance issues. ~~We expect these products to be available for distribution with the only changes being modified labeling or different packaging.~~ As a result of these packaging compliance discussions, on May 27, 2021, we voluntarily implemented a temporary stop shipment action across this line of products in the U.S. ~~while~~as we ~~ensure that all labeling is in compliance and we work~~worked with the EPA towards an expedient resolution. ~~The~~In July 2021, the EPA ~~has~~ approved modest changes to our labeling claims on ~~our~~packaging of existing water filtration ~~packaging,~~products, which we ~~have begun to implement. We resumed shipment~~implemented, and subsequently began shipping in limited quantities during the second quarter of fiscal 2022. The shipping volume for these products has continued to increase and, ~~are actively working towards similar agreements regarding~~in September 2021, we returned to a more normalized level of shipping activity. In August 2021, the EPA approved changes to our air filtration packaging and ~~humidification packaging in continued collaboration with the EPA. At our request, the EPA issued~~we implemented a Stop Sale, Use or Removal Order on June 29, 2021, which, among other things, allows for the movement of certain of our products among our warehouses and will facilitate rework of the affected air filtration packaging once agreed to with the EPA. We ~~believe this is meaningful progress towards a final resolution with the EPA. The stop shipment will remain in effect until we implement an approved labeling and~~ repackaging plan. We began shipping limited quantities of the impacted products at the end of August 2021 and returned to a more normalized level of shipping activity in November 2021. We have also resolved the majority of the packaging compliance concerns on the limited subset of humidifier products and do not expect ~~that~~them to have a material impact on our consolidated financial results.Our consolidated and Health & Home segment’s ~~fiscal 2022~~ net sales revenue, gross profit and operating income ~~will be~~for the nine months ended November 30, 2021, have been materially and adversely impacted by the stop ~~shipment.~~shipment actions and the time needed to execute repackaging plans after changes were approved by the EPA. While we have resumed normalized levels of shipping of the affected inventory, we are still in process of executing our repackaging plans. If we are not able to execute our repackaging plans on schedule to meet demand, our net sales revenue, gross profit and operating income could continue to be materially and adversely impacted. The extent to which net sales revenue, ~~will~~gross profit and operating income could be impacted will primarily depend on product demand and the duration of time required ~~for~~to repackage the ~~EPA to act on our proposed solutions and the related implementation schedule.~~affected inventory. In addition, our net sales revenue could be materially and adversely impacted by customer returns, an increase in sales discounts and allowances and by the potential impact of distribution losses at certain retailers.

During the first quarter of fiscal 2022, we recorded a $13.1 million charge to cost of goods sold to write-off the obsolete packaging for the affected products in our inventory on-hand and in-transit as of the end of the first quarter of fiscal 2022. ~~The charge was~~During the second and third quarters of fiscal 2022, we incurred additional compliance costs of $3.0 million and $4.9 million, respectively, comprised of incremental warehouse storage costs and legal fees of $2.6 million and $4.6 million, respectively, which were recognized in SG&A, and storage and obsolete packaging charges from vendors of $0.4 million and $0.3 million, respectively, which were recognized in cost of goods ~~sold and is~~sold. These charges are referred to throughout this Form 10-Q as “EPA compliance costs.”In addition, during the second and third quarters of fiscal 2022, we incurred and capitalized into inventory costs to repackage a portion of our existing inventory of the affected products and expect to continue to incur and capitalize such costs as we continue to repackage the remainder of the inventory during the fourth quarter of fiscal 2022.We also expect to incur additional compliance costs, which may include ~~costs to relabel or repackage our existing inventory as well as~~ incremental freight, ~~and~~warehouse storage costs, charges from vendors, and legal fees, among other things. ~~Costs to repackage our existing inventory will be capitalized into inventory; however, many of the other~~Such potential incremental EPA compliance costs will be expensed as incurred and could materially and adversely impact our consolidated and Heath & Home segment's gross profit and operating income. Additional impacts or more pronounced adverse impacts may arise that we are not currently aware of today. Accordingly, our business, results of operations and financial condition could be adversely and materially impacted ~~by our actions or~~ in ways that we are not able to predict today.

At this time, we are not aware of any fines or penalties related to this matter imposed against us by the EPA. While we do not anticipate material fines or penalties, there can be no assurances that such fines or penalties will not be imposed.

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See Note 8 to our condensed consolidated financial statements for additional information and Part II, Item 1A., “Risk Factors” in this Form 10-Q for additional information on our related material risks.

Potential Impact of Tariffs

~~During fiscal 2021, 2020 and~~Since 2019, the Office of the U.S. Trade Representative (“USTR”) has imposed, and in certain cases subsequently reduced or removed, additional tariffs on products imported from China. We purchase a high concentration of our products from unaffiliated manufacturers located in China. This concentration exposes us to risks associated with doing business globally, including changes in tariffs. Any alteration of trade agreements and terms between China and the U.S., including limiting trade with China, imposing additional tariffs on imports from China and potentially imposing other restrictions on exports from China to the U.S. may result in further and/or higher tariffs or retaliatory trade measures by China. Furthermore, in certain cases, we have been successful in obtaining tariff exclusions from the USTR on certain products that we import. These exclusions generally expire after a designated period of time. In the case that a tariff exclusion is not granted or extended, higher tariffs would be assessed on the related products.

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Foreign Currency Exchange Rate Fluctuations

Due to the nature of our operations, we have exposure to the impact of fluctuations in exchange rates from transactions that are denominated in a currency other than our functional currency (the U.S. Dollar). Such transactions include sales, certain inventory purchases and operating expenses. The most significant currencies affecting our operating results are the British Pound, Euro, Canadian Dollar, and Mexican Peso.

For the three months ended ~~May 31,~~November 30, 2021, changes in foreign currency exchange rates had a favorable year-over-year impact on consolidated U.S. Dollar reported net sales revenue of approximately ~~$5.5~~$1.2 million, or ~~1.3%~~0.2%, compared to $1.7 million, or 0.4% for the same period last year. For the nine months ended November 30, 2021, changes in foreign currency exchange rates had a favorable year-over-year impact on consolidated U.S. Dollar reported net sales revenue of approximately $8.8 million, or 0.6%, compared to an unfavorable impact of ~~$4.8~~$3.2 million, or ~~1.3%~~0.3% for the same period last year.

Consumer Spending and Changes in Shopping Preferences

Our business depends upon discretionary consumer demand for most of our products and primarily operates within mature and highly developed consumer markets. The principal driver of our operating performance is the strength of the U.S. retail economy. Approximately ~~75%~~79% and ~~77%~~80% of our consolidated net sales revenue ~~were~~was from U.S. shipments during the three month periods ended ~~May 31,~~November 30, 2021 and 2020, respectively. For the nine month periods ended November 30, 2021 and 2020, U.S. shipments were approximately 77% and 79% of our consolidated net sales revenue.

Our concentration of sales reflects the evolution of consumer shopping preferences to online or multichannel shopping experiences. Our net sales to retail customers fulfilling end-consumer online orders and online sales directly to consumers comprised approximately 23% and 22% of our total consolidated net sales revenue for the three and nine month periods ended November 30, 2021, respectively, and both declined approximately 7%, compared to the same periods in the prior year.

For the three and nine month periods ended ~~May 31, 2021 and~~November 30, 2020, our net sales to retail customers fulfilling end-consumer online orders and online sales directly to consumers comprised approximately ~~22%~~24% and ~~28%~~25%, respectively, of our total consolidated net sales revenue, and grew approximately 4%34% and 33%, respectively, ~~over~~compared to the same periods in the prior ~~years.~~year.

With the continued growth in online sales across the retail landscape, many brick and mortar retailers are aggressively looking for ways to improve their customer delivery capabilities to be able to meet customer expectations. As a result, it will become increasingly important for us to leverage our distribution

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capabilities in order to meet the changing demands of our customers, as well as to increase our online capabilities to support our direct-to-consumer sales channels and online channel sales by our retail customers.

Variability of the Cough/Cold/Flu Season

Sales in several of our Health & Home segment categories are highly correlated to the severity of winter weather and cough/cold/flu incidence. In the U.S., the cough/cold/flu season historically runs from November through March, with peak activity normally in January to March. The 2020-2021 cough/cold/flu season experienced historically low incidence levels due to COVID-19 prevention measures including mask-wearing, remote learning, work from home, and reduced travel, brick and mortar shopping, and group gatherings. For the 2019-2020 season, cough/cold/flu incidence was slightly higher than the

2018-2019 season, which was a below average season.

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RESULTS OF OPERATIONS

The following ~~table provides~~tables provide selected operating data, in U.S. Dollars, as a percentage of net sales

revenue, and as a year-over-year percentage change.


		Three Months Ended May 31,								% of Sales Revenue, net					Three Months Ended November 30,								% of Sales Revenue, net
(in thousands)	(in thousands)	2021		2020		$ Change		% Change		2021		2020		(in thousands)	2021		2020		$ Change		% Change		2021		2020
Sales revenue by segment, net	Sales revenue by segment, net													Sales revenue by segment, net
Housewares	Housewares	$	193,644	$	140,628	$	53,016	37.7	%	35.8	%	33.4	%	Housewares	$	246,135	$	222,400	$	23,735	10.7	%	39.4	%	34.9	%
Health & Home	Health & Home	204,096		199,956		4,140		2.1	%	37.7	%	47.5	%	Health & Home	203,900		250,158		(46,258)		(18.5)	%	32.6	%	39.2	%
Beauty	Beauty	143,483		80,251		63,232		78.8	%	26.5	%	19.1	%	Beauty	174,849		165,179		9,670		5.9	%	28.0	%	25.9	%
Total sales revenue, net	Total sales revenue, net	541,223		420,835		120,388		28.6	%	100.0	%	100.0	%	Total sales revenue, net	624,884		637,737		(12,853)		(2.0)	%	100.0	%	100.0	%
Cost of goods sold	Cost of goods sold	320,631		241,534		79,097		32.7	%	59.2	%	57.4	%	Cost of goods sold	351,051		350,410		641		0.2	%	56.2	%	54.9	%
Gross profit	Gross profit	220,592		179,301		41,291		23.0	%	40.8	%	42.6	%	Gross profit	273,833		287,327		(13,494)		(4.7)	%	43.8	%	45.1	%
Selling, general and administrative expense (“SG&A”)		155,751		121,989		33,762		27.7	%	28.8	%	29.0	%
SG&A														SG&A	183,788		186,630		(2,842)		(1.5)	%	29.4	%	29.3	%

Restructuring charges	Restructuring charges	6		333		(327)		(98.2)	%	—	%	0.1	%	Restructuring charges	5		(12)		17		*		—	%	—	%
Operating income	Operating income	64,835		56,979		7,856		13.8	%	12.0	%	13.5	%	Operating income	90,040		100,709		(10,669)		(10.6)	%	14.4	%	15.8	%
Non-operating income, net	Non-operating income, net	102		236		(134)		(56.8)	%	—	%	0.1	%	Non-operating income, net	52		93		(41)		(44.1)	%	—	%	—	%
Interest expense	Interest expense	2,995		3,846		(851)		(22.1)	%	0.6	%	0.9	%	Interest expense	3,206		2,926		280		9.6	%	0.5	%	0.5	%
Income before income tax	Income before income tax	61,942		53,369		8,573		16.1	%	11.4	%	12.7	%	Income before income tax	86,886		97,876		(10,990)		(11.2)	%	13.9	%	15.3	%
Income tax expense (benefit)		4,970		(6,917)		11,887		*		0.9	%	(1.6)	%
Income tax expense														Income tax expense	11,203		13,721		(2,518)		(18.4)	%	1.8	%	2.2	%

Net income	Net income	$	56,972	$	60,286	$	(3,314)	(5.5)	%	10.5	%	14.3	%	Net income	$	75,683	$	84,155	$	(8,472)	(10.1)	%	12.1	%	13.2	%

															Nine Months Ended November 30,								% of Sales Revenue, net
(in thousands)														(in thousands)	2021		2020		$ Change		% Change		2021		2020
Sales revenue by segment, net														Sales revenue by segment, net
Housewares														Housewares	$	654,997	$	564,891	$	90,106	16.0	%	39.9	%	35.5	%
Health & Home														Health & Home	549,475		661,568		(112,093)		(16.9)	%	33.5	%	41.6	%
Beauty														Beauty	436,863		362,965		73,898		20.4	%	26.6	%	22.8	%
Total sales revenue, net														Total sales revenue, net	1,641,335		1,589,424		51,911		3.3	%	100.0	%	100.0	%
Cost of goods sold														Cost of goods sold	936,322		892,460		43,862		4.9	%	57.0	%	56.1	%
Gross profit														Gross profit	705,013		696,964		8,049		1.2	%	43.0	%	43.9	%
SG&A														SG&A	482,467		439,646		42,821		9.7	%	29.4	%	27.7	%

Restructuring charges														Restructuring charges	380		355		25		7.0	%	—	%	—	%
Operating income														Operating income	222,166		256,963		(34,797)		(13.5)	%	13.5	%	16.2	%
Non-operating income, net														Non-operating income, net	185		440		(255)		(58.0)	%	—	%	—	%
Interest expense														Interest expense	9,508		9,568		(60)		(0.6)	%	0.6	%	0.6	%
Income before income tax														Income before income tax	212,843		247,835		(34,992)		(14.1)	%	13.0	%	15.6	%
Income tax expense														Income tax expense	28,873		16,061		12,812		79.8	%	1.8	%	1.0	%

Net income														Net income	$	183,970	$	231,774	$	(47,804)	(20.6)	%	11.2	%	14.6	%

* Calculation is not meaningful.

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~~First~~Third Quarter Fiscal 2022 Financial Results

•Consolidated net sales revenue ~~increased 28.6%~~decreased 2.0%, or ~~$120.4~~$12.9 million, to ~~$541.2~~$624.9 million for the three months ended ~~May 31,~~November 30, 2021, compared to ~~$420.8~~$637.7 million for the same period last year.

•Consolidated operating income ~~increased 13.8%~~decreased 10.6%, or ~~$7.9~~$10.7 million, to ~~$64.8~~$90.0 million for the three months ended ~~May 31,~~November 30, 2021, compared to ~~$57.0~~$100.7 million for the same period last year. Consolidated operating margin decreased ~~1.5~~1.4 percentage points to ~~12.0%~~14.4% of consolidated net sales revenue for the three months ended ~~May 31,~~November 30, 2021, compared to ~~13.5%~~15.8% for the same period last year.

•Consolidated adjusted operating income ~~increased 33.6%~~decreased 5.2%, or ~~$23.9~~$5.8 million, to ~~$95.0~~$106.1 million for the three months ended ~~May 31,~~November 30, 2021, compared to ~~$71.1~~$111.9 million for the same period last year. Consolidated adjusted operating margin ~~increased~~decreased 0.6 percentage points to ~~17.5%~~17.0% of consolidated net sales revenue for the three months ended ~~May 31,~~November 30, 2021, compared to ~~16.9%~~17.6% for the same period last year.

•Net income decreased ~~5.5%~~10.1%, or ~~$3.3~~$8.5 million, to ~~$57.0~~$75.7 million for the three months ended ~~May 31,~~November 30, 2021, compared to ~~$60.3~~$84.2 million for the same period last year. Diluted EPS decreased ~~2.5%~~7.2% to ~~$2.31~~$3.10 for the three months ended ~~May 31,~~November 30, 2021, compared to ~~$2.37~~$3.34 for the same period last year.

•Adjusted income ~~increased 33.7%~~decreased 4.4%, or ~~$21.7~~$4.1 million, to ~~$85.8~~$90.6 million for the three months ended ~~May 31,~~November 30, 2021, compared to ~~$64.2~~$94.8 million for the same period last year. Adjusted diluted EPS ~~increased 37.5%~~decreased 1.1% to ~~$3.48~~$3.72 for the three months ended ~~May 31,~~November 30, 2021, compared to ~~$2.53~~$3.76 for the same period last year.

Year-To-Date Fiscal 2022 Financial Results

•Consolidated net sales revenue increased 3.3%, or $51.9 million, to $1,641.3 million for the nine months ended November 30, 2021, compared to $1,589.4 million for the same period last year.

•Consolidated operating income decreased 13.5%, or $34.8 million, to $222.2 million for the nine months ended November 30, 2021, compared to $257.0 million for the same period last year. Consolidated operating margin decreased 2.7 percentage points to 13.5% of consolidated net sales revenue for the nine months ended November 30, 2021, compared to 16.2% for the same period last year.

•Consolidated adjusted operating income decreased 3.1%, or $9.0 million, to $282.5 million for the nine months ended November 30, 2021, compared to $291.5 million for the same period last year. Consolidated adjusted operating margin decreased 1.1 percentage points to 17.2% of consolidated net sales revenue for the nine months ended November 30, 2021, compared to 18.3% for the same period last year.

•Net income decreased 20.6%, or $47.8 million, to $184.0 million for the nine months ended November 30, 2021, compared to $231.8 million for the same period last year. Diluted EPS decreased 17.7% to $7.52 for the nine months ended November 30, 2021, compared to $9.14 for the same period last year.

•Adjusted income decreased 5.5%, or $14.0 million, to $240.9 million for the nine months ended November 30, 2021, compared to $254.9 million for the same period last year. Adjusted diluted

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EPS decreased 2.0% to $9.85 for the nine months ended November 30, 2021, compared to $10.05 for the same period last year.

Consolidated and Segment Net Sales Revenue

The following ~~table summarizes~~tables summarize the impact that Organic business and foreign currency had on our net sales revenue by segment:


		Three Months Ended May 31,													Three Months Ended November 30,
(in thousands)	(in thousands)	Housewares			Health & Home			Beauty			Total			(in thousands)	Housewares			Health & Home			Beauty			Total
Fiscal 2021 sales revenue, net	Fiscal 2021 sales revenue, net	$	140,628		$	199,956		$	80,251		$	420,835		Fiscal 2021 sales revenue, net	$	222,400		$	250,158		$	165,179		$	637,737
Organic business	Organic business	52,127			1,203			61,552			114,882			Organic business	23,601			(46,595)			8,943			(14,051)
Impact of foreign currency	Impact of foreign currency	889			2,937			1,680			5,506			Impact of foreign currency	134			337			727			1,198

Change in sales revenue, net	Change in sales revenue, net	53,016			4,140			63,232			120,388			Change in sales revenue, net	23,735			(46,258)			9,670			(12,853)
Fiscal 2022 sales revenue, net	Fiscal 2022 sales revenue, net	$	193,644		$	204,096		$	143,483		$	541,223		Fiscal 2022 sales revenue, net	$	246,135		$	203,900		$	174,849		$	624,884

Total net sales revenue growth		37.7		%	2.1		%	78.8		%	28.6		%
Total net sales revenue growth (decline)														Total net sales revenue growth (decline)	10.7		%	(18.5)		%	5.9		%	(2.0)		%
Organic business	Organic business	37.1		%	0.6		%	76.7		%	27.3		%	Organic business	10.6		%	(18.6)		%	5.4		%	(2.2)		%
Impact of foreign currency	Impact of foreign currency	0.6		%	1.5		%	2.1		%	1.3		%	Impact of foreign currency	0.1		%	0.1		%	0.4		%	0.2		%


	Nine Months Ended November 30,
(in thousands)	Housewares			Health & Home			Beauty			Total
Fiscal 2021 sales revenue, net	$	564,891		$	661,568		$	362,965		$	1,589,424
Organic business	88,812			(116,302)			70,640			43,150
Impact of foreign currency	1,294			4,209			3,258			8,761

Change in sales revenue, net	90,106			(112,093)			73,898			51,911
Fiscal 2022 sales revenue, net	$	654,997		$	549,475		$	436,863		$	1,641,335

Total net sales revenue growth (decline)	16.0		%	(16.9)		%	20.4		%	3.3		%
Organic business	15.7		%	(17.6)		%	19.5		%	2.7		%
Impact of foreign currency	0.2		%	0.6		%	0.9		%	0.6		%

In the above ~~table,~~tables, Organic business refers to our net sales revenue associated with product lines or brands after the first twelve months from the date the product line or brand was 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.

We define Core business as strategic business that we expect to be an ongoing part of our operations, and Non-Core business as business or net assets (including net assets held for sale) that we expect to divest within a year of its designation as Non-Core. During the fourth quarter of fiscal 2020, we

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committed to a plan to divest certain assets within our Personal Care business. As a result, sales from our Personal Care business are included in Non-Core business for all periods presented. On June 7, 2021, we completed the sale of our North America Personal Care business. Sales from our Latin America and Caribbean Personal Care businesses continue to be included in Non-Core business for all periods presented as the related net assets continue to be classified as held for sale.

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The following ~~table summarizes~~tables summarize the impact that Core business and Non-Core (Personal Care) business had on our net sales revenue by segment:


		Three Months Ended May 31,													Three Months Ended November 30,
(in thousands)	(in thousands)	Housewares			Health & Home			Beauty			Total			(in thousands)	Housewares			Health & Home			Beauty			Total
Fiscal 2021 sales revenue, net	Fiscal 2021 sales revenue, net	$	140,628		$	199,956		$	80,251		$	420,835		Fiscal 2021 sales revenue, net	$	222,400		$	250,158		$	165,179		$	637,737
Core business	Core business	53,016			4,140			64,429			121,585			Core business	23,735			(46,258)			25,266			2,743
Non-Core business (Personal Care)	Non-Core business (Personal Care)	—			—			(1,197)			(1,197)			Non-Core business (Personal Care)	—			—			(15,596)			(15,596)
Change in sales revenue, net	Change in sales revenue, net	53,016			4,140			63,232			120,388			Change in sales revenue, net	23,735			(46,258)			9,670			(12,853)
Fiscal 2022 sales revenue, net	Fiscal 2022 sales revenue, net	$	193,644		$	204,096		$	143,483		$	541,223		Fiscal 2022 sales revenue, net	$	246,135		$	203,900		$	174,849		$	624,884

Total net sales revenue growth (decline)	Total net sales revenue growth (decline)	37.7		%	2.1		%	78.8		%	28.6		%	Total net sales revenue growth (decline)	10.7		%	(18.5)		%	5.9		%	(2.0)		%
Core business	Core business	37.7		%	2.1		%	80.3		%	28.9		%	Core business	10.7		%	(18.5)		%	15.3		%	0.4		%
Non-Core business (Personal Care)	Non-Core business (Personal Care)	—		%	—		%	(1.5)		%	(0.3)		%	Non-Core business (Personal Care)	—		%	—		%	(9.4)		%	(2.4)		%


	Nine Months Ended November 30,
(in thousands)	Housewares			Health & Home			Beauty			Total
Fiscal 2021 sales revenue, net	$	564,891		$	661,568		$	362,965		$	1,589,424
Core business	90,106			(112,093)			106,090			84,103
Non-Core business (Personal Care)	—			—			(32,192)			(32,192)
Change in sales revenue, net	90,106			(112,093)			73,898			51,911
Fiscal 2022 sales revenue, net	$	654,997		$	549,475		$	436,863		$	1,641,335

Total net sales revenue growth (decline)	16.0		%	(16.9)		%	20.4		%	3.3		%
Core business	16.0		%	(16.9)		%	29.2		%	5.3		%
Non-Core business (Personal Care)	—		%	—		%	(8.9)		%	(2.0)		%

Leadership Brand and Other Net Sales Revenue

The following ~~table summarizes~~tables summarize our Leadership Brand and other net sales revenue:


		Three Months Ended May 31,									Three Months Ended November 30,
(in thousands)	(in thousands)	2021		2020		$ Change		% Change		(in thousands)	2021		2020		$ Change		% Change
Leadership Brand sales revenue, net	Leadership Brand sales revenue, net	$	429,056	$	349,030	$	80,026	22.9	%	Leadership Brand sales revenue, net	$	506,982	$	508,210	$	(1,228)	(0.2)	%
All other sales revenue, net	All other sales revenue, net	112,167		71,805		40,362		56.2	%	All other sales revenue, net	117,902		129,527		(11,625)		(9.0)	%
Total sales revenue, net	Total sales revenue, net	$	541,223	$	420,835	$	120,388	28.6	%	Total sales revenue, net	$	624,884	$	637,737	$	(12,853)	(2.0)	%


	Nine Months Ended November 30,
(in thousands)	2021		2020		$ Change		% Change
Leadership Brand sales revenue, net	$	1,329,858	$	1,288,614	$	41,244	3.2	%
All other sales revenue, net	311,477		300,810		10,667		3.5	%
Total sales revenue, net	$	1,641,335	$	1,589,424	$	51,911	3.3	%

Consolidated Net Sales Revenue

Comparison of ~~First~~Third Quarter Fiscal 2022 to ~~First~~Third Quarter Fiscal 2021

Consolidated net sales revenue ~~increased $120.4~~decreased $12.9 million, or ~~28.6%~~2.0%, to ~~$541.2~~$624.9 million, compared to ~~$420.8~~$637.7 million. ~~Growth~~The decline was driven by ana decrease from Organic business ~~increase~~ of ~~$114.9~~$14.1 million, or ~~27.3%~~2.2%, primarily due to:

•a decrease in sales in our Health & Home segment as a result of the EPA packaging compliance matter and related stop shipment actions and stronger COVID-19 driven demand for healthcare

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and healthy living products, primarily in thermometry and air filtration, in the comparative prior year period; and

•a net sales revenue decline in Non-Core business primarily due to the sale of our North America Personal Care business during the second quarter of fiscal 2022.

These factors were partially offset by:

•higher ~~consolidated~~ brick and mortar and online channel sales in our Beauty and Housewares segments due primarily to strong consumer demand, earlier than typical customer orders as retailers accelerated orders into the third quarter to try to avoid supply chain disruptions during the holiday season and the favorable comparative impact of COVID-19 reduced store traffic and a soft back to school season in the prior year period;

•the impact of customer price increases related to rising freight and product costs; and

•higher sales in the club and closeout channels.

Net sales revenue was also favorably impacted by net foreign currency fluctuations of approximately $1.2 million, or 0.2%.

Net sales revenue from our Leadership Brands was $507.0 million, compared to $508.2 million for the same period last year, representing a decline of 0.2%.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Consolidated net sales revenue increased $51.9 million, or 3.3%, to $1,641.3 million, compared to $1,589.4 million. Growth was driven by an increase from Organic business of $43.2 million, or 2.7%, primarily reflecting:

•higher brick and mortar and online channel sales in our Beauty and Housewares segments due primarily to strong consumer demand, the favorable comparative impact of COVID-19 related store closures, ~~and~~ reduced store traffic and a soft back to school season in the prior year ~~period;~~period, and earlier than typical customer orders as retailers accelerated orders into the third quarter to try to avoid supply chain disruptions during the holiday season;

•~~an increase~~growth in consolidated international sales;

•higher sales in the club and closeout channels;

•~~growth in consolidated online sales;~~ and

•the favorable impact of orders that were not able to be shipped at the end of the fourth quarter of fiscal 2021 due to the impact of the late-February winter storm in the U.S. (“Winter Storm Uri”).

These factors were partially offset by by:

•a decrease in sales in our Health & Home segment as a result of the EPA packaging compliance matter and related stop shipment actions and stronger COVID-19 driven demand for healthcare and healthy living products, primarily in thermometry and air filtration, in the comparative prior year period; and

•a net sales revenue decline in Non-Core ~~business.~~business primarily due to the sale of our North America Personal Care business during the second quarter of fiscal 2022.

Net sales revenue was also favorably impacted by net foreign currency fluctuations of approximately

~~$5.5~~ $8.8 million, or ~~1.3%~~0.6%.

Net sales revenue from our Leadership Brands was ~~$429.1~~$1,329.9 million, compared to ~~$349.0~~$1,288.6 million for the same period last year, representing ~~growth~~an increase of ~~22.9%~~3.2%.

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Segment Net Sales Revenue

Housewares

Comparison of ~~First~~Third Quarter Fiscal 2022 to ~~First~~Third Quarter Fiscal 2021

Net sales revenue increased ~~$53.0~~$23.7 million, or ~~37.7%~~10.7%, to ~~$193.6~~$246.1 million, compared to ~~$140.6~~$222.4 million. Growth was driven by an increase from Organic business ~~increase~~ of ~~$52.1~~$23.6 million, or ~~37.1%~~10.6%, primarily due to:

•~~an increase in~~higher brick and mortar and online channel sales ~~for both OXO~~driven by strong consumer demand, earlier than typical customer orders as retailers accelerated orders into the third quarter to try to avoid supply chain disruptions during the holiday season and ~~Hydro Flask brands~~the favorable comparative impact of COVID-19 reduced store traffic and a soft back to school season in the prior year period;

•the impact of customer price increases related to rising freight and product costs;

•higher sales in the club and closeout channels; and

•growth in international sales.

Net sales revenue was favorably impacted by net foreign currency fluctuations of approximately $0.1 million, or 0.1%.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Net sales revenue increased $90.1 million, or 16.0%, to $655.0 million, compared to $564.9 million. Growth was driven by an increase from Organic business of $88.8 million, or 15.7%, primarily due toto:

•higher brick and mortar and online channel sales driven by strong consumer demand, the favorable comparative impact of COVID-19 related store closures, ~~and~~ reduced store traffic and a soft back to school season in the prior year ~~period;~~period, and earlier than typical customer orders as retailers accelerated orders into the third quarter to try to avoid supply chain disruptions during the holiday season;

•growth in international sales;

•higher sales in the club and closeout channels; and

•the favorable impact of orders that were not able to be shipped at the end of the fourth quarter of fiscal 2021 due to Winter Storm Uri.

Net sales revenue was favorably impacted by net foreign currency fluctuations of approximately $1.3 million, or 0.2%.

Health & Home

Comparison of Third Quarter Fiscal 2022 to Third Quarter Fiscal 2021

Net sales revenue decreased $46.3 million, or 18.5%, to $203.9 million, compared to $250.2 million. The decline was driven by a decrease from Organic business of $46.6 million, or 18.6%, primarily due to a decrease in sales due to stronger COVID-19 driven demand for healthcare and healthy living products, primarily in thermometry and air filtration, in the comparative prior year period and a decrease in sales of air filtration products as a result of the EPA packaging compliance matter.

These factors were partially offset by ~~a decrease~~an increase in ~~online~~ sales ~~due to the unfavorable comparative impact~~ of ~~a shift towards online shopping in the prior year period due to COVID-19 related store closures.~~humidification products and new product introductions.

Net sales revenue was also favorably impacted by net foreign currency fluctuations of approximately

~~$0.9~~ $0.3 million, or ~~0.6%~~0.1%.

~~Health & Home~~

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Comparison of First ~~Quarter~~Nine Months of Fiscal 2022 to First ~~Quarter~~Nine Months of Fiscal 2021

Net sales revenue ~~increased $4.1~~decreased $112.1 million, or ~~2.1%~~16.9%, to ~~$204.1~~$549.5 million, compared to ~~$200.0~~$661.6 million. ~~Growth~~The decline was driven by ana decrease from Organic business ~~increase~~ of ~~$1.2~~$116.3 million, or ~~0.6%~~17.6%, primarily due to:

•a decrease in both brick and mortar and online sales of air filtration, water filtration, and humidification products as a result of the EPA packaging compliance matter and related stop shipment actions;

•a decline in sales of thermometers and air filtration products due to stronger COVID-19 driven demand for healthcare and healthy living products in the comparative prior year period; and

•the unfavorable impact on sales of air filtration products driven by greater wildfire activity on the west coast of the U.S. in the comparative prior year period.

These factors were partially offset by an increase in sales of ~~air purifiers;~~

•~~growth in international sales;~~fans, heaters and

• new product introductions, as well as the favorable impact of orders that were not able to be shipped at the end of the fourth quarter of fiscal 2021 due to Winter Storm Uri.

~~These factors were partially offset by stronger COVID-19 driven demand for healthcare and healthy living products in the comparative prior period.~~

Net sales revenue was also favorably impacted by net foreign currency fluctuations of approximately

~~$2.9~~ $4.2 million, or ~~1.5%~~0.6%.

Beauty

Comparison of ~~First~~Third Quarter Fiscal 2022 to ~~First~~Third Quarter Fiscal 2021

Net sales revenue increased ~~$63.2~~$9.7 million, or ~~78.8%~~5.9%, to ~~$143.5~~$174.8 million, compared to ~~$80.3~~$165.2 million. The increase was driven by an increase from Organic business ~~increase~~ of ~~$61.6~~$8.9 million, or ~~76.7%~~5.4%. The increase from Organic business primarily reflects higher appliance sales due to:

•higher brick and mortar and online channel sales driven by strong consumer demand, the favorable comparative impact of COVID-19 reduced store traffic in the prior year period, and earlier than typical customer orders as retailers accelerated orders into the third quarter to try to avoid supply chain disruptions during the holiday season;

•new product introductions;

•higher international sales; and

•expanded distribution primarily in the club channel.

These factors were partially offset by a decline in Non-Core business net sales revenue primarily due to the sale of the North America Personal Care business during the second quarter of fiscal 2022.

Net sales revenue was favorably impacted by net foreign currency fluctuations of approximately $0.7 million, or 0.4%.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Net sales revenue increased $73.9 million, or 20.4%, to $436.9 million, compared to $363.0 million. The increase was driven by an increase from Organic business of $70.6 million, or 19.5%. The increase from Organic business primarily reflects:

•~~an increase in~~higher brick and mortar and online channel sales ~~due to~~driven by strong consumer demand, the favorable comparative impact of COVID-19 related store closures and reduced store traffic in the prior year ~~period;~~period, and earlier than typical customer orders as retailers accelerated orders into the third quarter to try to avoid supply chain disruptions during the holiday season;

•~~growth in the volumizer franchise due to continued high consumer demand,~~ new product introductions;

•expanded distribution primarily in the club ~~channel, new product introductions, and~~ channel;

•the favorable comparative impact of constrained supply levels in the prior year period;

•~~an increase in Drybar sales;~~

•~~an increase in online channel sales;~~

•higher international sales; and

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•the favorable impact of orders that were not able to be shipped at the end of the fourth quarter of fiscal 2021 due to Winter Storm Uri.

These factors were partially ~~offset~~offset by a decline in Non-Core ~~business.~~business net sales revenue primarily due to the sale of the North America Personal Care business during the second quarter of fiscal 2022.

Net sales revenue was ~~also~~ favorably impacted by net foreign currency fluctuations of approximately

~~$1.7~~ $3.3 million, or ~~2.1%~~0.9%.

Consolidated Gross Profit Margin

Comparison of ~~First~~Third Quarter Fiscal 2022 to ~~First~~Third Quarter Fiscal 2021

Consolidated gross profit margin decreased ~~1.8~~1.3 percentage points to ~~40.8%~~43.8%, compared to ~~42.6%~~45.1%. The decrease in consolidated gross profit margin was primarily due to:

•the net unfavorable impact of higher inbound freight expense ~~due to rising freight costs~~ and ~~container supply shortages;~~related customer price increases;

•EPA compliance costs recognized in cost of goods sold in the Health & Home segment of ~~$13.1~~$0.3 million; and

•a less favorable channel mix inwithin the Housewares segment.

These factors were partially offset by a more favorable product mix within the Housewares and Beauty segments and a favorable mix of more Housewares and Beauty sales within our consolidated net sales revenue.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Consolidated gross profit margin decreased 0.9 percentage points to 43.0%, compared to 43.9%. The decrease in consolidated gross profit margin was primarily due to:

•the unfavorable impact of higher inbound freight expense;

•EPA compliance costs recognized in cost of goods sold in the Health & Home segment of $13.8 million; and

•a less favorable channel mix within the Housewares segment.

These factors were partially offset by a more favorable product mix within the Beauty ~~segment.~~segment and a favorable mix of more Housewares and Beauty sales within our consolidated net sales revenue.

Consolidated SG&A

Comparison of ~~First~~Third Quarter Fiscal 2022 to ~~First~~Third Quarter Fiscal 2021

Consolidated SG&A ratio ~~decreased~~increased ~~0.2~~0.1 percentage points to ~~28.8%~~29.4%, compared to ~~29.0%~~29.3%. The ~~decrease~~increase in the consolidated SG&A ratio was primarily due to:

•~~favorable~~higher personnel expense;

•unfavorable operating leverage;

•~~reduced royalty expense as a result of the amendment of the Revlon trademark license;~~higher distribution expense;

•~~lower amortization expense;~~EPA compliance costs of $4.6 million in the Health & Home segment; and

•~~a decrease~~higher acquisition-related expense in ~~bad debt expense.~~connection with the Osprey transaction.

These factors were partially offset by:

•lower royalty expense;

•reduced annual incentive compensation expense;

•lower marketing expense;

•lower amortization expense;

•a decrease in bad debt expense; and

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•the favorable leverage impact of customer price increases related to rising freight and product costs.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Consolidated SG&A ratio increased 1.7 percentage points to 29.4%, compared to 27.7%. The increase in the consolidated SG&A ratio was primarily due to:

•the comparative impact of higher personnel and ~~advertising~~marketing expenses due to cost reduction initiatives in the prior year period related to the uncertainty of COVID-19; ~~and~~

•higher distribution ~~expenses.~~expense;

•higher share-based compensation expense; and

•EPA compliance costs of $7.2 million in the Health & Home segment as a result of the EPA packaging compliance matter and related stop shipment actions.

These factors were partially offset by:

•reduced royalty expense;

•decreased annual incentive compensation expense;

•reduced amortization expense; and

•the favorable leverage impact of customer price increases related to rising freight and product costs.

Restructuring Charges

Comparison of ~~First~~Third Quarter Fiscal 2022 to ~~First~~Third Quarter Fiscal 2021

We incurred ~~an immaterial amount~~insignificant amounts of pre-tax restructuring costs under Project Refuel ~~for~~during the three month ~~period~~periods ended ~~May 31,~~November 30, 2021 ~~compared to $0.3 million for the same period last year.~~and 2020.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

During both the nine months ended November 30, 2021 and 2020, we incurred $0.4 million of pre-tax restructuring costs under Project Refuel primarily related to employee severance and termination benefits. Restructuring costs incurred during the nine months ended November 30, 2020 also included contract termination costs.

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Operating Income, Operating Margin, Adjusted Operating Income (non-GAAP), and Adjusted Operating Margin (non-GAAP) by Segment

In order to provide a better understanding of the comparative impact of certain items on our operating income, the tables that follow report the comparative pre-tax impact of acquisition-related expenses, EPA compliance costs, restructuring charges, amortization of intangible assets, and non-cash share-based compensation, as applicable, on operating income and operating margin for each segment and in total for the periods presented below. Adjusted operating income and adjusted operating margin may be considered non-GAAP financial measures as contemplated by SEC Regulation G, Rule 100. For additional information regarding management’s decision to present this non-GAAP financial information, see the introduction to this Item 2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”


		Three Months Ended May 31, 2021																		Three Months Ended November 30, 2021
(In thousands)	(In thousands)	Housewares				Health & Home				Beauty					Total				(In thousands)	Housewares				Health & Home				Beauty				Total
Operating income, as reported (GAAP)	Operating income, as reported (GAAP)	$	27,143	14.0	%	$	11,249	5.5	%	$	26,443	`	18.4	%	$	64,835	12.0	%	Operating income, as reported (GAAP)	$	43,239	17.6	%	$	13,573	6.7	%	$	33,228	19.0	%	$	90,040	14.4	%

Acquisition-related expenses																			Acquisition-related expenses	1,605		0.7	%	—		—	%	—		—	%	1,605		0.3	%
EPA compliance costs	EPA compliance costs	—		—	%	13,112		6.4	%	—			—	%	13,112		2.4	%	EPA compliance costs	—		—	%	4,926		2.4	%	—		—	%	4,926		0.8	%
Restructuring charges	Restructuring charges	—		—	%	—		—	%	6			—	%	6		—	%	Restructuring charges	—		—	%	—		—	%	5		—	%	5		—	%
Subtotal	Subtotal	27,143		14.0	%	24,361		11.9	%	26,449			18.4	%	77,953		14.4	%	Subtotal	44,844		18.2	%	18,499		9.1	%	33,233		19.0	%	96,576		15.5	%
Amortization of intangible assets	Amortization of intangible assets	518		0.3	%	567		0.3	%	1,898			1.3	%	2,983		0.6	%	Amortization of intangible assets	525		0.2	%	572		0.3	%	1,897		1.1	%	2,994		0.5	%
Non-cash share-based compensation	Non-cash share-based compensation	5,551		2.9	%	4,880		2.4	%	3,589			2.5	%	14,020		2.6	%	Non-cash share-based compensation	2,339		1.0	%	2,717		1.3	%	1,493		0.9	%	6,549		1.0	%
Adjusted operating income (non-GAAP)	Adjusted operating income (non-GAAP)	$	33,212	17.2	%	$	29,808	14.6	%	$	31,936		22.3	%	$	94,956	17.5	%	Adjusted operating income (non-GAAP)	$	47,708	19.4	%	$	21,788	10.7	%	$	36,623	20.9	%	$	106,119	17.0	%


		Three Months Ended May 31, 2020																	Three Months Ended November 30, 2020
(In thousands)	(In thousands)	Housewares				Health & Home				Beauty				Total				(In thousands)	Housewares				Health & Home				Beauty				Total
Operating income, as reported (GAAP)	Operating income, as reported (GAAP)	$	23,233	16.5	%	$	31,533	15.8	%	$	2,213	2.8	%	$	56,979	13.5	%	Operating income, as reported (GAAP)	$	37,658	16.9	%	$	30,478	12.2	%	$	32,573	19.7	%	$	100,709	15.8	%

Restructuring charges	Restructuring charges	238		0.2	%	—		—	%	95		0.1	%	333		0.1	%	Restructuring charges	(12)		—	%	—		—	%	—		—	%	(12)		—	%
Subtotal	Subtotal	23,471		16.7	%	31,533		15.8	%	2,308		2.9	%	57,312		13.6	%	Subtotal	37,646		16.9	%	30,478		12.2	%	32,573		19.7	%	100,697		15.8	%
Amortization of intangible assets	Amortization of intangible assets	498		0.4	%	2,452		1.2	%	1,524		1.9	%	4,474		1.1	%	Amortization of intangible assets	523		0.2	%	2,454		1.0	%	1,524		1.0	%	4,501		0.7	%
Non-cash share-based compensation	Non-cash share-based compensation	3,421		2.4	%	3,314		1.7	%	2,556		3.2	%	9,291		2.2	%	Non-cash share-based compensation	2,712		1.2	%	2,359		0.9	%	1,668		1.0	%	6,739		1.1	%
Adjusted operating income (non-GAAP)	Adjusted operating income (non-GAAP)	$	27,390	19.5	%	$	37,299	18.7	%	$	6,388	8.0	%	$	71,077	16.9	%	Adjusted operating income (non-GAAP)	$	40,881	18.4	%	$	35,291	14.1	%	$	35,765	21.7	%	$	111,937	17.6	%


	Nine Months Ended November 30, 2021
(In thousands)	Housewares				Health & Home				Beauty				Total
Operating income, as reported (GAAP)	$	112,303	17.1	%	$	29,616	5.4	%	$	80,247	18.4	%	$	222,166	13.5	%

Acquisition-related expenses	1,605		0.2	%	—		—	%	—		—	%	1,605		0.1	%
EPA compliance costs	—		—	%	20,998		3.8	%	—		—	%	20,998		1.3	%
Restructuring charges	369		0.1	%	—		—	%	11		—	%	380		—	%
Subtotal	114,277		17.4	%	50,614		9.2	%	80,258		18.4	%	245,149		14.9	%
Amortization of intangible assets	1,562		0.2	%	1,709		0.3	%	5,692		1.3	%	8,963		0.5	%
Non-cash share-based compensation	11,047		1.7	%	10,229		1.9	%	7,073		1.6	%	28,349		1.7	%
Adjusted operating income (non-GAAP)	$	126,886	19.4	%	$	62,552	11.4	%	$	93,023	21.3	%	$	282,461	17.2	%

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	Nine Months Ended November 30, 2020
(In thousands)	Housewares				Health & Home				Beauty				Total
Operating income, as reported (GAAP)	$	106,294	18.8	%	$	95,782	14.5	%	$	54,887	15.1	%	$	256,963	16.2	%



Restructuring charges	251		—	%	—		—	%	104		—	%	355		—	%
Subtotal	106,545		18.9	%	95,782		14.5	%	54,991		15.2	%	257,318		16.2	%
Amortization of intangible assets	1,541		0.3	%	7,415		1.1	%	4,571		1.3	%	13,527		0.9	%
Non-cash share-based compensation	8,024		1.4	%	7,166		1.1	%	5,464		1.5	%	20,654		1.3	%
Adjusted operating income (non-GAAP)	$	116,110	20.6	%	$	110,363	16.7	%	$	65,026	17.9	%	$	291,499	18.3	%

Consolidated Operating Income

Comparison of ~~First~~Third Quarter Fiscal 2022 to ~~First~~Third Quarter Fiscal 2021

Consolidated operating income was ~~$64.8~~$90.0 million, or ~~12.0%~~14.4% of net sales revenue, compared to ~~$57.0~~$100.7 million, or ~~13.5%~~15.8% of net sales revenue. The 1.4 percentage point decrease in consolidated operating margin was primarily due to:

•the net unfavorable impact of higher inbound freight expense ~~due to rising freight costs~~ and ~~container supply shortages;~~related customer price increases;

•increased personnel expense;

•higher distribution expense;

•unfavorable operating leverage;

•EPA compliance costs of $4.9 million in the Health & Home ~~segment of $13.1 million;~~segment;

•a less favorable channel mix inwithin the Housewares segment;

•~~higher personnel and advertising expenses due to cost reduction initiatives in the prior year period related to the uncertainty of COVID-19;~~ and

•higher ~~distribution expenses.~~acquisition-related expense in connection with the Osprey transaction.

These factors were partially offset by:

•a ~~more~~ favorable product mix inwithin the Housewares and Beauty ~~segment;~~segments and a favorable mix of more Housewares and Beauty sales within our consolidated net sales revenue;

•~~favorable operating leverage;~~lower royalty expense;

•reduced ~~royalty expense as a result of the amendment of the Revlon trademark license;~~annual incentive compensation expense;

•lower marketing expense;

•lower amortization expense; and

•a decrease in bad debt expense.

Consolidated adjusted operating income ~~increased 33.6%~~decreased 5.2% to ~~$95.0~~$106.1 million, or ~~17.5%~~17.0% of net sales revenue, compared to ~~$71.1~~$111.9 million, or ~~16.9%~~17.6% of net sales revenue.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Consolidated operating income was $222.2 million, or 13.5% of net sales revenue, compared to $257.0 million, or 16.2% of net sales revenue. The 2.7 percentage point decrease in consolidated operating margin was primarily due to:

•the comparative impact of higher personnel and marketing expenses due to cost reduction initiatives in the prior year period related to the uncertainty of COVID-19;

•higher inbound freight expense due to rising freight rates and container supply shortages;

•EPA compliance costs of $21.0 million in the Health & Home segment;

•increased distribution expense;

•a less favorable channel mix within the Housewares segment; and

•higher share-based compensation expense.

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These factors were partially offset by:

•a favorable product mix within the Beauty segment and a favorable mix of more Housewares and Beauty sales within our consolidated net sales revenue;

•reduced royalty expense;

•decreased annual incentive compensation expense; and

•reduced amortization expense.

Consolidated adjusted operating income decreased 3.1% to $282.5 million, or 17.2% of net sales revenue, compared to $291.5 million, or 18.3% of net sales revenue.

Housewares

Comparison of ~~First~~Third Quarter Fiscal 2022 to ~~First~~Third Quarter Fiscal 2021

Operating income was ~~$27.1~~$43.2 million, or ~~14.0%~~17.6% of segment net sales revenue, compared to ~~$23.2~~$37.7 million, or ~~16.5%~~16.9% of segment net sales revenue. The ~~2.5~~0.7 percentage point ~~decrease~~increase in segment operating margin was primarily due to:

•favorable operating leverage;

•favorable product mix; and

•reduced annual incentive compensation expense.

These factors were partially offset by:

•the net unfavorable impact of higher inbound freight expense and related customer price increases;

•a less favorable channel mix;

•~~higher inbound freight expense due to rising freight costs and container supply shortages;~~

•~~higher distribution costs;~~

•an increase in marketing expense; and

•higher ~~personnel~~acquisition-related expense in connection with the Osprey transaction.

Adjusted operating income increased 16.7%to $47.7 million, or 19.4% of segment net sales revenue, compared to $40.9 million, or 18.4% of segment net sales revenue.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Operating income was $112.3 million, or 17.1% of segment net sales revenue, compared to $106.3 million, or 18.8% of segment net sales revenue. The 1.7 percentage point decrease in segment operating margin was primarily due to:

•a less favorable channel mix;

•the unfavorable impact of higher inbound freight expense;

•an increase in marketing expense;

•higher share-based compensation expense; and

•higher distribution expense.

These factors were partially offset by ~~lower bad debt expense and~~ favorable operating leverage.

Adjusted operating income increased ~~21.3%~~9.3% to ~~$33.2~~$126.9 million, or ~~17.2%~~19.4% of segment net sales revenue, compared to ~~$27.4~~$116.1 million, or ~~19.5%~~20.6% of segment net sales revenue.

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Health & Home

Comparison of ~~First~~Third Quarter Fiscal 2022 to ~~First~~Third Quarter Fiscal 2021

Operating income was ~~$11.2~~$13.6 million, or ~~5.5%~~6.7% of segment net sales revenue, compared to ~~$31.5~~$30.5 million, or ~~15.8%~~12.2% of segment net sales revenue. The ~~10.3~~5.5 percentage point decrease in segment operating margin was primarily due to:

•~~a less favorable product mix;~~unfavorable operating leverage;

•the net unfavorable impact of higher inbound ocean freight expense and related customer price increases;

•EPA compliance costs of ~~$13.1~~$4.9 million;

•higher ~~inbound freight expense due to rising freight costs and container supply shortages;~~

•~~higher~~ distribution ~~costs;~~

•~~an increase in marketing~~ expense; and

•~~higher personnel expenses.~~increase in inventory obsolescence expense.

These factors were partially offset by:

•a decrease in marketing expenses;

•lower ~~product liability claim costs;~~inbound air freight expense;

•reduced amortization expense;

•~~a decrease in royalty expense;~~ and

•~~the favorable impact of foreign currency fluctuations.~~decreased annual incentive compensation expense.

Adjusted operating income decreased ~~20.1%~~38.3% to ~~$29.8~~$21.8 million, or ~~14.6%~~10.7% of segment net sales revenue, compared to ~~$37.3~~$35.3 million, or ~~18.7%~~14.1% of segment net sales revenue.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Operating income was $29.6 million, or 5.4% of segment net sales revenue, compared to $95.8 million, or 14.5% of segment net sales revenue. The 9.1 percentage point decrease in segment operating margin was primarily due to:

•unfavorable operating leverage;

•the unfavorable impact of higher inbound ocean freight expense;

•EPA compliance costs of $21.0 million;

•higher personnel expense;

•increased distribution expense;

•increase in inventory obsolescence expense; and

•higher share-based compensation expense.

These factors were partially offset by:

•a decrease in marketing expenses;

•lower inbound air freight expense;

•the favorable comparative impact of tariff exclusion refunds received in fiscal 2022;

•reduced amortization expense; and

•decreased annual incentive compensation expense.

Adjusted operating income decreased 43.3% to $62.6 million, or 11.4% of segment net sales revenue, compared to $110.4 million, or 16.7% of segment net sales revenue.

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Beauty

Comparison of ~~First~~Third Quarter Fiscal 2022 to ~~First~~Third Quarter Fiscal 2021

Operating income was ~~$26.4~~$33.2 million, or 19.0% of segment net sales revenue, compared to $32.6 million, or 19.7% of segment net sales revenue. The 0.7 percentage point decrease in segment operating margin was primarily due to:

•the net unfavorable impact of higher inbound freight expense and related customer price increases;

•higher marketing expense;

•an increase in personnel expense; and

•the unfavorable impact of foreign currency exchange fluctuations.

These factors were partially offset by:

•a more favorable product mix;

•reduced royalty expense as a result of the amended Revlon trademark license;

•a decrease in outbound freight costs;

•lower bad debt expense;

•lower inventory obsolescence expense; and

•favorable operating leverage.

Adjusted operating income increased 2.4% to $36.6 million, or 20.9% of segment net sales revenue, compared to $35.8 million, or 21.7% of segment net sales revenue.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Operating income was $80.2 million, or 18.4% of segment net sales revenue, compared to ~~$2.2~~$54.9 million, or ~~2.8%~~15.1% of segment net sales revenue. The ~~15.6~~3.3 percentage point increase in segment operating margin was primarily due to:

•favorable operating leverage;

•a more favorable product mix;

•reduced royalty expense as a result of the ~~amendment of the~~amended Revlon trademark license;

•lower inventory obsolescence ~~costs;~~expense;

•~~the favorable impact of foreign currency fluctuations;~~a decrease in outbound freight costs; and

•a decrease in bad debt expense.

These factors were partially offset by:

•~~higher inbound freight expense due to rising freight costs and container supply shortages;~~increased marketing expense;

•~~increased marketing~~the unfavorable impact of higher inbound freight expense;

•higher personnel expense;

•higher share-based compensation expense; and

•~~increased personnel expense.~~the unfavorable impact of foreign currency exchange fluctuations.

Adjusted operating income increased ~~$25.5 million~~43.1% to ~~$31.9~~$93.0 million, or ~~22.3%~~21.3% of segment net sales revenue, compared to ~~$6.4~~$65.0 million, or ~~8.0%~~17.9% of segment net sales revenue.

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Interest Expense

Comparison of ~~First~~Third Quarter Fiscal 2022 to ~~First~~Third Quarter Fiscal 2021

Interest expense was ~~$3.0~~$3.2 million, compared to ~~$3.8~~$2.9 million. The increase in interest expense was primarily due to higher average levels of debt outstanding and higher average interest rates compared to the same period last year.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Interest expense was $9.5 million, compared to $9.6 million. The decrease in interest expense was primarily due to lower average interest rates, partially offset by higher average levels of debt outstanding compared to the same period last year.

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Income Tax Expense

The period-over-period comparison of our effective tax rate is often impacted by the mix of taxable income in our various tax jurisdictions. Due to our organization in Bermuda and the ownership structure of our foreign subsidiaries, many of which are not owned directly or indirectly by a U.S. parent company, an immaterial amount of our foreign income is subject to U.S. taxation on a permanent basis under current law. Additionally, our intellectual property is largely owned by our foreign subsidiaries, resulting in proportionally higher earnings in jurisdictions with lower statutory tax rates, which decreases our overall effective tax rate.

For the three months ended ~~May 31,~~November 30, 2021, income tax expense as a percentage of income before income tax was ~~8.0%~~12.9% compared to an14.0% for the same period last year. The year-over-year decrease in the effective tax rate is primarily due to increases in liabilities related to uncertain tax positions in the prior year period, partially offset by shifts in the mix of income in our various tax jurisdictions. For the nine months ended November 30, 2021, income tax ~~benefit~~expense as a percentage of ~~13.0%~~income before income tax was 13.6% compared to 6.5% for the same period last year, primarily due to the mix of income in our various tax jurisdictions and the benefit of the CARES Act in fiscal ~~2021. Income tax expense for the three months ended May 31,~~ 2021, ~~is driven~~partially offset by the ~~mix~~favorable comparative impact of ~~taxable income~~increases in ~~our various~~liabilities related to uncertain tax ~~jurisdictions and excess tax benefits associated with share-based compensation recognized~~positions in the ~~period in which it is settled.~~prior year period.

~~Our Macau subsidiary generates income from the sale of the goods that it has sourced and procured.This subsidiary is responsible for the sourcing and procurement of a large portion of the products that we sell.We previously had an indefinite tax holiday in Macau conditioned on the subsidiary meeting certain~~

~~employment and investment thresholds. The Macau Offshore Law and its supplementary regulations that~~

grant tax incentives to approved offshore institutions was abolished on January 1, 2021. Existing approved offshore institutions such as ours continued to operate under the offshore regime until the end of the calendar year 2020. Beginning in calendar year 2021, our Macau subsidiary transitioned to onshore status and is now subject to a statutory corporate income tax of 12%. We expect the impact of this change to increase our overall effective tax rate by 1.5 to 2.0 percentage points on an annual basis, beginning with our fiscal 2022. Because our Macau subsidiary is not directly or indirectly owned by a U.S. parent, there is no U.S. tax liability associated with the income generated in Macau.

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Net Income, Diluted EPS, Adjusted Income (non-GAAP), and Adjusted Diluted EPS (non-GAAP)

In order to provide a better understanding of the impact of certain items on our income and diluted EPS, the tables that follow report the comparative after-tax impact of acquisition-related expenses, EPA compliance costs, restructuring charges, tax reform, amortization of intangible assets, and non-cash share-based compensation, as applicable, on income and diluted EPS for the periods presented below. For additional information regarding management’s decision to present this non-GAAP financial information, see the introduction to this Item 2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Three Months Ended May 31, 2021
Income Diluted EPS
(in thousands, except per share data) Before Tax Tax Net of Tax Before Tax Tax Net of Tax
As reported (GAAP) $ 61,942 $ 4,970 $ 56,972 $ 2.51 $ 0.20 $ 2.31
EPA compliance costs 13,112 197 12,915 0.53 0.01 0.52
Restructuring charges 6 — 6 — — —
Subtotal 75,060 5,167 69,893 3.05 0.21 2.84
Amortization of intangible assets 2,983 208 2,775 0.12 0.01 0.11
Non-cash share-based compensation 14,020 859 13,161 0.57 0.03 0.53
Adjusted (non-GAAP) $ 92,063 $ 6,234 $ 85,829 $ 3.74 $ 0.25 $ 3.48
Weighted average shares of common stock used in computing diluted EPS 24,636


	Three Months Ended November 30, 2021
	Income						Diluted EPS
(in thousands, except per share data)	Before Tax		Tax		Net of Tax		Before Tax		Tax		Net of Tax
As reported (GAAP)	$	86,886	$	11,203	$	75,683	$	3.56	$	0.46	$	3.10

Acquisition-related expenses	1,605		58		1,547		0.07		—		0.06
EPA compliance costs	4,926		74		4,852		0.20		—		0.20
Restructuring charges	5		—		5		—		—		—

Subtotal	93,422		11,335		82,087		3.83		0.46		3.36
Amortization of intangible assets	2,994		197		2,797		0.12		0.01		0.11
Non-cash share-based compensation	6,549		784		5,765		0.27		0.03		0.24
Adjusted (non-GAAP)	$	102,965	$	12,316	$	90,649	$	4.22	$	0.50	$	3.72

Weighted average shares of common stock used in computing diluted EPS											24,399


		Three Months Ended May 31, 2020													Three Months Ended November 30, 2020
		Income						Diluted EPS							Income						Diluted EPS
(in thousands, except per share data)	(in thousands, except per share data)	Before Tax		Tax		Net of Tax		Before Tax		Tax		Net of Tax		(in thousands, except per share data)	Before Tax		Tax		Net of Tax		Before Tax		Tax		Net of Tax
As reported (GAAP)	As reported (GAAP)	$	53,369	$	(6,917)	$	60,286	$	2.10	$	(0.27)	$	2.37	As reported (GAAP)	$	97,876	$	13,721	$	84,155	$	3.89	$	0.55	$	3.34

Restructuring charges	Restructuring charges	333		2		331		0.01		—		0.01		Restructuring charges	(12)		—		(12)		—		—		—
Tax reform		—		9,357		(9,357)		—		0.37		(0.37)

Subtotal	Subtotal	53,702		2,442		51,260		2.11		0.10		2.02		Subtotal	97,864		13,721		84,143		3.89		0.55		3.34
Amortization of intangible assets	Amortization of intangible assets	4,474		241		4,233		0.18		0.01		0.17		Amortization of intangible assets	4,501		204		4,297		0.18		0.01		0.17
Non-cash share-based compensation	Non-cash share-based compensation	9,291		606		8,685		0.37		0.02		0.34		Non-cash share-based compensation	6,739		403		6,336		0.27		0.02		0.25
Adjusted (non-GAAP)	Adjusted (non-GAAP)	$	67,467	$	3,289	$	64,178	$	2.66	$	0.13	$	2.53	Adjusted (non-GAAP)	$	109,104	$	14,328	$	94,776	$	4.33	$	0.57	$	3.76

Weighted average shares of common stock used in computing diluted EPS	Weighted average shares of common stock used in computing diluted EPS											25,397		Weighted average shares of common stock used in computing diluted EPS											25,192

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	Nine Months Ended November 30, 2021
	Income						Diluted EPS
(in thousands, except per share data)	Before Tax		Tax		Net of Tax		Before Tax		Tax		Net of Tax
As reported (GAAP)	$	212,843	$	28,873	$	183,970	$	8.70	$	1.18	$	7.52

Acquisition-related expenses	1,605		58		1,547		0.07		—		0.06
EPA compliance costs	20,998		315		20,683		0.86		0.01		0.85
Restructuring charges	380		6		374		0.02		—		0.02

Subtotal	235,826		29,252		206,574		9.64		1.20		8.45
Amortization of intangible assets	8,963		603		8,360		0.37		0.02		0.34
Non-cash share-based compensation	28,349		2,355		25,994		1.16		0.10		1.06
Adjusted (non-GAAP)	$	273,138	$	32,210	$	240,928	$	11.17	$	1.32	$	9.85

Weighted average shares of common stock used in computing diluted EPS											24,461


	Nine Months Ended November 30, 2020
	Income						Diluted EPS
(in thousands, except per share data)	Before Tax		Tax		Net of Tax		Before Tax		Tax		Net of Tax
As reported (GAAP)	$	247,835	$	16,061	$	231,774	$	9.78	$	0.63	$	9.14



Restructuring charges	355		2		353		0.01		—		0.01
Tax reform	—		9,357		(9,357)		—		0.37		(0.37)
Subtotal	248,190		25,420		222,770		9.79		1.00		8.79
Amortization of intangible assets	13,527		651		12,876		0.53		0.03		0.51
Non-cash share-based compensation	20,654		1,406		19,248		0.82		0.06		0.76
Adjusted (non-GAAP)	$	282,371	$	27,477	$	254,894	$	11.14	$	1.08	$	10.05

Weighted average shares of common stock used in computing diluted EPS											25,350

Comparison of ~~First~~Third Quarter Fiscal 2022 to ~~First~~Third Quarter Fiscal 2021

Net Income was ~~$57.0~~$75.7 million, compared to ~~$60.3~~$84.2 million. Diluted EPS was ~~$2.31,~~$3.10, compared to ~~$2.37.~~$3.34. Diluted EPS decreased primarily due to lower operating income in the Health & Home segment and higher interest expense, partially offset by higher operating income in the ~~comparative impact from~~Housewares and Beauty segments, a decrease in the ~~Tax~~effective income tax rate and lower weighted average diluted shares outstanding.

Adjusted income decreased $4.1 million, or 4.4%, to $90.6 million, compared to $94.8 million. Adjusted diluted EPS decreased 1.1% to $3.72, compared to $3.76.

Comparison of First Nine Months of Fiscal 2022 to First Nine Months of Fiscal 2021

Net Income was $184.0 million, compared to $231.8 million. Diluted EPS was $7.52, compared to $9.14. Diluted EPS decreased primarily due to lower operating income in the Health & Home segment and a higher effective income tax rate primarily due to the tax reform benefit recognized in the prior year period, partially offset by higher operating income in the Housewares and Beauty ~~and Housewares~~ segments ~~lower interest expense~~ and lower weighted average diluted shares outstanding.

Adjusted income ~~increased $21.7~~decreased $14.0 million, or ~~33.7%~~5.5%, to ~~$85.8~~$240.9 million, compared to ~~$64.2~~$254.9 million. Adjusted diluted EPS ~~increased 37.5%~~decreased 2.0% to ~~$3.48,~~$9.85, compared to ~~$2.53.~~

$10.05.

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Financial Condition, Liquidity and Capital Resources

Selected measures of our liquidity and capital resources are shown for the periods below:


		Three Months Ended May 31,					Nine Months Ended November 30,
		2021		2020			2021		2020
Accounts receivable turnover (days) (1)	Accounts receivable turnover (days) (1)	67.4		67.5		Accounts receivable turnover (days) (1)	76.4		70.0
Inventory turnover (times) (1)	Inventory turnover (times) (1)	3.0		3.2		Inventory turnover (times) (1)	2.3		3.6
Working capital (in thousands)	Working capital (in thousands)	$	484,339	$	391,107	Working capital (in thousands)	$	539,681	$	491,563
Current ratio	Current ratio	1.8:1		2.1:1		Current ratio	1.9:1		1.8:1
Ending debt to ending equity ratio	Ending debt to ending equity ratio	42.5%		26.6%		Ending debt to ending equity ratio	33.0%		36.4%
Return on average equity (1)	Return on average equity (1)	20.3%		15.2%		Return on average equity (1)	16.4%		18.9%

(1)Accounts receivable turnover, inventory turnover and return on average equity computations use 12 month trailing net sales revenue, cost of goods sold or net income components as required by the particular measure. The current and four prior quarters' ending balances of accounts receivable, inventory and equity are used for the purposes of computing the average balance component as required by the particular measure.

We principally rely on our cash flow from operations and borrowings under our Credit Agreement (as defined below) to finance our operations, capital and intangible asset expenditures, acquisitions and share repurchases. Historically, our principal uses of cash to fund our operations have included operating expenses, primarily SG&A, and working capital, predominantly for inventory purchases and the extension of credit to our retail customers. We have been able to typically generate positive cash flow from operations sufficient to fund our operating activities. In the past, we have utilized a combination of available cash and existing, or additional, sources of financing to fund strategic acquisitions, share repurchases and capital investments. We had ~~$37.4~~$44.3 million in cash and cash equivalents at ~~May 31,~~November 30, 2021. As of ~~May 31,~~November 30, 2021, the amount of cash and cash equivalents held by our foreign subsidiaries was ~~$26.5 million, of which an immaterial amount was held in foreign countries where the funds may not be readily convertible into other currencies.~~$23.9 million. We have no existing activities involving special purpose entities or off-balance sheet financing.

Based on our current financial condition and current operations, we believe that cash flows from operations and available financing sources will continue to provide sufficient capital resources to fund our foreseeable short- and long-term liquidity requirements.

We continue to evaluate acquisition opportunities on a regular basis. We may finance acquisition activity with available cash, the issuance of shares of common stock, additional debt, or other sources of financing, depending upon the size and nature of any such transaction and the status of the capital markets at the time of such acquisition. Subsequent to the end of our third quarter of fiscal 2022, we completed the acquisition of Osprey, which was funded with cash on hand and a $435.0 million borrowing under our existing revolving credit facility. For additional information, see Note 16 to the accompanying condensed consolidated financial statements.

We may also elect to repurchase additional shares of common stock under our Board of Directors' authorization, subject to limitations contained in our debt agreements and based upon our assessment of a number of factors, including share price, trading volume and general market conditions, working capital requirements, general business conditions, financial conditions, any applicable contractual limitations, and other factors, including alternative investment opportunities. We may finance share repurchases with available cash, additional debt or other sources of financing. For additional information, see Part II, Item 5. “Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities” in our Form 10-K and Part II, Item 2., “Unregistered Sales of Equity Securities and Use of Proceeds" in this report.

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Operating Activities

Operating activities used net cash of ~~$63.4~~$5.1 million for the ~~three~~nine months ended ~~May 31,~~November 30, 2021, compared to net cash provided of ~~$92.8~~$249.7 million for the same period last year. The decrease in cash provided by operating activities was primarily driven by ~~an increase~~a decrease in cash earnings and increases in cash used for ~~working capital,~~accounts payable primarily for inventory purchases, incentive

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compensation payments and tax withholding settlements, partially offset by an increase in accrued income taxes.

Investing Activities

~~During~~Investing activities provided net cash of $8.5 million during the ~~three~~nine months ended ~~May 31,~~November 30, 2021, wecompared to net cash used of $19.4 million for the same period last year. The increase in cash provided by investing activities was primarily due to proceeds received from the sale of our North America Personal Care business in the second quarter of fiscal 2022 and sale of property and equipment, partially offset by an increase in capital and intangible asset expenditures. We made investments in capital and intangible asset expenditures of ~~$4.0~~$41.5 million during the nine months ended November 30, 2021, compared to ~~$6.5~~$19.4 million for the same period last year. The increase in capital and intangible asset expenditures was primarily for land and initial construction expenditures related to a new 2 million square foot distribution center for our Housewares segment. Capital and intangible asset expenditures during both periods ~~were primarily~~also included expenditures for tools, molds, and other production equipment and computer, software, furniture and other equipment.

Financing Activities

Financing activities ~~provided~~used net cash of ~~$59.6~~$4.2 million during the ~~three~~nine months ended ~~May 31,~~November 30, 2021, compared to net cash used ~~cash~~ of ~~$22.3~~$98.1 million for the same period last year. The ~~increase~~decrease in cash ~~provided~~used by financing activities is primarily due to a ~~net increase~~decrease in ~~proceeds from our line of credit partially offset by~~ open market repurchases of common stock.

Credit and Other Debt Agreements

Credit Agreement

We have a credit agreement (the "Credit Agreement") with Bank of America, N.A., as administrative agent, and other lenders that provides for an unsecured total revolving commitment of $1.25 billion. As of ~~May 31,~~November 30, 2021, the outstanding revolving loan principal balance was ~~$498.0~~$434.0 million (excluding prepaid financing fees), the balance of outstanding letters of credit was ~~$19.2~~$32.7 million and the amount available for borrowings was ~~$732.8~~$783.3 million. Covenants in the Credit Agreement limit the amount of total indebtedness we can incur. As of ~~May 31,~~November 30, 2021, these covenants effectively limited our ability to incur more than $735.8 million of additional debt from all sources, including the Credit Agreement, or $783.3 million in the event a qualified acquisition is consummated.

Subsequent to the end of our third quarter of fiscal 2022, we borrowed $435.0 million under our Credit Agreement in connection with the acquisition of Osprey. The proceeds of the borrowing and cash on hand were used to pay all of the cash consideration payable for the acquisition, including amounts for cash acquired. After giving effect to the borrowing, as of December 29, 2021, the remaining amount available for borrowings under our Credit Agreement was $351.8 million. As of December 29, 2021, covenants in the Credit Agreement did not limit our ability to incur ~~$732.8~~$351.8 million of additional debt under the Credit Agreement.

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Other Debt Agreements

As of ~~May 31,~~November 30, 2021, we have an aggregate principal balance of $16.7 million (excluding prepaid financing fees) under an unsecured loan agreement with the Mississippi Business Finance Corporation.

As of ~~May 31,~~November 30, 2021, there have been no material changes to the information provided in our Form 10-K.

New Accounting Guidance

For information on recently adopted and issued accounting pronouncements, see Note 2 to the accompanying condensed consolidated financial statements.

Information Regarding Forward-Looking Statements

Certain written and oral statements may constitute “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. This includes statements made in this report, in other filings with the SEC, in press releases, and in certain other oral and written presentations. Generally, the words “anticipates”, “believes”, “expects”, “plans”, “may”, “will”, “would”, “should”, “seeks”, “estimates”, “project”, “predict”, “potential”, “currently”, “continue”, “intends”, “outlook”, “could”, and other similar words identify forward-looking statements. All statements that address operating results, events or developments that may occur in the future, including statements related to sales, earnings per share results, and statements expressing general expectations about future operating results, are forward-looking statements and are based upon our current expectations and various assumptions. We believe there is a reasonable basis

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for our expectations and assumptions, but there can be no assurance that we will realize our expectations or that our assumptions will prove correct. Forward-looking statements are subject to risks that could cause them to differ materially from actual results. Accordingly, we caution readers not to place undue reliance on forward-looking statements. We believe that these risks include but are not limited to the risks described in this report and that are otherwise described from time to time in our SEC reports as filed. We undertake no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise.

Such risks are not limited to, but may include:

•our ability to successfully manage the demand, supply and operational challenges associated with the actual or perceived effects of COVID-19 and any similar future public health crisis, pandemic or epidemic;

•our ability to deliver products to our customers in a timely manner and according to their fulfillment standards;

•actions taken by large customers that may adversely affect our gross profit and operating results;

•our dependence on the strength of retail economies and vulnerabilities to any prolonged economic downturn, including from the effects of COVID-19;

•our dependence on sales to several large customers and the risks associated with any loss of, or substantial decline in, sales to top customers;

•expectations regarding recent acquisitions (including Osprey) and any future acquisitions or divestitures, including our ability to realize related synergies along with our ability to effectively integrate acquired businesses or disaggregate divested businesses;

•our reliance on our Chief Executive Officer and a limited number of other key senior officers to operate our business;

•obsolescence or interruptions in the operation of our central global Enterprise Resource Planning systems and other peripheral information systems;

•occurrence of cyber incidents or failure by us or our third-party service providers to maintain cybersecurity and the integrity of confidential internal or customer data;

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•our dependence on third-party manufacturers, most of which are located in the Asia Pacific market, and any inability to obtain products from such manufacturers;

•the risks associated with weather conditions, the duration and severity of the cold and flu season and other related factors;

•the geographic concentration and peak season capacity of certain U.S. distribution facilities which increase our risk to disruptions that could affect the our ability to deliver products in a timely manner;

•the risks associated with the use of licensed trademarks from or to third parties;

•our ability to develop and introduce a continuing stream of innovative new products to meet changing consumer preferences;

•the risks associated with trade barriers, exchange controls, expropriations, and other risks associated with domestic and foreign operations;

•the risks associated with significant changes in or our compliance with regulations, interpretations or product certification requirements;

•the risks associated with our discussions with the EPA on the ~~development and~~ implementation of compliance plans related to certain of our products within the Health & Home segment;

•the risks associated with global legal developments regarding privacy and data security that could result in changes to our business practices, penalties, increased cost of operations, or otherwise harm our business;

•the risks associated with accounting for tax positions and the resolution of tax disputes;

•the risks of potential changes in laws and regulations, including environmental, health and safety and tax laws, and the costs and complexities of compliance with such laws;

•our ability to continue to avoid classification as a Controlled Foreign Corporation;

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•the risks associated with legislation enacted in Bermuda and Barbados in response to the European Union’s review of harmful tax competition;

•the risks of significant tariffs or other restrictions being placed on imports from China or Mexico or any retaliatory trade measures taken by China or Mexico;

•the risks associated with product recalls, product liability and other claims against us;

•associated financial risks including but not limited to, significant impairment of our goodwill, indefinite-lived and definite-lived intangible assets or other long-lived assets;

•the risks associated with foreign currency exchange rate fluctuations;

•increased costs of raw materials, energy and transportation;

•projections of product demand, sales and net income, which are highly subjective in nature, and from which future sales and net income could vary in a material amount; and

•the risks to our liquidity or cost of capital which may be materially adversely affected by constraints or changes in the capital and credit markets and limitations under our financing arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the information provided in the section entitled “Quantitative and Qualitative Disclosures about Market Risk” in our Form 10-K. Additional information regarding our risk management activities can be found in Notes 9, 10 and 11 to the accompanying unaudited condensed consolidated financial statements.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

Our management, under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), maintains disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) that are designed to provide

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reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.

Our management, including our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended ~~May 31,~~November 30, 2021. Based upon that evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective at a reasonable level of assurance as of ~~May 31,~~November 30, 2021, the end of the period covered by this quarterly report on Form 10-Q.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

In connection with the evaluation described above, we identified no change in our internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act that occurred during our fiscal quarter ended ~~May 31,~~November 30, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

EPA Regulatory Matter

~~We are currently~~In our quarterly report on Form 10-Q for our first quarter of fiscal 2022, we disclosed that we were in discussions with the EPA regarding the compliance of packaging claims on certain of our products in the air and water filtration categories and a limited subset of humidifier products within the Health & Home segment that are sold in the U.S. The EPA ~~has~~did not ~~raised~~raise any product quality, safety or performance issues. ~~We expect these products to be available for distribution with the only changes being modified labeling or different packaging.~~ As a result of these packaging compliance discussions, on May 27, 2021, we voluntarily implemented a temporary stop shipment action across this line of products in the U.S. while we ~~ensure that all labeling is in compliance and we work~~worked with the EPA towards an expedient resolution. ~~The~~In July 2021, the EPA ~~has~~ approved modest changes to our labeling claims on ~~our~~packaging of existing water filtration ~~packaging,~~products, which we ~~have begun to implement. We resumed shipment~~implemented, and subsequently began shipping in limited quantities during the second quarter of fiscal 2022. The shipping volume for these products has continued to increase and, ~~are actively working towards similar agreements regarding~~in September 2021, we returned to a more normalized level of shipping activity. In August 2021, the EPA approved changes to our air filtration packaging and ~~humidification packaging in continued collaboration with the EPA. At our request, the EPA issued~~we implemented a Stop Sale, Use or Removal Order on June 29, 2021, which, among other things, allows for the movement of certain of our products among our warehouses and will facilitate rework of the affected air filtration packaging once agreed to with the EPA. We believe this is meaningful progress towards a final resolution with the EPA. The stop shipment will remain in effect until we implement an approved labeling and repackaging plan. We began shipping limited quantities of the impacted products at the end of August 2021 and returned to a more normalized level of shipping activity in November 2021. We have also resolved the majority of the packaging compliance concerns on the limited subset of humidifier products and do not expect ~~that~~them to have a material impact on our consolidated financial results. Our consolidated and Health & Home segment’s ~~fiscal 2022~~ net sales revenue, gross profit and operating income ~~will be~~for the nine months ended November 30, 2021, have been materially and adversely impacted by the stop ~~shipment. The extent~~shipment actions and the time needed to ~~which~~execute repackaging plans after changes were approved by the EPA. While we have resumed normalized levels of shipping of the affected inventory, we are still in process of repackaging our existing inventory of affected products. If we are not able to execute our repackaging plans on schedule to meet demand, our net sales revenue, ~~will~~gross

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profit and operating income could continue to be ~~impacted will primarily depend on the duration of time required for the EPA to act on our proposed solutions~~materially and ~~the related implementation schedule.~~adversely impacted. At this time, we are not aware of any fines or penalties related to this matter imposed against us by the EPA. While we do not anticipate material fines or penalties, there can be no assurances that such fines or penalties will not be imposed.

See Note 8 to our condensed consolidated financial statements, Part I, Item 2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including “EPA Compliance Costs” and Part II, Item 1A., “Risk Factors” in this Form 10-Q for additional information.

ITEM 1A. RISK FACTORS

The ownership of our common stock involves a number of risks and uncertainties. When evaluating the Company and our business before making an investment decision regarding our securities, potential investors should carefully consider the risk factors and uncertainties described in Part 1, Item 1A. “Risk Factors” of our annual report on Form 10-K for the fiscal year ended February 28, 2021 (“Form 10-K”). Since the filing of our Form 10-K, there have been no material changes in our risk factors from those disclosed therein except as follows.

Significant changes in or our compliance with regulations, interpretations or product certification requirements could adversely impact our operations.

As a global company, we are subject to U.S. and foreign regulations, including environmental, health and safety laws, and industry-specific product certifications. Many of the products we sell are subject to product safety laws and regulations in various jurisdictions. These laws and regulations specify the maximum allowable levels of certain materials that may be contained in our products, provide statutory prohibitions against misbranded and adulterated products, establish ingredients and manufacturing

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procedures for certain products, specify product safety testing requirements, and set product identification, labeling and claim requirements. For example, thermometers distributed by our Health & Home segment must comply with various regulations governing the production and distribution of medical devices.

Additionally, some of our product lines within our Health & Home segment are subject to product identification, labeling and claim requirements, which are monitored and enforced by regulatory agencies, such as the U.S. Environmental Protection Agency (the “EPA”), U.S. Customs and Border Protection, the U.S. Food and Drug Administration, and the U.S. Consumer Product Safety Commission.

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adversely impacted by the stop ~~shipment.~~shipment actions and the time needed to execute repackaging plans after changes were approved by the EPA. While we have resumed normalized levels of shipping of the affected inventory, we are still in process of repackaging our existing inventory of affected products. If we are not able to execute our repackaging plans on schedule to meet demand, our net sales revenue, gross profit and operating income could continue to be materially and adversely impacted. The extent to which net sales revenue, ~~will~~gross profit and operating income could be impacted will primarily depend on product demand and the duration of time required ~~for~~to repackage the ~~EPA to approve our proposed solutions and the related implementation schedule.~~affected inventory. In addition, our net sales revenue could be materially and adversely impacted by customer returns, an increase in sales discounts and allowances and by the potential impact of distribution losses at certain retailers. There can also be no assurance that fines or penalties will not be imposed by the EPA.

During the first quarter of fiscal 2022, we recorded a $13.1 million charge to cost of goods sold to write-off the obsolete packaging for the affected products in our inventory on-hand and in-transit as of the end of the first quarter of fiscal 2022. During the second and third quarters of fiscal 2022, we incurred additional compliance costs of $3.0 million and $4.9 million, respectively, comprised of incremental warehouse storage costs and legal fees of $2.6 million and $4.6 million, respectively, which were recognized in SG&A, and storage and obsolete packaging charges from vendors of $0.4 million and $0.3 million, respectively, which were recognized in cost of goods sold.In addition, during the second and third quarters of fiscal 2022, we incurred and capitalized into inventory costs to repackage a portion of our existing inventory of the affected products and expect to continue to incur and capitalize such costs as we continue to repackage the remainder of the inventory during the fourth quarter of fiscal 2022.We also expect to incur additional compliance costs, which may include ~~costs to relabel or repackage our existing inventory as well as~~ incremental freight, ~~and~~warehouse storage costs, charges from vendors, and legal fees, among other things. ~~Costs to repackage our existing inventory will be capitalized into inventory; however, many of the other~~Such potential incremental EPA compliance costs will be expensed as ~~incurred.~~incurred and could materially and adversely impact our consolidated and Heath & Home segment's gross profit and operating income. The consequences of the compliance requirements and other matters pertaining to our discussions with the EPA are inherently uncertain. Accordingly, additional impacts or more pronounced adverse impacts may arise that we are not currently aware of today. As a result, our business, results of operations and financial condition could be adversely and materially impacted ~~by these actions or~~ in ways that we are not able to predict today. For additional information refer to Part I, Item 2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including “EPA Compliance Costs” in this Form 10-Q.

The ongoing compliance efforts with the EPA related to our Health & Home products, as well as significant new regulations, material changes to existing regulations, or greater oversight, enforcement or changes in interpretation of existing regulations, could further delay or interrupt distribution of our products in the U.S. and other countries, result in fines or penalties or cause our costs of compliance to increase. Additionally, we cannot guarantee that our products will receive regulatory approval in all countries. Similarly, some of our Beauty segment’s customers require that our Beauty appliances comply with various safety certifications, including UL certifications. Significant new certification requirements or changes to existing certification requirements could further delay or interrupt distribution of our products, or make them more costly to produce.

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We are not able to predict the nature of potential changes to, or enforcement of laws, regulations, product certification requirements, repeals or interpretations. Nor are we able to predict the impact that any of these changes would have on our business in the future. Further, if we were found to be noncompliant with applicable laws and regulations in these or other areas, we could be subject to governmental or regulatory actions, including fines, import detentions, injunctions, product withdrawals or recalls or asset seizures, any of which could have a material adverse effect on our business, results of operations and financial condition.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In ~~May 2019,~~August 2021, our Board of Directors authorized the repurchase of up to ~~$400~~$500 million of our outstanding common stock. The authorization isbecame effective ~~until May 2022~~August 25, 2021, for a period of three years, and replaced our former repurchase authorization, of which approximately ~~$107.4~~$79.5 million ~~was outstanding at the time the new authorization was approved.~~remained. These repurchases may include open market purchases, privately negotiated transactions, block trades, accelerated stock repurchase transactions, or any combination of such methods. The number of shares purchased and the timing of the purchases will depend on a number of factors, including share price, trading volume and general market conditions, working capital requirements, general business conditions, financial conditions, any applicable contractual limitations, and other factors, including alternative investment opportunities. See Note 6 to the accompanying condensed consolidated financial statements for additional information.

Our current equity-based compensation plans include provisions that allow for the “net exercise” of share settled awards by all plan participants. In a net exercise, any required payroll taxes, federal withholding taxes and exercise price of the shares due from the equity holder can be settled by having the holder tender back to us a number of shares at fair value equal to the amounts due. Net exercises are treated as purchases and retirements of shares. The following table summarizes our share repurchase activity for the periods shown:

Period Total Number of
Shares Purchased (1) Average Price
Paid per Share Total Number of
Shares Purchased as Part of Publicly
Announced Plans
or Programs Maximum Dollar Value of
Shares that May
Yet be Purchased
Under the Plans
or Programs
(in thousands) (2)
March 1 to March 31, 2021 12,766 $ 219.88 12,766 $ 186,878
April 1 to April 30, 2021 55,930 212.32 55,930 175,003
May 1 to May 31, 2021 433,790 219.91 433,790 79,611
Total 502,486 $ 219.06 502,486


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in thousands) (2)
September 1 to September 30, 2021	5,557	$	239.19	5,557	$	498,671
October 1 to October 31, 2021	6,036	229.28		6,036	497,287
November 1 to November 30, 2021	466	247.75		466	497,171
Total	12,059	$	234.56	12,059

(1)The number of shares ~~above~~ includes shares of common stock acquired from employees who tendered shares to: (i) satisfy the tax withholding on equity awards as part of our long-term incentive plans or (ii) satisfy the exercise price on stock option exercises. For the three months ended ~~May 31,~~November 30, 2021, ~~65,644 shares~~there were ~~acquired at a weighted average per share price of $222.26.~~no common stock open market purchases.

(2)Reflects the remaining dollar value of shares that could be purchased under our current stock repurchase authorization through the expiration or termination of the plan. For additional information, see Note 6 to the accompanying condensed consolidated financial statements.

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ITEM 6.

EXHIBITS

(a)

Exhibits

31.1*

Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32**

Joint certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101

Financial statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended ~~May 31,~~November 30, 2021, formatted in Inline eXtensible Business Reporting Language (“iXBRL”): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Stockholders' Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to the Condensed Consolidated Financial Statements.

104

Cover Page, Interactive Data File formatted in iXBRL and contained in Exhibit 101.

* Filed herewith.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		HELEN OF TROY LIMITED
		(Registrant)

Date:	~~July 9, 2021~~January 7, 2022	/s/ Julien R. Mininberg
		Julien R. Mininberg
		Chief Executive Officer, Director and Principal Executive Officer

Date:	~~July 9, 2021~~January 7, 2022	/s/ ~~Brian L. Grass~~Matthew J. Osberg
		~~Brian L. Grass~~Matthew J. Osberg
		Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer

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