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Nov 30, 2022
Helen of Troy Q3 2023 Earnings Report
Reports a decrease in consolidated net sales and core adjusted diluted EPS, but exceeded expectations through gross margin and cash flow improvements.
Key Takeaways
Helen of Troy reported a 10.6% decrease in consolidated net sales and a 26.1% decrease in core adjusted diluted EPS for Q3 2023. However, the company exceeded expectations due to significant improvements in gross margin and cash flow, as well as efforts to reduce inventory levels.
Consolidated net sales revenue decreased by 10.6% to $558.6 million.
Core business net sales decreased by 10.0%.
GAAP diluted EPS was $2.15, compared to $3.10 for the same period last year.
Non-GAAP core adjusted diluted EPS was $2.75, a decrease of 26.1% from fiscal 2022.
Helen of Troy
Helen of Troy
Forward Guidance
The company updated its fiscal 2023 outlook, expecting consolidated net sales revenue between $2.025 billion and $2.050 billion, and consolidated non-GAAP adjusted diluted EPS between $9.20 and $9.40.
Positive Outlook
- Home & Outdoor net sales growth of 2.5% to 3.5%, including net sales from Osprey of $180 million to $185 million.
- Severity of the cough/cold/flu season will be higher than pre-COVID historical averages.
- Estimated net favorable impact to net sales of approximately $10 million and adjusted diluted EPS of approximately $0.10 related to the EPA matter.
- Adjusted diluted EPS contribution from Osprey of approximately $0.35 to $0.40.
- Net sales from Curlsmith of $35 million to $40 million, adjusted diluted EPS contribution from Curlsmith of approximately $0.20 to $0.25.
Challenges Ahead
- Consolidated net sales revenue decline of 8.9% to 7.8%.
- Core business net sales decline of 7.5% to 6.4%.
- Health & Wellness net sales decline of 11% to 10%.
- Beauty Core business net sales decline of 18.5% to 17.5%.
- Estimated incremental after-tax inflationary cost pressures in the range of $50 million to $55 million, or approximately $2.10 to $2.25 of adjusted diluted EPS.