01.08.24
Helen of Troy Limited – designer, developer and worldwide marketer of branded consumer home, outdoor, beauty, and wellness products – reported results for the three-month period ended Nov. 30, 2023.
In segment results in the third quarter fiscal 2024 compared to third quarter fiscal 2023, Beauty & Wellness net sales revenue decreased $16.0 million, or 4.9%, to $313.7 million, compared to $329.7 million. The decline was driven by a decrease from organic business of $18.1 million, or 5.5%, primarily due to a decline in sales of hair appliances. The decline was partially offset by growth in thermometry which drove higher international sales, an increase in sales of heaters and water filtration products, and an increase in sales of prestige hair care products.
Beauty & Wellness operating income was $57.4 million, or 18.3% of segment net sales revenue, compared to $46.3 million, or 14.1% of segment net sales revenue. The 420 basis point increase in segment operating margin was primarily due to an allocated portion of a gain on the sale of distribution and office facilities in El Paso, TX of $18.0 million; lower inbound and outbound freight costs; reduced inventory obsolescence expense; the favorable comparative impact of EPA compliance costs of $2.1 million in the prior year period; a decrease in restructuring charges of $2.1 million; the favorable impact of SKU rationalization efforts; decreased distribution expense; reduced share-based compensation expense; and lower salary and wage costs primarily as a result of Project Pegasus role reductions. These factors were partially offset by the unfavorable comparative impact of a gain from insurance recoveries of $9.7 million recognized in the prior year period; an increase in annual incentive compensation expense; higher marketing expense; the unfavorable comparative impact of duty refunds received in the prior year period; a charge of $1.4 million related to the bankruptcy of Rite Aid; unfavorable operating leverage; and a less favorable product mix. Adjusted operating income decreased 5.2% to $50.1 million, or 16.0% of segment net sales revenue, compared to $52.8 million, or 16.0% of segment net sales revenue.