Dive Brief:
- Helen of Troy’s first-quarter earnings showed net revenue declined 6.6% year over year to $474.7 million, according to a Monday press release.
- The company — which houses brands such as Hydro Flask, Drybar and Osprey — reported gross margin improved from 41.6% to 45.4%. Meanwhile, net income dropped 8.2% to $22.6 million and operating income increased from $33.9 million to $40.6 million.
- Helen of Troy adjusted its organizational structure as part of its global restructuring plan, consolidating into two reportable segments of the business. The company’s beauty and wellness segment saw net sales decrease 5.9% to $257.5 million, while its home and outdoor segment saw sales drop 7.3% to $217.1 million, with both areas seeing some impact from Bed Bath & Beyond’s bankruptcy.
Dive Insight:
Despite declines in sales and net income, Helen of Troy’s first-quarter results beat expectations that estimated net sales would decline between 7% and 9%.
“I am pleased to report that first quarter financial performance exceeded our expectations despite continued pressure on certain categories from lower consumer demand and shifting buying patterns,” CEO Julien Mininberg said in a statement. “Our retail partners now have more normalized inventory levels and are increasingly matching their orders to consumer demand after significant adjustments affecting nearly all consumer discretionary categories over the past year.”
Within its home and outdoor segment, Helen of Troy experienced a decline in the insulated beverage category and an increase in online channel sales with stronger demand for outdoor travel products.
On a call with analysts Monday, Chief Operating Officer Noel Geoffroy said that the Hydro Flask brand continues to see consumer interest shifting from bottles to tumblers. The company soft launched a new travel tumbler in June, with Geoffroy noting “we are really encouraged by the early sales results.”
Meanwhile, the company’s beauty and wellness sector experienced lower sales of hair appliances and air purification and humidification devices, which was partially due to a shift in consumer spending patterns and lower retail partner orders. That decline was partially offset by prestige hair products and thermometry.
Helen of Troy’s latest earnings results follows news in April that Mininberg will retire from the chief executive officer role in February 2024, with Geoffroy transitioning into the CEO role on March 1.
As part of the company’s restructuring plan, dubbed Project Pegasus, it announced in January that it would cut its global workforce by about 10%. Most of the reductions were completed in March and the remaining are expected to be finalized by the end of fiscal year 2024.
“Pegasus remains on track and its structural changes are working across our Regional Market Organizations, Business Segments, and Shared Services,” Mininberg said in a statement. “I am very pleased with how well our organization is executing, not only on Pegasus, but also across the many other initiatives underway to drive results this fiscal year and over the long term.”
