Helen of Troy Limited (HELE) 9 Jul 202021 Q1 Earnings call transcript

Greetings. Welcome to the Helen of Troy Limited First Quarter Fiscal 2021 Earnings Call. At this time, all participants today will be in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. the Corporate. to turn Vice Jancin, now of President will conference Jack over Senior I may you Sir, begin.

for earnings agenda operator. the company’s Mininberg, welcome the is brief Then comment Troy’s XXXX discussion CFO to quarter uncertainty you, as CEO, discuss ongoing Helen call. progresses. Thank Good begin statements. of first morning, will level follows. ‘XX I on financials trends. Grass, high COVID-XX year current of quarter and considerations the with Mr. this review results Brian detail forward-looking the reflect company’s the call for some everyone will will and conference business pandemic morning The a more fiscal from fiscal Julien and in Mr. as on the

we to words Generally, forward-looking are statements conference words call your to Following open similar words current events that respect identifying performance. expects future the or certain forward-looking are take the expectation call statements. contain this, anticipates, questions. will believes, with and may other management’s based on This financial

number maybe forward-looking are information. non-GAAP the risks conference to may financial not cautions company This actual a listeners information than materially cause of GAAP to financial are statements Forward-looking could results. and or uncertainties information from measures include an calculated information. also other alternative call undue considered anticipated results non-GAAP non-GAAP companies. subject that that differ The not on information These differently disclosed reliance maybe and statements to the place by non-GAAP financial to

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Good Jack. of excellent since closures. sales business wellness we quarter, for and strong when brands reach from sales thank consumers consumers brands, above at nicely kept X versus progressed us growth you Braun, for and expected. strong XXXX EPS well families growth our us. a degrees a we expectations. store and key and you, our lockdowns net able the Phase varying to world. Thank and moved both as of to growth focus more end Home’s sales services Hydro the has as of we in now year from played store of discussed. even roughly three XX% performed of portfolio than April total but showed benefits Helen role performed grew Channel quarter, at This trends tremendous morning, important declined company of fourfold sales Hot all Flask transformation, reported Tools leadership adjusted our consumers morning, by to diversified & the of particularly despite from brands: XX.X% closures, as everyone, grew sales XX%, XX.X% better most. outweighed quarter capability, very segments fiscal an a salon with brands challenges we home amid All development quickly Vicks, mix The as positive In highly ago. as there XX% we for the shared leadership consolidated led the of well from health in a X adapted accelerated trends joining unfavorable this also online Many ‘XX. Collectively, to and and our the Phase double-digit for and of committed Health COVID-XX be organization highly are Online more in quarter been XX.X% needed of These they quarter, Honeywell. highlighted grew much capability and very clicks. further the at bricks online products. sales representing related Troy’s our growing the strategic PUR to around X of trusted benefited time OXO home. demand grew spent we

improved stores driven & the business those segments better and brick also than in quarter, strength Home standout total as a the was across at and in in reduction Margin, cost sales And growing current be trends flow We seeing sales, encouraging remained sales, the those brick have were some open. Analyzing better highly mix stores mortar result all performed higher faster expected are leverage, that cash a by open. in Health and environment, performance International than all remained online of EMEA. quarter operating that and profitability mortar favorable strong. to continue company efforts. and temporary we

nature discretionary multiple and mortar dependent some on revised. and softness, COVID-XX in in in more the continue regions, see retail brick products are to recent channel reopening being cases trends plans are are even but are more or rising Our now or economic improving. that cases questioned,

in people Those or way built reduce we shared protecting ‘XX two taken our capabilities and major on doing this still and are with impact And as other categories: the we When actions interventions that last on fell transformation. very spoke result, cost so will fiscal fluid providing fiscal and a in our pleased April, the our quarter focused be costs, consumers we into to the at personnel supply during guidance our we cost While net reductions time. spending. first in a and ‘XX of protect results, pandemic not delays our is uncertain. reductions

treating we minimal have are on business our people quickly turn been preserving and can reductions dimming them light that infrastructure we as the with switches turning By systems, and like off. or conditions We disruption of underlying back warrant.

hiring on are our light value now and and switches believe to planning the to flywheel. quarter our strong the back lean of in of key for strategic many we driving the selectively capability, the further of IT encouraged the of strength generally therefore certain in our investments our to consumer creation prospects on our to by significant our our and product already These include are initiatives we for positions, China in We are current trends increasing further diversification rapidly use on certain key marketing turn consumer critical expansion supply business first and expanding innovation growing supply chain, base, focus plans direct centric and expansion capabilities.

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can events Recent more a and Another much tragic company DE&I. area inclusion nation or a as as equity we diversity, are have and better. do is focusing that we on demonstrated we

During on best of to under the and consistent new This strategic DE&I to intensify ensure attract, at Helen train thoughtful quarter, Troy. retain, formalize is had multiyear we improvement highly internally, leading designed a our unify conversations program the further to us people. with very our stated and goal efforts

and inclusion strength documents that We have explicitly as we plan, strategic and emphasize that embrace such effectiveness. to key our source that corporate a is added now of multiplies culture foundational and diversity identity one to our diversity

DE&I also our we on development to women. ESG to dedicated for minorities elements are the connecting DE&I increase the our and includes adding Given parts governance focus and and of leaders social recruitment, The both. our of and retention program ESG, that efforts linkage program

a fullest potential. their We attract top from background ensure talent and to everyone every retain where environment can grow are work and looking to and contribute thrive, engage,

We listening associates the sessions around are conducting our company with all on matter. this

and paid training talented trust employees organizations students who primarily external believe in our our We shareholders brands Troy planning consumers who supporting focused are good bias quality to initiatives what trust the business, for their believe out their who we and and and we donations and live associates, unconscious including off black of choice worldwide seek Helen all which are these work. matching among assets, We on time as of we worldwide rolling contributions; to with company and are in of are communities later customers the stand out employer for, of mandatory to the support charitable volunteerism us education stakeholders, proud minority donations our improve this are summer; who opportunity. and more and us

would competitive point the the environment. data like are trends, day insight to do. managing health I share consumer are activity, of in the to and all onto thing how and us, developments. remain initiatives to we these stocks, of close COVID-XX we right to Externally, customers very to believe are simply of day now using including available sale also geopolitical out We the some sources

relaxed to about at feel As are most all of the world we stay back into expire, allowed home how their stores. or closely watching people coming orders has

seeing brands trends our already While beyond still PUR, demand for Vicks, strong Honeywell are OXO. early, and for Braun, the we some leadership encouraging

impacted reopen, all we consumer to demand Drybar, and behavior which in as as closures, by adjust stores new increases in tempered normals. been Flask, we For have Tools Hot salons Hydro adversely store are part seeing and by

of distribution in ensure chain above key which able help We to further working our direct consumer are some call meet frontline centers going our the supply duty closure us to and store has growing to and increased supply our is have helped also associates of mitigate capacity Internally, demand. the for the brands impact. beyond greatly

critical not only to and distribution during to associates workers support serving our this essential and to centers; dedication appreciation recognize are bonuses difficult called to our customers paying added our back time. in have have growth, We we workers their as staff

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We continue least until office working September, best and from depending at environments return expect government travel. regarding to guidelines so how practices do to unfold our home to those to and

in demand demonstrated the color. the In we sales and PUR development. category Health review & most have for driving thermometers Multiple capacity an important resiliency. is term, purifiers seeing Individually, We turn related education covers. believe segments. diversified and growth health health has Home is are responding they to and elevated and off the probe has our brand for generations quarter. our demand are Braun, demand media elevating about which a positive our but COVID-XX and purifiers, outstrip ahead warrant of importance air well bit fiscal year, significantly products is to that greatly Now the the to water supply. to of that related margins. in business increased Honeywell thermometers, to start a dynamics Together, portfolio for Braun consumers and powerfully excellent production focus. receiving our I’d a continues the elevated purchases consumers humidifiers, years each and performed short Vicks, of drivers pandemic significant with it’s they driving long-term and quarter, more like in of global implications unique products outstanding an over with constitute

into no-touch We and come in of human into offerings to expect product the and resources capacity are we investing increases year. fiscal additional online further later capital expansion the

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at held a appliances the positive our despite quarter only were spot and volumizers way of a accelerated consumers Sales Leadership also our sales key including and begin Sephora stores brick-and-mortar variants the new quarter geographies. key our online in like at showing get bright share and shop the share recent which X.X% recently, Amazon on continued its popular Brand, Beauty Those More position this in trends forward share given improved Drybar segment incremental both Looking of and closures. organic on the appliance customers favor one and United returning in number locations newest comfortable acquisition. key decline the reopened at all products and all to with gaining of have of beauty during the consumers have historical its range on Beauty growing trends Amazon. to trends as to just our highly brands, States other products in and sales, Drybar, the major that continued share as March and Nordstrom. to and on customers. sales brands DTC our market as supply in a were store quarter, adding its own, across Ulta, building outpaced innovations are

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back have we more news. report when will We

prior in X% the in the segment, of demonstrated category resilient activities outdoor quarter XX.X% is Housewares our same bottle last and beverage products that period essential with the portfolio to sales sharp once the sales sufficient essential closures. the International increases for syndicated the insulated one below store and market in brand overcome according the share search Hydro product over hydration year continues store many at not highly much to Turning diversified our sales unavailable even retail sales growing Amazon Retail explosive. decline the deemed of trends year, and research, closures, after Flask Europe the not those quarter. in OXO as nearly growth were were position expanded The was popularity online focus Amazon hydroflask.com the baking, growth big coffee, positive brick its stores, serves, late double-digits sustain coupled versus that storage cleaning. remains consumers grew containers shipment online ago, was Hydro beyond very a results largely with triple-digit Point vessels quarter OXO and for and led progressed to social and listening categories made competitors at growth strong year items. sale were trends as mortar online, sales in to data. those quarter of Hydro in by open. Flask brand offerings a Asia. especially customer Flask difference were area in confirm retailer strong. retailers improved quarterly Consumer of also number all for

that reopened recent tracking shipments ahead, have in and encouraging in trends. stores retail locations showing Looking are

outlined We Hydro the drivers optimistic Flask call. key in continue our April feel to about we’ve for

how entire levels nearly thank our you at your perform am support, during for our your and your I our Before pleased and continued has your for the to with to unprecedented trust I Brian, disruptions over for business to again organization time. the loyalty despite want I of this highest turn call to every for encouragement, lives. aspect

new in Troy, fiscal we one opportunity is of to adapt, a year. now certainly how to Helen the For see It win lost learn many not are emerging. is an ‘XX that to normals as

of fiscal ‘XX announcing an With investments out resumption planned the opportunity and stronger. we are to previously the today, results come is

value commitment increasing unwavering. shareholder Our to is

believe transformation times our Troy good times. now, in a in perform driving Helen We continue to also like ahead. past crises and allowed have excited we that to capabilities of competitive set tough created of are have advantages and We in

our organization We on results multiyear are capabilities build deliver can focused we outcomes. and relentlessly to brands further lead high-performance and elevating as that superior shareholder

diligently our opportunities to we best are capital With Brian. also to creation a now focused the I sheet, turn call We that, toward on deploy balance the strong maintaining financial resources flywheel. fuel ensure over value to the to will have

that and joining Thank you everyone for safe are us. hope thank you, Julien. you I morning, Good and healthy. all

Our to are the appreciation be efforts with We first of associates pandemic on the as directly people workers front essential want the who aren’t workers, who’ve responders, and healthcare to medical been affected own to the from thoughts and COVID-XX able work that as our their continue the lines. for our by home. providers well efforts extend for

and and been recently, our unprecedented Our violence the customers More underscored partners in well-being of time. be acts to inequity priority have the country. racial this continues associates, has that of our exists during business

ago embarked we further mentioned, and Julien six across to greater put our on changes equality years diversity the promote and cultural we emphasis greater inclusivity to first are As advancing company. upon

an also these how not and difficult the could supporting are organizations and be We in across in world. have times. our believe is company of impact prouder that we it can the I responding communities

with first turning conditions. for despite quarter, results unprecedented better Now we operating year results the the began under to expected our than

combined fueling EPS well, strategies quarter, XX%. growth and during of Our international margin accelerate expansion expense of we took excellence reduction omnichannel diversified This, Brands, maximize almost growth healthy adjusted diluted our in the and temporary our portfolio double-digit drive the Leadership resulted sales strength us the with measures to growth. served and

use We free in on will in facility. if help in $XXX available inventory remain million build supply cash $X.X healthier our with put can million quarter the and on to disruptions, we in also credit fiscal that generated cash in satisfy cash and steadfast we’ve look liquidity, further COVID-XX discipline, mitigate including recently levels ending we We to surges the demand focus equivalents, of billion seen billion million $XX.X flow $X.XX as quarter any. our better that the $XX

outlook our to As deferred we due release, fiscal uncertainty continued noted earnings today’s COVID-XX in related business consumer providing pandemic. to XXXX have we for and the

return our practice an visibility providing once to expect of historical to We outlook improves.

Now a XX.X% net XX.X% sales retail an business review in moving impact prior the Home on of to quarter, consolidated was more grew increase a detailed segment. increase organic in more Organic Health COVID-XX closures store of the This mitigated the XX.X%, by driven strength million, our over business net $XXX.X sales revenue than and year. online year-over-year constraints Beauty from quarter, sales percentage organic in which XX% segments. grew supply XX.X% Consolidated grew Leadership Drybar. comprise the of consolidated our includes the sales channel limited points growth which Housewares business Brands first our X.X of in approximately from & our approximately Sales sales net quarter. in and net the XX% to in

Drybar and customer restrictions. essential sales by well Leadership item limited were Drybar contributed first key salon to closures store its While quarter as growth, consolidated and Brand significantly as

as Bath off of prior year year DICK’s key restrictions a Sporting Bed, such well essential Our of as on only item Amazon despite same closures store others, and Housewares retailers segment REI, & at Beyond, part last the among grew base as that declined Goods in quarter. XX% large for the a period X%

its spent meet to to brand demand the the saw as pantry-loading cooking, channel Hydro by sports customer and products Julien home looked time innovation closures needs. cleaning, trusted within is Flask Flask segment impacted deemed Hydro the adversely more baking, and consumers organizing the their outdoor was and store robust retail mentioned, OXO was weight and base more nonessential our As as at significant. for and

due drug impact Health of The and enough unfavorable total, operating factors income due period strong unfavorable higher to segment, the the and healthcare of and direct reduction XX.X% impact consolidated net of percentage the The XX.X% net closures decreased percentage actions, the to temporary Flask personnel, response new net less Beauty to year. strong experienced of healthy by support operating increased as and the reductions sales was higher remained primarily expense, incentive strong factors and fluctuations within Products and product primarily points was same primarily unfavorable of exchange, and was X.X air Home the higher Health foreign of year. net operating within $XX.X point mix, higher or the margin million in in of impacted introductions sales improved Depot freight higher expense online increased air higher the percentage adjusted for to closures Drybar direct products favorable and or compared leverage impact and customer primarily X.X%. and generally import Beauty factors improved point net result COVID-XX. an Housewares channel, favorable declined offset sales a unfavorable higher Consolidated impact the were million the operating and Beauty drove store acquisition, decline business actions, X.X Amazon. royalty including consumer strong impact liability $X.X debt offset cost to sales to margin business outbound mix Home foreign acquisition. approximately expense the the was the of Housewares factors basis, channel taken and impact related Housewares Housewares that revenue expense, mix, were Home COVID-XX. operating due initiatives Drybar due mix, and consolidated sales, & by sales COVID-XX. an compared currency expense reflecting unfavorable unfavorably $XX to partially the to a net long-term XX.X%. net of compared increased of less & higher sales SG&A retailers cost the net chargeback product Target, organic growth the segment reduction Products was the expense favorable & offset to Hydro the favorable and mortar compared sales expense, of mix due an adjusted million the the cost Organic increased performance-based net of living compensation. expanded US expense, unfavorable COVID-XX Walmart, operating segment period and percentage primarily currency COVID-XX. reduction foreign organic customer to a These partially sales. to foreign uncertainty by lower by in increase These and GAAP to Segment & distribution more e-commerce travel X.X last the of within Health and or Home XX.X%. favorable mix of traffic. Amazon, freight XX.X% X.X%, points The percentage on personnel margin in adjusted business, is driven On product X%, as These leverage. the XX.X% net offset and and currency activity, product favorable The constraint care, freight. to channel personal store product freight increased in primarily foreign of brick demand and brick Health in restrictions also mix from point to fluctuations Drybar impact reflecting sales impact primarily previously currency lower bad Housewares expense, primarily of leverage by as increase on a support & pricing currency offset last unfavorable mortar and These within percentage increase to expense opened primarily within of a XX.X% more impact within to liability to the Health unfavorable product related While a bad X.X cost product X.X segment were XX.X%, X%, shipments. such consumer it freight response consumer mix the product segments, product of in from margin XX.X%, gross the was pronounced higher lower to operating operating due Beauty primarily profit reduction distribution impact were Consolidated the same favorable sales nonessential XX% advertising closure higher points impact debt freight impact not product were higher expense. on customers, and mix and key key sales reflects item supply a Home the global partially Home to impact higher by growth of key the had the impact tariff fluctuations, more to XX.X%, segment, mentioned. initiatives the retail related demand initiatives. X temporary adjusted expense the of margin acquisition a margin the favorable to higher channel partially of

expense year. compared the was on of last income pre-tax same of XX% to as taxes, tax percentage period to income tax Moving a benefit X.X% income for

a law the the during Act CARES language effectively date first things, CARES corrections signed into to XXXX technical the in As Act the quarter. benefit in December income had the quarter driver loss the Act for GAAP the on tax $X.X tax first of carry-backs, included primary the CARES other reversed our quarter. consolidated Tax resulting This in Act loss net was to related Among benefit Act benefit of impact you XXXX. fiscal that know, effective carry-backs. was of Tax the operating The net the million the operating

million $XX.X to outstanding. income share per measures. shares or million to diluted $XX.X million diluted share. EPS $XX.X diluted of on per those per or million as determination it $X.XX adjusted XX.X% grew Non-GAAP was XX.X adjusted $X.XX had XX.X or $X.XX the $XX.X non-GAAP impact diluted per share in no million on compared outstanding shares share subtracted compared adjusted prior $X.XX income in However, the or it on income was out Net to diluted year or million

financial days days was position for fiscal first ‘XX turnover the Accounts compared our same fiscal to Now moving to to last quarter ‘XX. XX.X quarter the receivable of compared the year. XX.X on period of first for

accounts Inventory Our million compared due of $XXX.X $XX.X to ending operating to increased XXXX payable $XXX.X net activities and increased liquidity million accounts debt our was and inventory to strong Net million times combination May the sales to period for free levels, $XX.X compared $XXX.X growth, million receivable was Due was improved million. Inventory X.X $XXX.X since strong pandemic generated and million. turnover cash measures cash reduction was The XX, primarily Total has began. million. $XXX.X the XXXX. higher both increase cost short from our was cash income, the cash and to first flow provided compared less and lower long-term quarter net by $XXX.X we million growth, inventory. ‘XX. the fiscal balance to temporary trailing for of for XX-month used

more the We million. year. positions time of January, As the leverage of our at our million cash at our and our did last in end equivalents and million at times was and environment. we us a last liquidity well the as credit less $XXX the time of the end to of debt had flow availability summary, acquisition leverage quarter, amount X.X our compared year. the we million $XX believe ratio, than cash In at uncertainty facility, funding navigate had under We times first cash even more $XX.X XX of similar debt, Drybar cash, X.X to balance after was same $XXX liquidity of same defined of May and the in agreements, our

not a seen to are we provide on is update, by COVID-XX and we generally business visibility far. in there other uncertainties, what spike encouraged feel enough the do but infections outlook, recent to an new Now given so we’ve

of While expect Hydro defensive some the today, evolves Health the brick the as that mix a provide believe a has segments. along have growth variety of daily, outdoors. segment, some there scenarios. by successful strong businesses we and reopening be been of we and segment environment. and fluidity in we help can mortar on surge of a steadily online and of consumers channel has believe since the the into has to trends the what beginning in diversified portfolio we second see can strength and our We Based in continued in balance more pandemic improving dynamic solid Home almost moderation now us growth, demand time quarter difficult spending through quarter OXO’s sales the & Houseware Beauty May with first Flask gradual the improved and discretionary

been promote While distancing the beneficiary first such to be of sales forward, Hydro declined supply and in going were which activities toward it that first sales as we hiking, outdoor brand largely respect biking camping, by Beauty, total constraints With resolved. the quarter, have preference running. increasing social Flask could limited quarter believe

expect be rising long of infection plans. ongoing as further trends re-openings sales by rates store to Beauty do as not We helped further gradual reopening alter

of recovery timing expect pace predict. the be We is to full as to term Drybar dependence discretionary and the short high industry’s brick is mortar and the the most prestige on the business spending the salon and and difficult in challenged

As retail the have key how terms including unemployment. visibility uncertainty fiscal store second number expect, in a behavior at pandemic re-openings, and consumer orders, less would year, remains home COVID-XX of you and of into stay the and of factors, confidence will we half external the impact

operational continue we gives reduction our expectations As quarter But believe opportunity take such, certain approach reverse taken in cautious us performance first our we spending. to April. actions to cost the to sales a and our

Director X, discussed, to to compensation plan of effective pre-COVID reinstate Julien Board As August levels. we and associate

plan to replacement positions. selectively begin We also new associate high and priority filling

slowly key critical initiatives to brand Finally, in goals. delivering two that we plan and normalized phase are our selectively invest more spending resume transformation to

portfolio, operating organization half. two and to our of are not personnel than the team I level crisis. key their number steps scalable investment, compression of would and passion In in normalized platform and our during diversification spending product and expected, first safeguard a the our that operating and brands our to that which summary, were year, particularly commitment. quarter people, for expect be of our this commend results our quarter we second like took better reflect does further of first brand our there over reflects the level a phase some the initiatives will margin the As there we of balance require

at transformation extraordinary and we stay phase two that, under Troy I’d circumstances, change. of developed for of back times Helen and plan Our turn associates the have advance questions. work the of to the it diligently demonstrating seamlessly positive and nimble With to unusual culture in power challenge like to the to operator

Securities. proceed your from line with of Please And Instructions] with [Operator question. comes Bob question the first our CJS Labick

start in congratulations and a on quite difficult terrific a environment. morning a Good

morning, Good you. Thank Bob.

Great.

us maybe Home, bit make wanted and about segment gave appreciated color, on & the the of little it’s of but of over innovations some you talk or some and longer a maybe the more Health start growth more right I leadership specifically to So could a the about driving you some sustainable to you little trends and from this within term? medium now a brands the of

Julien here. hi, and at Bob, is Thanks, great. Helen big deal a Innovation of Yes, Troy.

pretty focus brand part there That lifeblood today. fiscal traditional leadership any that of eight earlier bottle In announcements that across years it proven is on. a the And Health the are we We innovations Health products key & development, variants brand the and areas; is year and it already is we’ve working comes not have three our some irons all in and are of slew pipeline and There of business have strength going heavily it and a the can very been brands. and its making we light additional other investing additional no categories Home, acquisition it on for products going pipeline in of One Flask beyond our history. of in business even switch units full new Home, ‘XX all in this to the is got & to Beauty, are it and over funds, and that’s there. work the OXO we as a other its further our three people. leaning organization beyond and next There units – It’s that work is that volumizers. rich curling XX-year important one There from been When is strong funds franchise also given expand with getting despite things is volumizer and across of under we straightening, focus the franchise Beauty, have specifically in pipeline, big goes new speed. a just XX original so exception. tools for to to When many brand innovation years. fiscal and significant expands now the portfolio us. that that us beyond other the in now to now launching also is for some pipeline. globalizing. which the the beyond the Drybar there prestige there. It liquids, with comes in there some and that we or attention year Hydro is also That on And has is getting the other specialty bringing is transformation COVID-XX Drybar. it two to continues with market invest the global a

Troy to on going growing on big have to in lots and all Helen side investment big international giving strategy, innovation. uniquely prestige there keep I a who consumer stylists on in And sure to Drybar. have to thing the that are key some frontline make We the we are have as people product so to aspirations differences down correct through the us and those the we that are is what’s are lines what regions, multi-regional right overtime appeal work mean, very has X,XXX big one for the and the market pipeline international feedback double on for time want. where salons significant the have the those into we and deal, tuned chosen next of of last ways

And in by curiosity initiative, may of relates personal and and much Flask, and stand see just may it excitement, Great. you Hydro pandemic, that been Very far When a that? have you and wondering the on increase out from even, know Flask? appreciated. have customization Hydro how was I we impacted one, to kind I so of customization where as

Yes.

where So, us bit frankly a this I a we is key think are and area for one behind.

have does it We up during COVID. this definitely go slower amped and

all market-facing COVID. focused front-line that are very and Our the of people go with challenges on

that on direct product fire the think like meeting surges surges, door, way. out Just online getting kind the of of big demand, in in consumer big, and to

was customization. less there So

and this on spending amping now are it. we Now, more are up even

Flask. by those say I or going Flask. and you’re strategic times could more It’s more and to Hydro you wish it is But tell date I eight of of nine for growth several now, coming, customization to capability Y. a cited So get for major suffice that drivers, one it’s long-term factors big that of as is we’ve there Hydro it focus X,

Got it, great.

me, from I one promise. Last Okay.

and the the more more an and M&A M&A, general and tremendous I the cash able things, relates are stands balance mentioned pandemic, is You flow that you it where offensive environment look and as could was sale to to of in etcetera? your update talk at about ongoing, on wondering COVID given Personal Care and sheet if potential now, right you

Hey, Bob, it’s Brian.

on. start I and add can to maybe if want Julien then think Jack I or

at potential evaluate of a it’s or level type what is and them it’s I harder limited environment because potential opportunities done, the think I have to uncertain it of opportunities so and uncertainty that in think thing already. made least acquisitions

attractive out difficult that couple you But that asset. this, attractive less about in And like saying you on pool with having comfortable there looking that, and And it of are layer a are now. think excited right of terms an so environment think it an a there to are makes acquisitions. there at are get I we assets I is

and So assets some that in encouraging we to still that’s deal. towards get such potentially our attractive hands an me, on uncertain a environment, can work

want Jack, It’s some at all environment, and limited. you add? really to in due least this I to that. do the things go targets But together, visit to attractive that by really assets hard kicking around if encouraged moment. I weigh been am at I that’s I like So it am diligence we’re had would overall, that encouraged say, we and have

I to have sure am really add. not much I

characterized think right. I it Brian

go still now, could right looking that are understand criteria year. Our different we to over do evaluate it. and a diligence. couple come attractive about we’re next assets be remains, out the there have But are there find at to and of We disciplined that and more ways

a do see It’s will wait just are couple do to those. look the more things. But a to we we type pursuing to transaction. in for to chance of need a diligence if we attractive and we’ll get have order we of they say after So actively consummate –

that, new of my Yes. there COVID second out. is one of shakes strategic to a could pandemic One it me early assets comment is and interesting with alternatives some demonstrated interesting to player today, them how for view. that before firepower. expose that that Two considered industry, not for very strong as just enough us the but in be likely have a out, subject probably firepower. for set it see all we may on it the a turns as It’s And they plays attractive from the little the as to from build is prospects be quick out, can some of

when lot in we revolver in our that target the quarter, know you about diligence the a the ready. when when cash year, and can You right saw and us generated act the it we our is down, earlier do calendar new to of coming we’re announced debt a firepower gives

you and congratulations, again, fantastic quarter. Alright, much a terrific. on very Thank

Bob. Thanks

Thanks Bob.

the line questions. The proceed next Rupesh is from of your question Please Oppenheimer. with Parikh with

for question. Also a taking morning. great Good Thanks on my congrats quarter.

Thank you.

guys had perspective start chain I think thermometers curious am I supply know So last on now supply maybe with volumizer you just a challenges from the quarter supply where right with I the key guess in chain are I first you chain. and categories. product. also the will I some

last through and and and into may coming still in are this a areas, start have of builds. we There QX. had me Supply year building thermometers us let some Brian where some big for including been back. QX Yes, are Housewares challenge some

can caught we as just up we ton demand it more a and comes meet lot we’ve in. but that demonstrated a So,

And would an and that forward are definitely news and a good make the very In of on cold is as opportunity capacity the that big. to later capacity, not meet go that to category. sell in try could mentioned There season, all in the we increased case more. the us me demand And That it in let are category make enough through to by new demand come we are now we thermometers, volumizers, we we we more timing. said, if capacity, So short more, online flu remarks, we in facing. good able during will it’s prepared them quarter, do thermometers. the going upcoming with did is additional and up. year. The and in and adding timing gives the sell to catch We

significantly said much make it quarter. added have that we so In saw remarks. we more happened, closely. could in and all that we and supply during the are shipping our demand And that shipped then April, the to We we you

of stores of beyond our out the of remained OXO, sales a also to and result because that, And the helped. especially saw Housewares, of home that that online to from stocks. also and some grow and share significant we trend are comes when led surge stocks as open and out the nesting it the demand had some that facing surge, We

you look at will that we If one, be okay.

the of of kind out between. period on. say that some but triple supply I is are more be there would a whammy We in bringing there now, going will thing stocks in is last the And for

as simply inventory. Year is that than the China So we in more of from you in down we result COVID-XX China QX, in In these QX, based Chinese shutdown right you in whammy was China our around the were triple we saw while. situation. an suppliers amount a might stopped all had remember, that expected products, for we and and sales are New this sold for The a think why supply

in of the simply the had more and time we where and there supply. we COVID Then were third less were discussed, demand less we depleted categories that replenishment. where then part just was So whammy the the faced at

little views why you some that’s have may bit and the Brian, forward. the about side? stand a crunch supply on So, we where looking

No.

XX% kind is we that have put that Julien But And Chinese all of close Just don’t grew in. not top of the And perfectly. supply supply and quarter. to We some mentioned, coming have we’ve of it been – do on we other. double digits in said, as as would coming Julien then, plan have around something you fourth numbers to together, and in. the quarter. like grown right difficult And then each also Year in first put COVID for New that is

which is have. are chasing just to good We demand, problem a the

reopened you retail provided interpretation That’s fair great. going But stores in stores? at color. is maybe this reopened these that Okay, you guys you as are are these in know at that a store you to just you more re-openings, I volatility at infections color guys my and And seeing different look that trends. are not these pre-coronavirus results terms look are back point of what recently to helpful seeing. customers And spikes of in in then back have correct markets, amount

category. and real in great and soon Yes, time. what’s gives sense happening a little question by by a ton to is to because region it as depends you It too chain, a is say, a it it by

here. but depend. soon So too answer, help such and color is I’m may sorry does loose it it little for A a

to demand. back store and they now have I people if stores, As so the bought they to buy went think already to online. some pent-up just done they they and could them was hadn’t there go wanted

is in little helped behavior there. rough a Consumer that in So the stores.

of people wear them or stores without rough didn’t with didn’t about to lots the they a seen the that and masks, reports being stores It’s about want uncomfortable mask. little asked were where in have too make to want masks, there probably You feel to wear messy the environment.

I since are concept truth out public, fairly that. need becoming gotten national sorted. a of, a is well doing you And if simply in think are you this that’s and mask people

self case, it that the so regard. So reinforcement say more Good is their shopping people a just so too their show to store, and soon behavior you other to is comfortable and And easiest way know, too, in in also stores up people know I also on is also but And more there comfortable, traffic, state-by-state, again are ordering. news in can’t see frontline that they’re closing themselves that. jobs. that therefore they of the there for week that that’s feel people much workers store region-by-region, in I Probably the in to some and and the so terms one. are or think that shipping of stores it, the every and little do venture is say bit

And re-closings. some couple Brian’s the just that There got chatter months some will of I be be some gets as and lot so, sorted. next openings a for there’ll build. of mean,

has our been the most if from or reopened to, I build. just a mean going this forward a I positive be general slow to takeaway, headline Yes, you stores think because, think going I are really want in net to point, what’s of businesses

think a and wanted of expand I consumers have So we’ve seen and and don’t grow safely the They feel and yet, make that taken our of to have lot here reopen slow. from – from benefit majority retailers should safe. it

With area North seen that and I that’s think Tennessee in to all and Arizona, Texas, were have closing out there terms Arkansas, California that respect Carolina, I so, XX have South Carolina Sephora the only. of reversing outbreaks, we stores re-closed what continue to reclosing of we recent in to going build. again, stuff in is And of seen mean Houston and

isolated. that’s pretty So

city going And you & only but And a DICK’s stated some Bath were & report Health just low closing in – from at perspective low may all. We’ve the to there. about they to has really for stores is performing Beyond, may stores, Sporting For related. safety is Home, partially today filed no analyzed for top Chapter then state which is we Housewares, the current that stores COVID related, believe performing that on that based closures point-of-sale have XXX sort seen requirements going on – COVID would stores, and don’t And have store close our forward. much Goods already we and and Bed, probably that. from not then but thing. feel seen XX, not of also they you good impact they’re those very so

give and know we of but the future, that we spike will we point, didn’t closures extent an what at in that do of outlook. about is that so this we And are why like that’s the probably which the cautious feel infections can about one the in reasons

for Okay, thoughts. great. Thanks your

That’s to, even what it’s choppy for while. if comes just down really a it

Okay, great. Thank you.

from line the Please proceed Tong is question America. next of of with Olivia with Bank your The question.

Right. Good morning. Thank you.

Hi.

you Why quite are little obviously don’t many talk of expected I across than a bit because, the sales those numbers board. first, bit a about stronger think us

does did So rise, then you’re think for did a necessarily not what wanted opened, to that but OXO continue divide And virus because versus like forward, what what quarter? does your continue in obviously quarter? Hydro what seeing to Flask? this get Thanks. is obviously to assuming Hydro – well it what Flask going are OXO retail sense across in between that Housewares? margins expectations and this major cases What the as a in for did of mean viruses you but divisions big you outperform, Housewares very saw as Does

QX, nevertheless point therefore margin said margin is held consolidated and & they and But margin to counteract also affect both Olivia. was and it Housewares mix operating within up Flask gross enough compared Yes. on up basis. does more surprisingly your during mix, question, and and and expected than margin hi, It on Hydro big the what well in about that we also to Health went was down, and the basis. great Home a to a the

Hydro diversified I within Housewares, and make indoor OXO more possible, standpoint, as positive outdoor indoor of Hydro we people Flask are your just and as think indoors, a and to now from reopening, case stuff, who less a even stuff. for good is less simple more Flask people stores it diversified outdoors, the so So portfolio to of In net the and are it sold outdoor with question.

the were his at in forward, like happened Flask reopening brands, end above your Hydro margin of one lot. places are beautifully, a essential stores which in some seen And at and mix going online. far Hydro of our have Amazon, we like in we much in the that but the is responded to Hydro has mostly only Brian a what rebound Once like we remarks, Flask status trend significant minute the happened. so Flask, margin the prepared QX. mentioned not point, terms fleet that very above we quite average, QX And of start opening Housewares best like average. but As

more. average within be remarks, there for guy So a his terms Flask as more the good margin Housewares, of Housewares lot hike hemisphere OXO company. all stores is Hydro outside for the with time, trend summer of and this as bike going is on. adventurism. And people does idea good One a going There mix of in a the will at within a solitary There the of in the of therefore activity just balancing the regardless on what expectations of of mentioned activities, fleet is a more couple and of northern margin bit and are of trends in is Brian that. and

their people others. of on preferring want away who out bit a go to think stay So to – are out, more from wanting go to

on soles stores own their Brian good hike sales. people are like good take that are this for mentioned good Hydro opened and are all And at for those bike they things and things so for Flask, they or might camping, the

that to some expect you investments, little for Thanks. etcetera., benefit you fiscal since going going you just especially reinstatement decelerate higher margin, on are one-off it. forward? saying year have margins that more you QX Or operating Maybe being some that clarification because helpful. result the in spending? tariff progresses just bit year, of of a of will down is as the that expansion Got last reinstatement because, assume the spending, It’s operating

Let me ask Brian.

Yes.

halfway almost second We through quarter. are the

lot talked in the be quarter. the of back have things to And of only the are so going half a reinstating about we

year we half second what of are would we in fairly and expect I seeing. investment on that’s compression the potentially that margins the make, quarter to that’s say on depend going back are Where what up really margin we depend in the So to hold and well is – choices some year-over-year. going expecting we to really revenue

signs the we going of, I market direction – have the respect revenue expecting right terms on better better to the this So think what picture as there’s things a will revenue into tell no choices out have we lot at make in for of revenue, with the to we going based to and were going the make All affect which and we’ll because revenue. what of be a and getting moving going are parts be and we between it’s and equation the but consumer have we in to margin, you better moment margin, the hard until went. are then know have proven we is choice to don’t exact expectations the been the

is which see of trying better. And a more ahead and each and and offense, do time revenue are we how and to then revenue can we so then out clarity gets to we what investments making have little it play gets are continue we hopefully plays can bit we better it,

I on the perfect going the in it’s know I I a margins the to expect of year. was year-over-year pressure expect not but half if answer, So would anything second

it. helpful. last That’s Got Two ones.

Health about difficult wave in for in have & around cases and just you acquisition these a earlier from comments What capacity Home, and obviously just capacity your preparing are of how M&A you environment First numbers talked And Beauty, substantial well? as increased have preparation on in have of flu all increased you conversations you fall-winter you retailers you already increase in expected a with that more regular what and already? made the it’s we some and how had other things diligence terms purchasing? put can for perspective. do assuming do cold some And to the then about due much

to going talk for from of, you are care lens the those it personal the as you how conversations can business That’s well? just trying me. Thanks. guys So divest that and about

Sure.

Let’s because, start people just mind I one, divestiture. second with for on number of it’s a the of the think top

We not process where are is in point – is the potential from are the advisor there in diligence there deep inbound, a been hired. yet is There material, buyers. outreach, is for not we there that’s ready it’s

doing things. prepared all ongoing, done. the We that in remarks as right marketing process our said are is We been the the

the on do at it’s that through stage and roadblock. COVID plays not be an buyers a and over more necessarily acquisition to there not will are as the virtual side, we all potential only So but point, and as work. There sure, that, where assumption that do that people for into process run time easy, our travel unfolds not have to yet, us your we for is their

the too good, to know I And slow that build will down any don’t go so to so supply. think Brian, say that if and as early I but prospects, I or so can not. divestiture on the us make the yet it’s we can also I think declarations. far a

not are connections have in respect we a to zero Yes. the have less we you Olivia, defensive to be with respect with an have solid have are the in. product before. have particular been of are some before set mean, think starting that more about fairly asset, from it impact through through lines limitation, that because of buyers. the that I so and you the ground well are process before and have to think been this potential whole are have the diligence already as It’s talking environment this the roadblock like we them and good in may with up and of we we – with asset. asset diligence selling, that And I line that interest we know, so up And, that it environment I we and we serves well process had

need there’s and interested are who much as familiarity it less buyers with to diligence. of set a due do have We in

go Now, that of people get complete group announced process. comfortable, not through just but people to course, will to that we the it’s broad have new have of

Good, season. – and upholding question a cold the then coming in It’s little Got thermometers flu specifically you. and and supply complicated. your Olivia, on around

at try side. I can. So demand supply I’ll the mean, then the and let’s as simplify easy as look I side, to

side, ear in Allyn. Stuff millions dollar both especially then with units thermometers are China, our you In professional the are supply I buckets. thermometer that’s and stuff in for is thermometers specifically. millions certain Welch in United flagship us Mexico, for number which there which made and biggest States. three that States, Mexico, On covers there the from a stuff the China, United would of thermometers our ear a of think item in of about that’s is that’s go made probe our in asking In major our as standpoint, And volume well. customer, the the made

buckets. are And so those those supply

inside If as considerably you of one look online. in of you post-COVID increased comes back those, that triple each as down of supply whammy will see that China, shut

investments are not to standpoint, plenty of those as of plan increase year a thermometers getting pretty again We immune the are increased the to through. and are plays coming simply We COVID some workers’ In in occurring. Mexico. have the have made to have from That That more increase big that said, COVID out. number also that Mexico, we thermometers. there capacity factors the is

produce So to increased further to will increased big actually line amount, be for we making capacity. capacity by the can comes that supply a additional an some when that Mexican fair increase time through. that supply that but ones And should setback then it plays are a take all investments, it until some of

As States it probe pertains based to the United cover.

take up it and to We under have work increased already way again. there’s that capacity

should that So help.

demand of the comes cold cold of side, the because when will as the what the the and for be it everybody question flu COVID like. and thing it’s next flu funny bakes will through On off season season, wave a

have be I and for demonstrate customers. because been will one available. are also now We that’s that made COVID will so COVID lastly having far. Consumers of behavior keenly we normal we have thermometers believed that a in they simply assumption because a the better, that know while, behavior don’t with interested only consumer of us be think the it

were people, probably younger especially young. new before didn’t ones be household penetration some a have may of For their they this they because thermometer

side. want to of office. for one of case bag, the to on prepared, make to sure even new, on are demand get key cycle because the customers, for demand. this all the an people to having as one needle there, your they distribution just one thermometers just little two supplying in now. supply they and trick working house, of your are older customer ones old technology don’t consumer more, are more is from Then one hard work, maybe There we on insight upgrade we is should the help go wins customer that and into a well, And and that especially people for nice reality a your For things the some kind that or one thing is lost, is thread us demand very and getting fund there

guys. Appreciate it. Thank you,

Thank Sure. you.

Bolton-Weiser your proceed questions. Davidson. line Our D.A. of is question the with next Linda from with Please

Hey, Linda.

supply Beauty that think mention elaborate you what was? Hi. think in had Can you that up and with volumizer of some caught did you that product terms short in Beauty. just there But were the was demand that I growth, I of was by In in supply you mentioned you segment, that on volumizers. constrained

for quarter. first The the comments was about being constrained,

good forward supply We position. are now a in looking

supply almost beginning we So a good June. got into the of volumizers quarter the bulk of are all the we chasing position But for or for Beauty. at in quarter the demand

a forward. being that comment was is the about constrained and QX. supply comment in good being The The comment. about So position was going QX

for way that below investment there level And far in versus quarter normal any some the you how delta kind the may between of that anticipate spending clarification. and half? quantify in the second what your in the can then is half then Thanks first you was Great.

in are will of still is our double the normalized is as half on light that things done investments we be we ‘XX to back additional the year and have much happen, want would half spend that like to the we lot year. question The to on occur as to will identified you timing. make. that to would we I’m investments we How need what’s of this maybe position. much spending them not which going fiscal on we spend going sure investments means to we think identified We you that’s then quickly we a what will will because for can to to tap level that almost of spending quantify our fiscal much the have of again, going be to and revenue revenue it’s want we as about for think I to up of and normal based really the rest how murky make. the our believe right get first and very is, for our ‘XX? in had how a and in hard it we lean point on year, the of ‘XX have then We basically almost be in I of and anyone where fall at have spend the to if that in of have

it be you finite something and we saying give to could I like I full to things we are not absolute that. talking that compressed, as difficult. to to on points tried something think possible look, margins maybe and so that, And is more make and latch you as expect percentage it’s

QX like make We the we that light percentage we period are the before point, where played will spending in a year, point, to try for that it out of the our bulk on QX. the balance over in could see now environment things needed up percentage are talking make two-tenths see and tenths of how We will were time choices of a of be we to the for good but the those of you reason. out of in and some doing as how quarter and played and QX, of we some the it

Yes.

For framework terms in of think it transformation. may Linda multi-year here is help to

Troy for very were as Helen ‘XX we this meaningful and cycle through to investments set and last prepared. year, that are were our we clear went fiscal act afraid it reviews planning the were for all ready was of for So December, was of of bold we and not there budget that a to fiscal and we right ahead them strategy

that super what with what’s with half. spending to right don’t of real But that timelines. our as These is what just fiscal that that’s watch sure make IT, and and of investments we only get These are back we time balance will we things. that ‘XX as brands lean well our we think is fiscal year net the much year to have that said are the of up the and kinds pullback on of plays made, we the of our Q&A are think we Given on the has sets big and for we compression section. Not and in all on Brian make those do and very do things close as get we are the demonstrated innovation slid were have of in diversification back will Asia, majority some Helen because case this on the going committed, sensitive the alright. bold in on are and invest. ‘XX, in to and the today that us supporting yet of Building lights we making comments titration these Troy announcements not of we I that how in has earlier and which COVID fully get we terms for the made nimble market. leadership which In right that what on we effect supply out are fog have the of they now for the that in this the will this customization listed, all must funds COVID, direct-to-consumer on fairly deals choices are we

are fortunate the that ended full a position. add. at I that way get Just margins it first for to year-over-year with we the up is, up I percentage quick we If look year, mean flat quarter. we I consider to a were the win. for X point

way it. to at so said, that’s of bulk year. investments we And kind we Julien this are will And the spend trying the the of look

qualification the But though to think the go things going direction revenue different that revenue accordingly. if in revenue our if in that a plan. right we a is keeps it going if on he’s is, is, that the adjust is I start direction are there, perspective, from to

Thank Congratulations. you. That’s very helpful.

Thank you.

Thanks, Linda.

The of Please next proceed Steve question your CL is with King. Marotta question. from with the line

over you upward down you That second only verify, demand X improvements expect the Brian, offline. Good I little the commentary morning, reversion Julien, supply commentary the sales increased reversion, just Home in call, I’ll for based Health Brian take increases have assume with of your your of potential past being the in I in the one Beauty. to increase specific others earlier the Housewares in consolidated that said then XX%. within quarter question. & bit in you moderation and QX overlay wanted was the and Jack. the that sort in months? on I an can inventory second and is – a chain And the quarter.

Yes.

of Let to the it. part me go first

You do and it in we see for a are surge to demand big demand We Home, was right, absolutely some and and right. able inventory Health because only & in-stock moderation were with now demand surge that’s such it’s will steady of build our more a more strong with of we supply, that consistent, be in growth which path to path fill of going be a hope. have of to will we continuous type a kind less that

from in moderation there. still XX% quarter, so expecting we And growth are the growth the but

QX. hopefully it the across going the or as are was as idea in growth and getting and all both not signs in for So that in And of OXO, direction we Beauty then the explosive and continued re-openings direction. are OXO that’s that with the is it, way right going we won’t be right on demand strong just store not is it – Housewares Beauty, there in going that those, everything the

we longer term retailers hand, other could from cautious protracted as more are in COVID-XX. there and being impacts the On re-closures be

and think is trends, though in – they to are change things we we be that. are daily even and there positive I there seeing So can there, environment almost changing is balance a this cautious with have

you Steve, inventory. on that? question second was Could Your repeat

the that the are for you know you not the due I the been sales, providing I’m increase on Basically, into basis, that coming that if there on with such inventory, quarter a in past are quarter sales the low made supply basis but second year-over-year differential considering consolidated guidance, assuming months. chain over a improvements have X

fair not that’s say think we been is as low recently. it’s and to low, I have inventory but as

million. $XXX at We are

We as $XXX as low down million. have been

where to need So but actually already. of improved year. have improvement improvement amount going are thermometer that XX% shortly. for a not and The acknowledge we things are get the come then of capacity capacity And are we in about, we us that will we later that making, we talking by there looking we in are be got that, place we was lot but the next Julien to online

feel So that are the Year comment Chinese triple surges huge have then supply off done making I is but well. I’m like making that – the a real. to demand have illustrate big is and we whammy our progress New just COVID, of are Coming pretty inventory Julien and overcome to low, top of and on we thing and mentioned that

offline. again. you the Thank take it. got balance I’ll I

Thank you.

Great.

we turn his will time, I remarks. closing to session, reached our and end this the have of call At Mininberg back question-and-answer Mr. for over the

you, and on the in everyone Thanks call we of Thank support, forward look appreciate very your Very speaking appreciate operator with and also the for We to rolls later you with today, thank you being on. coming weeks. again. transformation much and today. to and us many much

you concludes This conference. everyone. today’s Thank

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