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Aug 31, 2023
Helen of Troy Q2 2024 Earnings Report
Helen of Troy's Q2 2024 performance saw a sales decline but improved gross profit margin and progress in restructuring initiatives.
Key Takeaways
Helen of Troy reported a 5.7% decrease in consolidated net sales revenue, but achieved a 420 basis points increase in gross profit margin. The company is maintaining its full year outlook and is on track with its Project Pegasus restructuring plan. An agreement was reached with Brian Grass to remain as CFO.
Consolidated net sales revenue decreased by 5.7% to $491.6 million.
Gross profit margin improved by 420 basis points to 46.7%.
GAAP diluted EPS was $1.14, compared to $1.28 in the prior year.
The company repurchased 381,200 shares of common stock for $50 million.
Helen of Troy
Helen of Troy
Forward Guidance
The Company continues to expect consolidated net sales revenue in the range of $1.965 billion to $2.015 billion. The Company expects GAAP diluted EPS of $6.36 to $7.03 and non-GAAP adjusted diluted EPS in the range of $8.50 to $9.00.
Positive Outlook
- Company continues to expect consolidated net sales revenue in the range of $1.965 billion to $2.015 billion.
- Company expects GAAP diluted EPS of $6.36 to $7.03.
- Company expects non-GAAP adjusted diluted EPS in the range of $8.50 to $9.00.
- Consolidated adjusted EBITDA of $338 million to $348 million, which implies growth of 3.2% to 6.3%.
- Free cash flow is expected to be $250 million to $270 million.
Challenges Ahead
- The Company's sales outlook reflects what it believes will be a continued slower economy and further pressure and uncertainty on consumer spending levels and patterns, especially for some discretionary categories.
- Company continues to see retailers align their inventory purchases to match their current expectations of consumer spending.
- Expects a decline in net sales of approximately 4% to 2% in the third quarter of fiscal 2024 reflecting the expectation of more cautious retail ordering patterns in the short term.
- Expects adjusted diluted EPS to be roughly flat in the third quarter reflecting the expectation of more cautious retail ordering patterns in the short term, a timing shift in the realization of some cost of goods sold savings still in inventory to the fourth quarter and an expected increase in growth investment in the third quarter.
- The likelihood, timing and potential impact of a significant or prolonged recession is unknown and cannot be reasonably estimated; therefore, they are not included in the Company’s outlook.