HELE - Earnings call 2 2024 | Helen of Troy Limited

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Operator

Greetings. Welcome to Helen of Troy's Second Quarter 2024 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Jack Jancin, Senior Vice President of Corporate Development. Thank you.

begin. may You

Jack Jancin

the I'll Good Troy's operator. The and to Julien as welcome for of brief Thank statements. forward-looking Quarter morning, Fiscal of Mr. the detail Geoffroy, follows: the trends. current Then is our morning Second Brian call the Grass, Ms. company's Call. COO, for with comment and CEO; XXXX Helen Noel fiscal and more on a the quarter will CFO discussion you, Mininberg, this financials will financial outlook review company's company's and the everyone, financial in begin Earnings agenda performance of XXXX. Conference Mr.

you this, will Following us today. have take questions we for

future anticipates, words identifying This other certain based statements conference are management's are believes, words may performance. similar statements. that forward-looking contain Generally, the or expects events financial respect and words current call to forward-looking on expectation with

from could conference uncertainties results may statements to of risks information include non-GAAP Forward-looking and be materially actual a number that considered subject financial cause anticipated are may also the information. that results. to differ call This

not not measures reliance forward-looking non-GAAP by an financial statements parties. non-GAAP disclosed to cautions information and GAAP are undue may than be information non-GAAP These other company information. The the to financial place calculated listeners differently alternative or on

can the over selecting I Press Investor and be measures will Investor that the company's then Before contains tables copy to tab. of to their release to call the by to like release Relations at that section now home Mr. parties GAAP-based the been www.helenoftroy.com. the over corresponding The all financial company's turn I website Mininberg. call posted interested a reconcile earnings the release page to today's turn Mininberg, of I inform measures. The would Mr. has conference the non-GAAP earnings tab Releases Relations on obtained

Julien Mininberg

of net the to towards we well quarter Jack. initiatives of efficiency strong and Starting of Good continue as sales thank the revenue includes majority everyone, work second for Today, with at joining returning in performance our delivering pleased earnings of results is and announced we projects. fiscal at our advancing executing how that expectations. range with per of expectations growth. beginning you, set of on the international I 'XX. to our brands results. share ambitious and wide high with a organization our I'm reported be came This us. our end Thank impressed in well as our we consistency as adjusted morning, you leadership improvement the the

During inbound lower improvement the SKU further realize flow on margins cash freight margin the costs benefits progress expanded quarter, generation. made We we and gross significantly rationalization. gross as we and of

diligently portion cash we our inventory a manage deployed our to also and approximately as cash generated continue of positive We free million of shares. repurchase to flow our $XX

delivering a our progress initiative to ago fiscal improvement has also cash half of been the resulted first this $XXX on a past perspective, the year million of free flow of several year significant, For half reduction $XXX levels. versus to over over in million the compared The streamline has 'XX. first inventory fiscal in quarters

to environment resiliency towards only also not products discretionary such manage entire in they discretionary demonstrate consumer from and as and spending challenging execution travel as across continued organization, strong macro consumers shift results the more which quarter second entertainment. our demonstrate through continuing away Our we experiences, are

that to on inflation shift been exacerbated by consumer spending choices spending. consumers tough forces all That make of has in types persistent patterns

of to Paso in move efficiency announced office to square assets. our will our in Texas, to our house our foot we be previously of a on which Subsequent the to rental the intend We long-term new initiative we quarter, headquarters, property. improve U.S. to facility XXX,XXX El the distribution of a expect as facility second closed end Paso, sale El of part and the

important Paso community. to our XX-year strongly and shared the El ongoing continue being associates proud company for area. With and the of dedicated our largest work role We El service it value expect the we and in passion are Paso an play hub, of legacy in our to

more In more are of these during to actions conjunction detail some facility, their remarks. efficiently. the will as El we Noel efforts making moves part with and the operate ongoing Paso sale of our also Brian organizational provide on

to Turning our outlook.

maintaining year quarter expectations, share fourth growth include which significant to per flow this and earnings to our gross year margin, are full ratio. improvements and We cash fiscal and of adjusted the net in returning net our sales leverage

includes and levels economy outlook a spending categories. especially our on and continued for slower pressure some consumer expectation Our discretionary patterns, of

the March. prepare in made on become for strategic our to finalizing next we progress her we Noel significant During quarter, continuing for includes CEO planning future. smooth a This progress to transition also Pegasus, executing as the further and plan

of macro Pegasus' pleased investments. team to provide needed remains significant I performance of will strength teams on we Pegasus Troy's deliver Helen of outcomes people and And strategic executing additional and reiterates current the we delivering fund of on to believe as restructuring and streams. strategic environment. its goals. help as Pegasus Pegasus through the am fuel financial challenging manage work culture very the the savings the work our continue our by track the nicely The we

create and discuss which during our purpose, our During actions plan on next values. will we for will timeless on. the guide our grounded shareholders October in value growth, and Investor It company's vision is deliver strategic to is designed next XX year profitable detail the our Day, sustainable,

CFO to on she to Today, to following my Interim the outcome the turn and in Brian will Grass, has to I its search. an believe ongoing embarks I on a will the an remain now as the team chapter position I agreement I great in over call who conversation with comment and Noel great make next would made on company Before our CFO of turn CFO Brian retirement. Noel, Helen like the a the as company Noel. announced basis. Troy we that over of reached to April returned selection,

Noel Geoffroy

Thank stakeholders and Helen a you, value us extraordinary his public Brian creating and with welcome career. to I to now of experience mindset so and delivering I'm an partner more on I We team his throughout I next results company results-oriented conducted search, the a Julien, have experience at national everyone. year. strategic good and assumed partner with and CFO the for in record enthusiasm concluded Troy. business Brian of deliver and leader, basis. me Troy's worked a will fiscal proven ahead collaborative next perspective. phase I us closely leadership thought I when He opportunities value enter his as as my growth-oriented choice delighted our our of company. a to for morning, April, company a together believe return a the CEO know we is deep Brian greatly all Brian Helen and have help and we position energy permanent back is his We and and passion, shares since ideal of

and Pegasus remain on enabled effectiveness initiatives Julian track efficiency our As in improved have fiscal 'XX. mentioned, and

in 'XX fuel our savings beyond. help brands also and We expect fiscal will Pegasus

about may streamlining our is recall, seven of major As organization. you Pegasus the one work all streams

aligns & initiated the with the we second a segment. Wellness the that creation change During of Beauty quarter,

colocation This Texas and and the this business, to Massachusetts Paso, between facility, right to our currently 'XX, product of wellness in El Beauty platform geographically sale is in commercial the area the the California, and move streamline, step in the our fiscal initiative business. Beauty enable is time innovation greater Boston, to we With synergies Paso with consolidate will to beauty business. which El and determined U.S. company's and is enhanced collaboration our the to simplify Effective that realize U.S. wellness. next co-locate deliver Irvine,

results. turning our Now second business quarter to

As net Osprey, well were end and a core in brands, achieved have months, share sales gains visibility. OXO, expectations. number of at our of Braun Julien as in including internationally highlighted, market categories Pur Revlon recent consolidated we and as the Vicks we better adjusted and our In where our EPS

Taking OXO, home period. to prior a U.S. stabilize net signs that to overall Home look sales the at were with seeing beginning categories. Outdoor, year in key performance are of is and the we Starting point-of-sale essentially flat

of the utensils While Prep and the decline capture has bankruptcy. as quarter category slowed. retailers' rate as from Carry kitchen key due after the part introductions OXO showed Bed in market continued gains Bath new decline OXO to strength & benefited System. customers benefited the distribution pandemic also from new the share such compared Grilling in to the brand Beyond peak, to product the moving from to

OXO expect programs. of year, to new distribution at Walmart the SoftWorks Our product ahead Overall, test in is and of by perform of perform the continuing we expectations. club select also gains balance well fiscal fueled introductions, OXO to

to trusted life, bring to your joy innovation turn from Consumers cooking to OXO bring common a marries creators cooking a the to Feeding where our experience the quality kitchen. products cook helps inspiring consumers' consumers with to One of everyday the residence goal, cooking, series a better chefs is example continue brand program, one in gourmet purpose. that chefs. with is source as for to passion and collaborative featuring of

celebrated by ago. introduce culinary We this weeks to few JJ. latest additions are and shafts the chef, Chef the Melissa's to Melissa also Johnson, Beard James award-winning Joseph known Baked exceptional were Ben-Ishay owner, a thrilled series new These as

continued beverage subcategory. the a The Hydro toward broader insulated to skewed category be in further Turning insulated to Flask. decline bottle with tumblers

August, water tumbler distribution in and XX, launch We pleased with business, continues it well tumbler expanded exclusively to our release online new July the effect #X travel and resonate to traffic and As late benefited an release our a noted from The Amazon. on we in reception. on we sport was we of #X June new strong soft our website, on to consumers. base bottles orders. to on halo drove including launched ranked I'm new hydroflask.com and in call, travel outdoor in in our The say personalized increase a product

on to retailers ramp-up up We began with October. in and further show rollout September to continued in shelf started

We Hydro and tumbler, an bottle season. holiday bike. as our also well the cage shape that of the the other ergonomic it recently your in bottle with hand well us position sport at sport launched does upcoming for gym the believe bottle insulated as travel Flask innovations We new in your fits

the the prior to position quarter factory fiscal standout performing greater by accelerated as inventory achieved XXXX strong Osprey curtailed now to brand and compared improved our Osprey. supply. demand COVID-related the compared fueled travel period, in closures growth Moving also engaging The when endorsement lifestyle in year quarter categories, to was new a Britain to well brand's and growth U.S. travel regions to and Internationally, with coupled the brand strong contributed product is marketing relevance and a technical, the Germany. Great supply, very introductions the of in strength of with key in consumers.

a Osprey outside reminder, of the As are approximately sales U.S. half

Outdoor industry place consumers. in in recent second the consumers a the awarded Osprey year with an important backpack event the in Germany, market third At category demanding magazine High phrase for row. in

growth expect & expectations. pack were the to fiscal of rationalization our driven year XX.X%, and the continue in with on-trend in but and the from sales primarily and by adjacency. our backpack Beauty fans, Switching line Net both softness core heaters gears SKU We in humidification, travel Osprey half Wellness in segment. in declined back the to now

and In quarter. sales tools our appliances our the Revlon expectations in drove ahead beauty of portfolio, Hot

In distribution Curlsmith, with incremental support coming retailers. liquid in-store year. We grow new SKUs the newest two as achieved seeing and strongly meeting at brand trends are prior our within year, in major to liquids, versus brand, expectations the additional line continued and brick-and-mortar Revlon balance of Tools Hot improve is continued prestige Ulta the our

to in industry recognized The Volumizer Awards, results. beauty Drybar, Crown by delivering salon-like Allura's of smooth One-Step portfolio Tonic earning September delivering People continues benefits distinguish and styling tool was superior alone, Beauty Best consumer for brush the recognition. In best while in Drybar Revlon as itself both selected important hot shot, were Magazine

standout water collaboration portfolio, well the picture for Helen systems. year. awards industry at our also mount as Drew growth improvement four was Beautiful sequential faucet Walmart. systems market this to a Pur have faucet by launched adds Barrymore both in as share In an by received category available our mount the This exclusive brands and and driven with picture quarter, purification wellness separate already only

This North is our placement of Pictures opportunity in new American in fastest-growing team and environment. Dollar. and Pur addition, secured relevant this our of promising channels In inflationary the of Family one RMO a one

investigation pleased Pur for forward are by our is As favor with invalid. in reducing the extremely terminating commission the it filed look International American there patent to to Trade action violation we found issue recent relates contaminant because decision at consumers' We to Commission the Brita against The of the no need was our continuing company serve our products, Brita filters. Pur. lead

Air purification quarter. to strong also sales in a was the contributor

mentioned we the period COVID variance. device of the purification on well As Despite air incremental category that of The sales surge quarter. when category quarter call, share consumers in Vicks grew wildfires impacted and Canadian the as drove 'XX year soft the prior as summer its inventory our compared July improvements. and U.S. the the to Omicron humidification softer sales, the filter in experienced was

market thermometers, most branded branded Braun is while in leader remained in post-COVID the sold. in the U.S. thermometry, see leader where market our We and and international with Vicks in In countries we category, of continue the U.S. thermometers normalization remains remain to the strong sales the Ear strong. Braun it

international, growth driven in and the is well Germany. More as was having European by brands Braun both also in did sales on major markets. U.K. broadly, Revlon very and both Osprey success

international U.S. a are strong of organizational we and design continue structure new to ahead was avenue X. the the for we integrated strengthen remains operations We our of outside and opportunities as growth and and September us, sales International see optimized us marketing implemented and excited about our

York. to at site like we next a prepared with thoughts I'd will strategic market plan, in my planned October comments for our be at XX Day New today NASDAQ on discussing few company's Investor the the close which

be profit and of Investor also efficiency and the specific outstanding Day, consumers business and outlining delighting family our services. brands regional we'll our units, to and with by see opportunity focusing long-term deliver improvements considerable We our global growth shared on effectiveness further market of targets. increasing During organizations our

opportunity shareholder priorities see the to creation. help accelerate value also capital right setting We continue to

the you. to that, our goals with to online forward hand leadership person like I'd over ambitious look Our team webcast. hope in and to or sharing can for either I you with We join call the And Brian.

Brian Grass

strong appreciate words, to on Noel. forward of we of our Day weeks, I'm I to the stakeholders. to I all to launch out long-term you, we plan. and to Good next where we but you, enter echo I'm Thank company trust, look at multiyear you our plan of the morning, opportunities our value. leadership rest in next the with of everyone more alongside and share our Julian team your excited sentiments my create CFO I opportunity the importantly, hope strategic in and as 'XX see to maximize everyone. deliver working finish as fiscal shareholder looking kind and role in and come our the for of your retirement front as Investor partner a will couple era. more

repurchase the to capital efficiency. taking our We to net shares results our X.X% our strengthen better on pleased deployed growth or strong I'm X-year cash report compared same improve expectations. also the Moving of flow decreased second of end to and significantly further asset quarter. on gross year at generated margin, X.X% improved stack. and sales the X.X% of a to balance period our Consolidated sheet last in growth to steps while

quarter be were July. provided decline Second to in net in to outlook X% our sales to the favorable X%

impact efforts Bath our of Beyond reminder, includes As our and bankruptcy. a the from the SKU declines rationalization expected and year-over-year outlook Bed

XX.X% and distribution, categories sale the we our XXX for supply expectations with pleased interest drive compared product in to to profit inventory. of point the to we to last points of impacts rates, growth signs same with and basis year, in that inflation seeing the better XX.X% new line Despite beginning stabilize, quarter. period are higher key Gross expanded improved were introductions are of and margin

same inventory Year-over-year inbound was favorable costs, favorable impact and lower and improvement reserve freight customer due of favorable more in mix expense, year. operating to compared period impact comparative the points lower GAAP home in last SKU the a rationalization, outdoor quarter incurred the X.X% of margin XXX in year. was same to for X% basis EPA costs of the the compliance last period

to XXX due product less declined mix increased facility in the distribution primarily in unfavorable opening and margin marketing points favorable operating basis, state-of-the-art to basis of our new leverage higher The adjusted XX.X%. compensation distribution increase expense, annual reflects expense operating decrease and an Tennessee, wellness. an expense, incentive in beauty and On depreciation a

and home in operating These factors costs, were partially than the a customer decreased inventory the compensation lower basis mix freight by a customer distribution depreciation a On incentive points offset and impact reserve to Home offset by expense XXX partially outdoor. and lower the expense, distribution costs increased mix. XX.X% freight Outdoor factors SKU inbound favorable adjusted annual and favorable facility marketing new by driven These rationalization decrease a and outbound more of higher and expense. segment increased margin to basis, in expense, favorable of were and more opening inbound due

Beauty for leverage expense expense, annual favorable margin to decreased operating and expense, distribution higher decreased to inventory were increase X.X%, by mix. points impact SKU lower and and an XXX operating factors compensation reserve outbound reduced costs, partially and product These freight offset favorable due marketing expense, Adjusted rationalization. primarily incentive in the less basis of Wellness a inbound unfavorable

was operating income. million due diluted decreased EPS share. to to expense diluted Non-GAAP per or primarily $XX.X adjusted lower $X.XX XX.X% $X.XX and higher Net per income interest share, adjusted

flow operations an $XXX year-over-year. with Year-to-date We continue $XXX from cash of generate is from million which to quarter. million, flow in operations second million was $XX.X cash cash strong the of improvement

stock our in million, with is of slight sequential million of on the despite a debt $XXX the total quarter basis the a of ended increase We $XX which repurchase quarter.

of and X.XXx the at X.XXx compared at time leverage X.XXx Our the the ratio quarter end last year. same to net first was

on of second closed a rent mentioned, sale we facility entered free. end for the of to lease Subsequent total back of the our XX period proceeds million. the Noel an distribution substantially into agreement Texas Julian $XX months, As Concurrently, to and office we quarter, El Paso, of the to up for facility office and

approximately sale & in to expect $XX home We $XX of the be and the million a 'XX, fiscal of $XX million which and approximately million outdoor. of SG&A Beauty in recognize on will recognized gain in quarter during Wellness third

to Turning outlook our fiscal for 'XX.

net for and consumer our maintaining some leverage anticipate still are economy for free cash and We in EPS, slower net adjusted year uncertainty full expectations categories. ending ratio. spending patterns, especially sales, We discretionary EBITDA, adjusted a continued flow

Although in expectation of we've our seen outlook and the during third a retail a general inventory, the includes quarter patterns decrease fourth quarter. the ordering retailer ordering more in normalized cautious

sales year-over-year We $X.XXX net SKU continues Beyond impact & unfavorable and in reflect X.X% of between rationalization Bed bankruptcy and continue Bath $X.XX billion the expect consolidated the 'XX, estimated billion which combined. of to fiscal to approximately of

home In to outdoor outlook and to segment, terms sales growth of decline we of net our and of a the beauty and X.X%. decline expect X% by wellness X% X.X% of

$XX be expect completed which This substantially the be by $XX million compares of our which end in noted duration the of updated estimate approximately expected pretax we favorably regarding million, expectations restructuring Project to total now issued our have the over initially our fiscal We million As of to was to Pegasus of morning, 'XX. charges estimate lower $XX now million fiscal approximately $XX previous completed charges. earnings this we 'XX. to to release plan during

our of this referred in of geographic potential our our impact assessment issued is Partially the increase release exit a consolidation estimated one revision offset beauty favorable earnings to the of an from due The a in from restructuring morning. reduction in wellness businesses. and charges by to

to an for expectation We sale to EPS facility, restructuring full as previous of the quarter. the on expect in third Factoring El year to in the our in charges expect $X.XX. $X.XX well $X.XX gain recognize in compared $X.XX diluted the now increase as we expected GAAP the Paso the reduction of to to

of and in adjusted annual incentive well additional higher expense depreciation reflects $X, the tax. of range to interest of target $X.XX $X.XX net to the to which restoration as expect approximately totaling levels We compensation continue EPS year-over-year non-GAAP from expense expense diluted as

Moving our full to XX% GAAP fiscal rate of adjusted XX% a non-GAAP on effective expect effective We tax now of tax range to a rate outlook. range XX.X% for the to year tax and XX.X%.

now concentrated of terms X% net expect quarter. third fiscal in growth sales approximately quarter net and be in in cadence, the In the quarterly of of to to sales a X% we 'XX, fourth decline

the the We benefits the costs continue debt inbound second of and to in to realize deleveraging lower freight of expect product and more half fully year.

shift adjusted be growth X.X% the growth now highly expect that 'XX, the diluted of we savings concentrated the short expectation of the the reflecting patterns the adjusted fiscal an growth in fourth sold roughly order of investments in half company fourth increase the of in third EPS of with and in quarter. goods EPS in in second the some range quarter, retail a to the in flat into third more Accordingly, cost quarter cautious XX% diluted expected realization to The expects in term, timing in quarter.

$XX million facility equipment. We the cost will line includes new approximately capital asset continue which installation its the of of for facility of with largely state-of-the-art still its distribution equipment in final expenditures between $XX automation of and expectations. million to $XX full that million the our fiscal original expect for in be We 'XX, and the completion expect our

free needs to $XXX to X.XXx With to million fiscal ratio by Xx fiscal be in of to in end 'XX. cash expect leverage to and 'XX, continue be million between CapEx flow the range $XXX of lower the we net our

depreciation million repayment structural margin return accelerated EBITDA to leverage. interest points, adjusted debt maintained improved $XXX well and our headwinds despite our performance track us flow, our In basis keeps Year-to-date, the consumer by unfavorable margin am financial encouraged headwinds annual key I'm our as shareholders. compensation and pleased in expense. navigating we've advancing I profit full of objectives. higher initiatives to environment gross business year XXX closing, while the as structural Generated and capital our free incentive achieve in by on progress with pressured which year-to-date operating cash

Pegasus steps culminating remain took our the further of Paso balance improve We sale the that strengthen drive efficiency, for after initiatives you with with operator our Day. our look the to the Investor end sheet improvement. sharing our during financial to longer-term facility further questions. provides I'll and with turn about to back opportunities performance to asset of the forward excited We that, and And El strategic the also quarter. objectives We it

Operator

Instructions] [Operator Labick Bob Securities. is question first Our with from CJS

Bob Labick

Congratulations to Brian.

looking glad to with and continuing we're So you. hear to work it, forward to

Brian Grass

Thanks, Bob. Me too.

Bob Labick

quickly, congrats down impact very of me you tell it result solid It's comment And I of last it exit on change to a on businesses, your the quarter. the costs, potential all I another in your maybe the exciting. wanted could comments Pegasus to as that one if heard or if from start elaborate with a correctly? about Brian, of of wrote I there, one

Brian Grass

correct. That's

portfolio the that's estimates original the from and there exit the business was today. consideration restructuring So amounts in of in currently our charges, a designated potential a for of

don't range result. and feel again, and today. that was that could But there a disposal updated opportunities it that of we there still be and potential result considering would a but have result and that that our not have for updated charge, exit, is it the the in initial that belief likelihood assessment revised some restructuring costs would that exit that and are not we assessment costs whereas exit revised have was that performed We as a our of we, -- concluded have

the we And that decided so range. it cost should out take restructuring of we

Bob Labick

know, on about at that this will I -- the upcoming a Analyst what's might soon? I'll drop the is more -- change Does [indiscernible] don't timing is it. hear we learn that when we more guys this Or what's I second, the guess, Day? this -- mean other decide, Got there? you that Or Might in

Brian Grass

work to we time. to Yes. do at mean this I in have project. point report continue We anything on this not

it's think are likely to be to able in going the when fiscal with of quarter share something first we you. more I 'XX

Julien Mininberg

lowers Yes. something good now. more. the year, it on definitely report, we news we'll good other. It's side a basis, it is or a one other speak the be we charges way the and restructuring portfolio have will total news Within It's on

Bob Labick

release of question be progress I going think Okay. And a making Obviously, wanted was lot regional just you -- distribution on there. gains discussed the in first the to on Great. focus press on some the And already of new my marketing sales you're kind then organization, to Pegasus. front, the go back there. really I

maybe give sense turning any anything to that's or a result than North positive you of progress RMO. of a the thought us harder a out surprises as American be So little new

Noel Geoffroy

Yes. about at American market you indicated, Sure, and Investor that Day. choices I Noel, morning. I and we out, from as more mentioned speak as with Pegasus the say, hear this you restructuring. Bob. This good And was made you to and this would changes North called regional is of in organization one the biggest the my remarks, we'll actually

of Ron have this might that Anderskow either we portfolio, we where that day. -- we across we opportunities with leader, for our white look space customers, that. did customers on new this all them could organization solely kind the go have new not we scale that with we focused to opportunity after But so but them, our us with looking brands, could or presence saw at our distribution of an As and distribution with play of some we

So things. pick to we some up of have started those

beauty, retailers. Pur, today. on about Family talked shelf about mass space distribution mentioned that dollar have our increasing We've talked I of We in Dollar distribution, some

quarter of year in particular, is confidence at we in back we'll X. half of are some us I X, in in, see this look part and gives And at the what what quarter of to wins. continue of which looking we those getting those as think some we're So things layer

Some of the results move. of that

together. teams But really don't period. just come to couple meeting how -- always, et put as I months just big had probably and national when actually people is in cetera, We They the delighted wise, thing leadership team sales week that of was the a a were at together a just ago. so you're ago. settling different are moving or I've know organization leaders, the been Challenges reporting biggest

a So of the the fantastic. really organization has that as and been team enthusiasm energy single

Julien Mininberg

said, Yes. the though and continuity all is leadership just largely the teams By even focusing restructures design, and the the it's people and ways the the to same externally by purpose design. that on

benefit So the are not power but it we sell when the market means. says, further a Noel sees the only as There's scale other people business focused of way units that the on adapted, the and the consumer. side all at more even the what to

as shopper even part. facing opposed obsession more focused to facing the market and more innovation -- becomes So that handling sales

Bob Labick

one, back And Super. us a the innovation you there. mentioned in just they've introductions I I'll how product compared new give queue. promise, obviously, forward going mean Can sense in versus of last as how And Because past? I just Okay. jump do we're you growth big probably poised said, pipeline resume kind to you new looked? product think I that's forward of and expectations they've shortly, innovation and But for a on you where it. part very versus of, introductions going stand the --

Jack Jancin

the the as innovation marketing a and new marketplace important both Yes. or innovation to Certainly, our we new ways as of innovation, products our all new position what I in is product call claims, very ways consumer well in from of our reaching brands standpoint. segments, continue feel new commercial to

continue lot of to on that. see I So emphasis a

that innovation the that to focused can consumers, got we We've mentioned, with categories year, travel. Julian got OXO adjacent to innovation and the the innovation did. underway. also has fact, units Grilling always in fridge and is put that go business the market into brands, in out structure great continued now. continues Innovation Carry, went some so reasons have out like been has this as next just strong. We've on the In We've now take some level, of the Osprey come fully organizers one market. coffee. was that that we the we terrific organization had Prep

the the It's new launched many Beauty then Drybar just the interesting for that's bike sale a last Hydro Flask that brand. not Hydro lot now consumer on and is quite but Curlsmith tumbler which portfolio, the Osprey, unique a launch in We've we up announced formulas a launched in quarter. distribution of ramped the for out course, soft needs. sport new shape. And of new addressing a launches there particular, for Flask, and for across bottle, yet, wellness travel vesture in really

a that and both lot of commercial well. in anticipate about So we our forward. the talk we'll more I side continue to have portfolio, innovation going as across product the really the of And more continue on to XXth the and Day on Investor that

Operator

is question Oppenheimer. next with from Our Rupesh Parikh

Rupesh Parikh

class day your you was And So curious your in wanted a of I being I more to provide normalized destocking. confidence then to on seeing more terms go this if getting back to in trade. inventory ordering color you're in where back categories can commentary just QX? inventory

Brian Grass

the cadence So be kind repression as of and might visibility. we yes, focusing honing of on quarterly basically our and get greater

patterns, why is low debt first generally in and we things ordering view, term the are retailers Retail impact. of ordering the seeing of cautious our the them as keep January. And more a in patterns ending in levels, are is fiscal like short years line December factor We loan in which with generally their half year. in at student lot mind, seeing in are QX inventory

in the want that. to to the clarify but see I we that more we're slightly say release. year, normalized is in QX what press more first half the think of really trying said being line I with we below And

XX.X% out want QX in the comparison is QX a prior the of XX.X% I point also to that decline decline. the comparison is whereas year, kind a

stronger explanation So why that against to be of comparison. we part to that's the as QX expect

some We QX expect going QX, out benefit supply as hurt are we but isolated to come had -- also definitely of those. have components we that we'll on certain pinches

are then past, the secured those We're marketing be were we the in the it investments QX. in of the in out, in also fourth first gains to fully of called half and about the but year, into secured that and talked -- more half we've have and will And those going year weighted back the made distribution quarter. more layer we we

guidance QX. marketing investments QX, which tried the also we those QX. of EPS investments marketing more even drive shape kind from make in we guidance And for expect view to in to for we when called expect We our more our out of

hope all cadence honing and that our of get I And see we visibility of this year. through greater makes as a as so the halfway quarterly we kind get sense. just really

Rupesh Parikh

helpful. that's No,

thought quarter with like So full it maybe fairly what the guys Is sounds is the characterization? fair last for you overall backdrop year. that demand consistent a

Brian Grass

and fair. of a it's takes shifting and think and I lot There's speaking, I'd obviously say puts But generally moving around. that's fair.

Noel Geoffroy

Yes.

we money. think case that's the kind and making I been as and what into assumed choices consumers spend as of year. And talk, we are we I -- generally, where came we see this their mean, they

that that kind at don't they inflation see year. changes major things go of we repayments, they through the see as of their major some of back don't mentioned, in look loan look So half the -- student as we the in the changes at Brian we

Operator

Our is from Susan with next Anderson Canaccord question Genuity.

Susan Anderson

send business, rebound, maybe look me with too. it particularly are if on and Brian, Revlon. tools the rebound just any in like prestige about to you're in particularly back category hair to innovation thinking in at as you have the you the I mass there? new sounded you're I'm my curious And starting congrats half? guess nice what you're to Let seeing seeing at category, the for beauty of It's then board. kind Drybar what

Noel Geoffroy

from hear you. Good Susan. Yes, to

lot see of we got So the lot in momentum out some I couple as I is what a we the would the is a in say as there innovations say would continue business, of to liquids innovation Prestige, consumer business. things those But right positive are are our We've and strong see is. now that best more we liquids spray performing money, liquids action. on control spend I sorts more are thickening of innovation performing. see a a some where us where got quite forward. coming that's future to to make right what doing for as other the the now. we're spray, things, is that We've well, on -- say would I tools mentioned not business look first well. tool in liquid particularly our It's choices doing looking there. are these I seeing

Susan Anderson

at Okay. Great. levels just kind comfortable we guess how general? of the obviously, year, consolidation. into and how just on just a in feeling inventory you the had levels. I inventory of lot channel feeling retail. maybe going sales of are just season the curious about I'm Last you're in then follow-up the And a holiday cadence

Noel Geoffroy

asking? a holiday that Just you're general Is outlook. what

Susan Anderson

Yes.

Just and fourth shifted comfortable where in you levels pockets in of general? just the you're inventory with of sales mean, guys out there's kind you higher into terms feel the industry Do do there, I also like quarter, I feel then at mean, of inventory? still getting with

Noel Geoffroy

We've in retailers year supply a year quarter businesses some Yes. I retail load to replenishment levels, the where retail Vicks and line at do more would seasonal of Brian would as done like news -- say than The had supply year. mentioned, of more model this prior ample on couple very consumption. and we've consumer this Vicks. where of cold with in less X X say, with items inventory right is good in in quarter X, somewhat relatively our cough, a a I in got quarter those more want of places, aren't humidifiers we a seen the They're have high now. and in levels like couple low of consumables

those ready we're orders when for come. So that

see continue question, well prior good see season. always kits. to to and during we I in the good holiday we in Kits interest Curlsmith think your Drybar holiday, interest -- very coming do

well, on getting these of of things new that more liquids combination those our in and business retailers So strong gift sorts are tool traction holiday parts what and on the of are from we're are nature. the some of that preparing doing

Susan Anderson

last, about helpful. on environment able if how being there? to That's attractive M&A And something any of target, you're buy and opportunities you kind Great. to guess Okay. as guys just then curious leverage potentially seeing out And that Xx again? feeling just closer I just the get are you

Brian Grass

I think or coming expectations. our that line down maybe is in even ahead our of slightly leverage

puts and good position. positive that's So us a in

as is make year question the we're is but there/ would in able say we flow But the we assets a there to are is seeing out other part Xx, of position a definitely what think end available, acquisition. I your be to and add of being I of get quality below an would I seriously meet something, as that lot criteria. our that assets Maybe in criteria. that you a say not would the our market know I want currently Jack? don't strong in to well. that meet is Jack we not here terms consider regard

Jack Jancin

find that been There right. items things last assets just more X in starting it the right look, got to fit and months. criteria we're going we we Brian's it's are is continue the lean is when We're that those yet, looking and think certainly it, come what but is the in flow I ready. seeing inventory is when to for. not that versus or would to one But we time and into

Julien Mininberg

You've it's here. before, we're Susan, seen Julian picky. us

and find the So right heard as prices such. one not the on come on excited market, down, all in quite you the we're were wrong picky to just that asset. the We're equilibrates eager dependence

Operator

question from is Raymond Olivia next Our with Tong James.

Olivia Tong Cheang

of questions A couple first. Great. clarification

change? want their of they're the due QX expecting sales just in I a doesn't inventory think QX. of adjusting that less the Just hand they to Or because -- to decline element inventory on forward they lease it's don't and sales? orders on retailers appropriately, are indicator inventory the hold drive sell-through, understand but the Is to QX that don't looking to much as more versus the need on lower they they actually

Brian Grass

Yes. a of think be And the two. it I could combination

to and I expectation them the weeks a talking as about expose year. are they're think little also cautious to they're reflecting And being seeing. for demand end I an they not see what of forming generally their huge bit definitely would of on what risk trend less then wanting maybe margin, am fiscal in a they inventory. themselves expecting like ordering, hand adjustments, on less I'm to general I they but their hold

two about of year. wild and not things also talking that, I we're to occurred adjustments combination I those So say have it's inventory that but make point last that things, would would a want the like

revenue to quarter. I think it's the third on enough an more But for us marginal -- do for our adjustments margin. adjust those impact to that guidance the have need

percentage points the X X or terms but of our in revenue to quarter. hugely change meaningful not it's So for enough

Julien Mininberg

including your brought means Maintain QX. out good which we we back half the that exactly today the Yes. what guidance, and produce will [indiscernible] that news said on

be the full up a is reactions idea And may price that rejiggering even So what Brian on just at I said, in looking reaffirmation year we're of pressure think hung back between saying there's and exactly QX cadence and of QX the there people the half. stock just the this early results. what the of is

Olivia Tong Cheang

a the of is it. sticking you've the this you obviously, a full time. on that of year about still the And you've already historically on The outlook cadence. outlook. And we're line by tried QX wide talked sight versus year pretty past Got then narrow midpoint bit to considering just the range QX

end you So provide the some high the versus goalposts low at perhaps end initiatives can just potentially you to range. that of the the what's maybe on embedded gets

Brian Grass

Yes. I it's think good We call I a something mean narrowing. out. -- considered

And I especially macro in maintain agree environment there's of recent you weighing even that I it wide for hopefully ahead and range, though on QX. have does let's result felt a range, that, we going the the like could would that in an including all lot think very go impact. things, a think

that's with around to environment, I the the I ranges, different year. know to it to where in we a and over half been all from but conversations range made to have our least variables a of you've always of focused history, like account at on keep seen of steer the history, -- second the we're end the and like of could wide a towards part felt our sense every uncertainty like that change course high think, -- I've hopefully, we'd the for of the lot

on our initiatives. if I of QX got lot know -- we're question of QX, in feel the on anything primary and versus a in QX cadence. -- us add the don't we know lot of don't out. left in top of strategic like called you've potential upside that confidence room to hit things call want there drivers that. drive the if items all out being that or and of items, some are those would for QX We to downside follow-up factored on previous very feel It's and about I I if I about those give of impact answered forecast, kind But our good about going a a you questions able our I to we forecast.

Operator

Our next UBS. with question is Peter Grom from

Peter Grom

Thanks, operator. morning, everyone. Good

it's expectation on your from what year if the to margin maybe to apologize And a to look Brian, I'm you I the that speak business still to can So XQ given out be potential how case to quarter, expectation does Pegasus is the full the as I margin missed build? gross more And savings the inform around in that for to phasing like I you more fiscal that's phasing, outlook? still for seems if your which at weighted the continue gross be gross the the this, of in particularly remarks. fourth so, outlook margin is XX%. 'XX, guess But as if here view really the perspective trying terms challenged change the this get given in to

Brian Grass

Yes. Good question.

our implied We the from in with just that's but margin year original slightly that shift impacts a are mix And are -- revenue end seeing profit lower guidance. really gross will -- on. the going in that margin shift

no that structural concerns and concerned 'XX. we're about fiscal nothing year about So

talked really kind still of one we're achieve in So percentage into in the expectation year within our elevate decrease structurally, the impact full gross in to we margin point 'XX. And profit and and it, our profit year call The margin Pegasus through realizing mix -- half freight still through year our gross portfolio. savings 'XX. commodity have the I'll and shifts about that is ability see second fiscal we've due fiscal to margin what of

Julien Mininberg

from it on about we Peter, there that no continued confidence Pegasus. impact your our can build comment of because

savings Pegasus coming cost projects. goods related from work of So has the as XX% stream ramped, Pegasus remember of are

reinforced in nicely track. her about Pegasus As Noel on comments

published fiscal can for 'XX, falling such but COGS, in be gross that gross -- will say only a is of from we to or are number, reiterated the margin build et not feel target which now into that 'XX, cetera. Pegasus' now So it's 'XX with fiscal margin confident big XX% gains big there used we keep

Noel Geoffroy

still And reinvestment opportunities. have

Julien Mininberg

Yes.

more the because now, being Day even higher of our positive year, gross reinvestment only the have forward. which more Pegasus by Investor fact, In the higher even at gains opportunity a but in very a Imagine you going idea also get more flywheel, there's margin not fuel into fuels of in gross a for growth, dynamic. also margin a from coming to not reinvestment, resulting fiscal this fueled further which and but dollars Pegasus, the sustained fuels start than

Brian Grass

a asked about question cadence. you Peter,

bit off around of would in want So QX, X.X%, I that's the profit cadence roughly higher for X.X of that remainder of in platform say, percentage QX, maybe then point kind the gross maybe increase and little speaking, in you a year. if a the of QX the

Jack Jancin

that. clarification Just on one

basis to so just the QX, So QX? XX relative the is points basis number, QX call clear? Or points to the versus it it low XX, relative is so XXX

Brian Grass

is basis QX. XX the relative to points So

that So for low said, top and XX QX. points then of like on you take X.X

Peter Grom

picture. guidance. embedded we're you're point would then pretty And just out. expecting clear Yes. of characterize sure that just not your to in return a the ago right? going mean But your we're in would growth play building Okay. really last you pretty I the and of kind just not XX, me, just I were half of Brian, kind more cushion you a [indiscernible]. visibility, that you've didn't low XQ mean challenging QX question what long off been predict XX, environment was I that be bigger revenue I it the number to where is happen. it's off curious, of for How the like enough a of to making was kind

I look and bigger stage out So just XQ picture do much question. this you would as How you into at to visibility think have I guess year? you next

Brian Grass

to mean to get of that's your it's retailers us and our think, overall, good. I did at we say, I change a I retailer we make point as that, reflection a I'd of perfectly listening about can't that staying soon we kind in close that predict as reflecting and to what is having adjustments of visibility. And say adjustment the the look, get year. beginning they're

of it focused So being is as talking loan some retailers, responsive to on student are us aren't shows and to repayment hopefully, them what and very very others focused. our

so that reflecting And layer adjusting them make can't that and And soon of not as blanket because, it have of confidence the even would that get are. I all and understand to said, a hopefully, we that as some and it's you them opportunity. you some the come it but the beginning some that ones this like adjusting takes. adjusting I and that can't year, gives all predicted some of have retailers you And the at to which we another puts in and to because and up market that's are of have that, statement we're and say a our staying us to close to would reflection visibility -- of

kind forecast on think our heap and of based the mean macro we're can. I and So things as going visibility our well now, managing I of puts and on takes as right we

Operator

Bolton-Weiser Our D.A. final Linda from with is Davidson. question

Linda Bolton-Weiser

Yes.

did repurchase here And have your with of you repurchase Maybe more do already I X%. putting some that million So your guess, knowing just going used to you I all thoughts you cash talked just versus that just stock a you $XX of ammunition. view the the little some Or on share surprising wondering, repayment. things it's ability comment on kind I'm there and was debt macro down is about could curious about, further the towards your on there? some share environment these

Brian Grass

we our even that think the investment. our to and of the of shares, we've think is the No, a was primary thinking get of the year our better all share good still I don't by X.XXx. repurchase to of able end And that leverage the target repurchase used ammunition, with were the end we

a do capital shareholders. And thing some so return to was great to we to thought it

El Paso able the was that, We a the sheet position to to in of very thinking view factored sale the helps facility our that us strong also and which and be into balance do a be also generate, would proceeds reasonable it. had on

both our those get So view low very were to it of We're and are to the as I at year, leverage target we end for repurchase shares. me, a able able the positive. win-win. To

Julien Mininberg

We the prospects couldn't on In a a agree Remember, timing, are long to for know our I more. terms of too. game. going of lot I people call we're lot. like this

revenue, gives margin, from of think but from to flywheel only I Investment the the basic to That is innovation in the expand in profitability not drive the savings just drivers Distribution growing. also you us is the it leverage, at ability other to give expand but not Pegasus company. do and fuel which basics. creates ability further in invest answer has a the the the do believe company operating and room acquisition gross to ask profit higher ] a [ growth a all at and more should speak, X from that acceleration standpoint yes. sweeter we see mix, so margin,

certainly with Xx, at this long-term opportunity and about it proposition short described right now, our he's leverage lower want is that we you and that for spent expectation stock, market creates allocation the market, ratio yet for term sound exactly and haven't of least Brian below buy the talking So to our means fundamentally depending us. the skittish is makes that plan that

Operator

I turn over our back to question-and-answer We have like management comments. of would session. reached end conference to for closing the the

Julien Mininberg

we later also providing We you, reiterate make to quarter the full as fiscal our this our for look Yes. today. forward week strategy of for of We're with on to very longer-term calls detail us and this everybody, Investor on XXth various our pleased speaking Well, and year our a you operator, during month. Day in any thank and the for thank the outlook position with guidance 'XX. joining be you, to

thanks very that, much with simply wonderful have a day. I'll and So say

Operator

conference. Thank will you. today's This conclude

your disconnect thank lines your at for participation. time, may and You this you

Helen of Troy Limited (HELE) 4 Oct 232024 Q2 Earnings call transcript