Helen of Troy Limited (HELE) 8 Jul 212022 Q1 Earnings call transcript

Greetings, and welcome to the Helen of Troy First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Jack Jancin, Senior Vice President, Corporate Business Development. you. Thank

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the million to to for and fiscal impacts the range current a million the of We spread of year. 'XX fiscal and the fiscal equipment expenditures remain COVID the related for net timing at million the entirely the quarter the cost be and $XXX costs equipment from $XXX state-of-the-art in first years consolidated Due estimates the to million the in distribution to for Preliminary growth foot of we expected Houseware with strong growth expect matter, square and facility shipping X and levels. total related new construction over assuming center 'XX $XXX automation 'XX new comparison distribution $XXX concentrated fiscal 'XX capital estimated to core the initial segment. expect asset of include to events in fiscal related 'XX, sales EPA of million expenditures restrictions which are of

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to Although, 'XX. growth fiscal segments and with Houseware three net quarter proud able and the segments in are all decline, the in our outlook the deliver results calls about we for in we are first excited expected are an Beauty sales overall of

of shipping perspective. a our elevated goal fiscal EPA the X.X% perspective, stock 'XX with X.X% outlook from to EPS of For diluted From growth impact in imply excluding sales the our our core initial growing forecasted would adjusted base. action, unfavorable core of line

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our to much the offset inflation. cost of expect mitigation We plans

significantly prospects EPA of the impact Health longer-term to expect sales or not Home, volume other impact reductions so do of we the the fully estimated in However, company. as & matter the attractive doing segments, mitigate will growth through cost

Excluding matter, estimated outlook implies growth EPS EPA of core impact the to dilutive our adjusted X.X%. X.X% the of

in to II. the And operating environment. continue even have Day to we're approximately to growth we've value least and our outlook Helen presented first we we're and long-term done. have portfolio, I'd of EPS Phase are of during at the mentioned, can able operator challenging sales shareholders X.X% rate our Investor light return for Troy stated with and accomplishment and that EPA EPS in is tough and challenges back well targets, our growth long-term quite adjusted the of that, for targets annual set impact we and perform and EPS only external it our adjusted growth. 'XX. If 'XX of II we capabilities we Phase to May this the to rates balance consumers, successful, average organic approximately from back XX%, X% our believe questions. fiscal of allowed fiscal to believe to seen, the II matter rates and times sheet, 'XX communities strong we targets to and X.X% ahead that Phase associates, in and to adjusted despite with that strategies, XXXX. annual The X% to net most which advantages is believe fiscal with us we the customers, closing, of would positioned our holding sales We scalable estimated business turn a equate long-term of an deliver sales and growth in As Brian continued be strong, during believe fiscal platform In to like competitive circumstances, the of foundation of core 'XX, return our 'XX believe growth outlook well of diversified the for in our remainder compound return we of can get I deliver growth for and

coming Bob is proceed Securities. your CJS now a with Labick of session. question question-and-answer be with Please Instructions] from first Thank We'll Our line [Operator you. conducting the questions.

to And announcement his his like with start Brian, Matt to of morning. retirement. I'd first the my on on to congratulations Good and starting just again announced role November, in new

Thanks, Bob.

appreciate I Thanks, it. Bob.

Absolutely.

products? expand tell similar little are hopefully similar to or you issues bit, question? of And having maybe companies So, the can specific labeling in Troy and can are claims other with what you us issues claims a these Helen

years been some our think the they Yes. had Hi, rules, Good on Julien. the even that then and Yes, of on their it's recently, areas inquiry It's understanding claims a your recent further. in question in broad Bob. in has COVID investigating morning. have EPA I only era, there,

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hope We into them, a have it approve submission shortly. they'll and we

event? Do or have to you think isolated this do about an as should how then, Okay, great. event you longer-term? beyond, And view impact this over 'XX an medium or 'XX this we on expect That's fiscal and helpful. Thanks.

other a it's well. or it the And 'XX. focused Yes, of have great analysts as We're I question. two fiscal on know one

for I than couldn't imagine mentioned that press hope, but air, it's walking how I on be believe and in release our we isolated. but [Ph] away See or how on be the it soon small. recording one, clarity, And product, emphasize clearance is anyone water recovery case this I regard. have humidifier on air, absolute product [say As of don't and as the reduced able our way. base. to from this They've I turns along It's our also call, on innovating and been recovered from to hearing be mentioned, that one, already too And is for years. products. fiscal the it the the are purifiers, be from serving resumed at anything just able just call, 'XX out a in the plan. we know was of the given that has will there's shipping that contain and In our still] the to all to the opposed final more will the consumers the yet. as Air little with we've well, the all once in we EPA the think indication to it therefore all outstanding basis, no as quickly grow within been wrong We've concern hope These

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been to And bit, your increase sense that you again quarter to last last sheet do kind this clear much you've forward? a little you the you Obviously, give quarter, us and using quarter strategically been it. then, great. cetera mentioned Okay, how expect just your of before Can see balance of out et this where your capital would shifting you've going did is going how a at inventory. working inventory play gears you in very going forward, end,

this as to use be the Yes, things color glad and take balance some of on we're that of environment in. well. in We're our have advantage to sheet Matt, position a to here, couple may

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today stuff costs good the owning at buy So, us, and customers. our lower to for it's from helpful is and available what's to

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getting QX, might to think parts talked with with everything of in we'd year, to Julien, in there's I inventory what's to FY a Julien you see even ended where and the add supply getting I but agree global of maybe chain. about said, happening end close Yes. 'XX, the increasing but still from down moving lot just like that, And I we potentially

asset definitely of expect to we end conditions now we and where from it to the are our we view the able an year. be decrease So, as to

and I'll for in one great. Okay, last back then And jump me, queue.

investing XX% addition round growth, moving last quarters margins numbers On over lot reinvesting but behind obviously reinvestment parts the growth, have XX% using quarters, the before a six shown that range range. the in of investing prior six -- been with Houseware and to due math, side, you've growth. in for the the tremendous pandemic, strength, There's the been in for the versus this you've

incremental you in the so, margin how reinvesting like balance growth And why, my for medium the the balance profile of 'XX fiscal of long-term, contemplating, expected is over the the to are right and the margin year? question and and what's for

Matt, run investment the it the would part? be on great especially and handle to on rate for you that,

Sure, sure. Yes, good question, Bob.

you're we we of mix had can or if past so OXO as seeing, we think forward look one at remember of and perspective you'll kind six Flask, over is impacts looking we're even less lot segment of we kind as and by the of margins from we look of of, things Hydro quarters well the mix where and So, Hydro inflationary company mix as operating being pull pressures can we that offset that an of seeing. time of we a we margin being more year-over-year the in with lot Houseware Flask and the costs, able back a of to grow we're kind a the as mix in 'XX and fiscal driven flattish more expect the operating flat getting improvements that's

we So, continue some to closer to we closer we there'll we that to with think there to get used that be where segment, continued we'll a I be to But and lot there. a we've you're And what want lot that run strategic of Flask to there, protect the more I to are opportunities opportunities can margins make point, XX the from and growth than able that grow competitive environment, your to that of investments quoting. rate and things continued think quarter lot also of making a have the in sure DTC been to invest we but Hydro investment especially lot six XX. a that improve run want

right, thank so Got you it. much. Super. All

Thank you.

comes Parikh questions. question the Rupesh line your Our proceed Please from with next Oppenheimer. with of

for my the congrats taking also question, and on promotion. Thanks morning. Good

Rupesh. Thanks,

question guidance. guess I out to longer-term with the want first I So, start is

is EPS commentary just FY we there the XX.XX of the off XX.XX So, should core What in the EPS the to X% FY organic for base? think X% maybe so 'XX average earnings clarity to and growth how off is 'XX. base, growth the of, sales and growth on be it numbers, more about thinking some about in terms

Do you that one? start to like

bit little of recover it at Rupesh more uncertain more it spoke, as Yes, Right jump maybe to I'll But and going feel and good we Yes, of it. you to impact transitory make air how in. a the to terms take water. and then resolve to this Julien question. point this possible free is short-term want humidification spoke and in now like nature Julien, we're EPA

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So move help to we'll and than intent see is what be customers, And keep which talking you This consumers about do not solve to now. goes. But that know. in our to let ones right how turns this for it's transitory then do Matt's by able we'll should if We'll harm it's to our and can guidance forward the see base, better, better is we the how for it from guidance. out. that

timeline the does a just And how about? Okay, of the filtration guess and humidifiers? any in air Does little the then the more of great. should shipping, clarity so think there what helpful guidance just for more color. of I That's on terms guidance, in we terms impact clarity

ahead. Matt, please go

Rupesh. Yes, good question,

the on the no low-end water, in the So, and expected of for quarter affected. those the shipments of than as shipping the guidance, high-end given that what then, third expected low-end and the that the humidification, same only high-end, quarter products is, the air effective difference for we've quarter. fourth products during second air assumed the are extend into there except guidance The no I situations we've think air, in on shipping is is all

to the and we've it EPA and that but of we there's all lot dynamic play So, try the how a a things We're up in drawn of than working said, kind make here. with assumptions, that's we've working And we're those high of like situation. low-end. really got better

Thank pass along. it great. you. I'll Okay,

you. Thank

your with is question. Please of Anthony with Company. & Our next question proceed line Sidoti Lebiedzinski from the

question. promotion thank Yes, here. your good well, morning and taking Congratulations, on you as the for

more So little on to inventory, little bit just about this touched obviously, a bit, just wanted but you so get clarity. ask to a wanted

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Yes.

through just point saw broader sure it the Let's about growth. And here outlook. segments. in a I'm there's the you go

arms with let me you. So get around try this to my

start Just the with Beauty.

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water with doing does, same do it we'll into we'll purifiers, also the demand. which As now. that And shift we're right

sense guess is don't growing those and constraints. category-by-category, which faster. of I digital any face even international, We So we're

have meet inventory, we will We and the demand.

it. Got

thank Julien. you for that, very So, much

three acquisition talked So, on you targets call about your April, in attractive at. that last conference having were looking you

an if that that see you is issue? to or activity perhaps this wanted have that, does down update an your EPA on issue M&A and that whether slow Just

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that. if I'd you're not probably firepower, about suggest worried that So worried we're about

Thank yes. couple Okay, for and you just that a here. of quick questions

have you So and more just in and else everything terms out dealing of else you there quarter the just there? supply like seen the with the ended anybody chain is it for issues overall out that issues or seems container improvements any of are since the same,

where it's I sorry just the largely chain supply not things fairly anyone our is same. the more but disruptions the these that who's still this the for uncertainty, market, trading, is of And Yes, market general but are know consistent. uncertainty, hates that uncertainty, one which it's of

are do There one So, us. there's shortages. think of well to in China, uniquely with a outbreaks what's There something some really certain COVID Southeast for example, documented ports, at are container happening.

obviously, Northern like are those some go shipments companies some rerouting to the to of So of ours ports.

and States, the our an than and example. into of that the a congestion, multiples which contracted United more So, bring contracted bringing our both market, have ports think least Ningbo of then as the historical is rates into using to we And rates. those of MPM them spot rates them when the

the So, better, and we average. do been so a as batting can far, we've well more that fairly doing the

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of better reasons. than I most couple One think we're we for a doing ahead of it. got

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way the plans since very And We've think every was mitigation come April, evolving. so just guidance we winners. so, long the couldn't situation are I because give a when day

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guess that? Day, question out there some your okay. is, it, meaningful or the clarity that trying call you was mentioned Prime last from And more Brian benefit Thanks. Got of to shift to about there I Amazon was, just get anything

Matt to it Great question, good. answer to Anthony. going I'm It's so it. hand over to

of wouldn't of drivers. out. would the front growth I the it we like it it was called mean definitely the we Anthony, drivers, drivers I And the in broad main was of said, we wasn't put contributed. I it one say of but based. It was Yes, the one had but list. that one

isolated Anthony, was it Beauty. in add, just I'll mostly

was not it whole driver, really Beauty a So company. a

be if in still you'd off the million XX% that of even couple took the bucks, you It's XXs.

it, best all of Got right. you, Thank luck. and

Thanks.

Thank you.

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

Yes, you. hi. Thank

Hi, Linda.

I'm to orders with and shipments to from supplier from wondering, Is products, you these second smoother think retailer's similar some that retailers with have anticipating stopping some then to what us question just this shifting what price now getting we going were how you you the categories taking bit need demand with tariffs? had little you is tariffs, is because categories, So how is regard else? pushback pricing of their are retailers tried So wondering you price to reship issues to the and inhibit those these remind the to than the with do the able going you some my increases. in are I'm pricing intend to kind from to fulfill categories as it and in did Can back the combine on from those handle pricing their just Thanks. you or in go a and too somebody reactions business so the to they increases? the do price once of of with you then are take that

take Yes, that, three I'm good. going All them into the since the me there, three. to up in questions there's on them chunk let

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here huge a makes this we've getting out. we're to is where becomes out idea the not, of so taken versus taken out of weeks suggesting what been we're And this So differences, in inventory that's avoid that eight important. trying

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hope So, the as as back-end, I far that helps.

one quickly that you And described, In reduced. of move retailers has to are them the EPA strongly we've the and concerns said, concerned. some terms far, of our reaction, ability concerned, as demonstrated are with those it's that the so

of sympathetic our situation. working kind So the enjoys they also this I'd nobody movie get they're what they want, and with customers. customers and They've that seen too. Frankly, say they the And sympathetic. should, us. are they're

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can then, ask because we seem personal And your, investors rather care valuation It about just questions Julien. I the the thanks, just business? from sale the low. Okay, did to of some got of

valuation I low. seems that there the business it your view have revenue, times generate like allow other business on to the think on why for it of cash and just initiatives these that was and X.X you that, What's even hang to going? sort not something you for declining of fund some to

have I'd Yes, if appreciate here sure may super a this clear. then on might Jack let say just and me some little to Matt views add and make to everybody's

and market pay. actually we conducted market a for half a we're years all, confident well would or about ago of process, did we we the the price First year that two that a and broad as sold

of just a of than cash that sell of of whether right. fat believe part years, did this it dollars the of out last multiple given terms flow. six about is to for billion comments the more terms business harvested of five, this the a In we perspective was at that make, you and we that already EBITDA, we've right times EBITDA cash price, we This flow, in taken three quarter

here this declining. you but for is that and say, and in there's buyer out, cash it's of the yes. recognizes we declines, left answer harvesting we've So, so at that still and and they concur, the might idea And as done And look it. paid it

couple that those valuable of worth to and the decline, received earnings three less year levels. which less in Also, out next that that I'd forward years we harvest at the to Xx in of like at were So, point base some us. sold becomes we've as of were fast multiple, rate it that in you years

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the Yes, a add were line, of Julien take especially I of looking declines they this you're kinds did plated maybe color a bit onto in to you're in to little in when top market, seeing products able pricing. accelerating. And COGS, what at the were of less we kind you're said, seeing those

expand when that, even then ahead we you've a as basis, like that and hole. margins got So you've challenges more to on that we're are creates kind of an annual and look at our our trying portfolio, operating got declining, brands

a got dollars a could to another you've that fill there. from having against and So, margin that you're growth gap expansion, fuel segment couple solve actually go to to million to

some getting perspective, So, from said, and helps top what from out drag overall it back line. this an to takes line bottom Julien us ROI and

help better going business, in reinvest we back So us to something the is think that ROI.

that that half-a-point overcome we've to you do the math, of so so up numbers, published on or you the all easily decline. don't from can and drag just the Yes, there's have the fact a that pick

But you in look in surge. at most representative really I Great, the nevertheless, POS decline because too don't a I in shows when recent guys versus it's big growth COVID business. not quite very strong then know IRI can weeks, look data, actually thanks. really whole it your of we year-over-year just the the much finally, you, at ask categories And that, that your prior-year during of

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stab number XX:XX take IRI, at me mind meaning about the of XX% let in that a in this. The what is my XX%. only comes captured is we Sure, sell not

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further. much us gets it So,

big like though is is or rest international those of even consolidated international, the than on pretty IRI of there, on just XX% up faster in Linda, of something of The a not is and remember, the company, basis. our variable none the I which ones databases, any other board put big just growth we And the in growing mentioned. sales

the there's such a mismatch So that's why in tracking.

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So that's so it's why different.

So, hope that helps.

Yes, thank you very much.

it. sometimes thanks. replenishment idea of like generally, orders something. things the demand it's We purchase a pretty and all square the around get the little the retailers Appreciate well. through just up retail somehow demand just yes, demand, year, that please a strategies but we in And Sure, bit, or move the course generally shift don't inventory over their

you. Thank

question next Marotta line with Please the King. from your CL of comes question. Steve Our with proceed

Julien, and two little quick and questions, Brian, morning, I running know Jack. a Good Matt we're late. Julien

repurposed for EPA The is can inventory regarding that solution a packaging considering a to potential products, is, obsolescence? the first issue? domestic minimize that domestic be Is this international

some And but it's and not possible, the preferred. UL plugs different. the voltage the reason or because ETL It's the and is, of regulations are type overseas

products So what international or it's level stop sub manufacturer better towards components to it and at repurpose and that at the the the level that's components done. internal we've

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for thank of comprehensive a product been an you. And effort your minimize there line? in across my Excellent, risk in the of packaging question, the future to other has categories this occurring current final review

taken strict emphasize We've are I that the hard don't yes. their how to EPA of by a strong look, regulations. Yes, interpretations know these

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At questions. over back to no I would are further turn closing call time, any like management this for to Thank you. remarks. There the

course of everyone look Yes. forward Thank you you, about but for really with of report spectacular some next the quarter. share something you thank results when a Troy. over of in and in today of And first continued days, joining of couple many tell the asked that, you, couple for otherwise we weeks, a between, we nothing speaking and know coming big We quarter short will but I us and further out interest second October. we if in Helen comes of Operator, your and our we'll progress. nobody to had did, in we you,

much, a So, and you very day. great thank have

your for today's teleconference. conclude This participation. you does Thank

time. disconnect lines Have your at may You this day. a great