Helen of Troy Limited (HELE) 27 Apr 232023 Q4 Earnings call transcript

Greetings and welcome to the Helen of Troy Limited Fourth Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief 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 your host Jack Jancin, Senior Vice President of Corporate Business Development. you. Thank Mr. begin. may you Jancin,

you, operator. of call. welcome Helen everyone, Good fourth quarter morning, Troy's conference and fiscal to Thank XXXX earnings

The new will discussion then as this begin agenda CEO, accomplishments, and Julien call and as the company's fiscal business for I'll company's we performance Geoffroy, follows. key COO, Mininberg, morning the perspective with on forward-looking began provide of is brief year. some Noel the statements. comment Mr. a the and

CFO, interim trends incoming review company's the the Grass, Brian and current Mr. in financials about upcoming detail and will more Then, the for fiscal comment year. expectations

Following questions take you us today. this, we have will for

performance. may on certain with future expectation conference statements that financial to contain management's call current are based respect This or forward-looking events

believes, other words words and statements. the similar forward-looking words Generally, identifying anticipates, are expects,

of subject statements could results. anticipated results are Forward-looking the differ a cause to actual and that from materially to uncertainties risks number

call These information non-GAAP may listeners forward-looking considered differently place information other may information to and the that be This are include The company or to parties. on financial by not undue be information. alternative financial non-GAAP measures statements an non-GAAP than reliance may also GAAP conference information. disclosed calculated financial cautions non-GAAP not

the www.helenoftroy.com. Before Relations I a at all to interested has section to copy release website I parties of company's of Mr. the Investor over like turn posted been that call the Mininberg, to inform today's earnings

then by Releases measures. on the tables tab that the release Investor release contains financial and obtained to tab. company's corresponding The non-GAAP selecting homepage Press the The earnings measures their can be reconcile GAAP-based Relations

Mr. now turn will the I to call over Mininberg. conference

joining you everyone and Thank you, Jack. thank us. for morning Good

changes for XXXX. will a also posted with business the our I the outlook lot at perspective results the give you comments We recent we CFO fiscal for planned today. share on have XXXX Then level. some to start and on to turn with I CEO succession yesterday. few a will

Chief progress detail update are will on on you considerable touch provide Officer, Our segment multiyear our approaching more on plan. we Operating strategic on and making the are Pegasus, we performance, Noel next Geoffroy, Project how

comment his will he results, Helen our position, as fiscal financial returns fourth provide of He also XXXX our interim on will outlook. perspective Troy Brian to and our CFO. quarter as on

For March our to end timing at set The intend of my when provides February XXXX agreement term yesterday, appointed this succeed Noel the release press of CEO. as mark Geoffroy is I to me year. will This end the retire continuity the fiscal of Board to employment of XXXX end years expire. plan CEO has years the least bit, and my of Helen turn the XX as XX in well some the family, with more time focus and X spend Phase down, my industry. It priorities. role on will transformation a be products of to personal slow consumer in at through Troy's as

working I transition be we closely with execute will Noel plan. our as

stand to Shareholders, As proxy expect for it Board reelection in full in nominating when General will our to nominees August. our which the committee Meeting of slate at Annual filed I for June. relates the public is of is service, finalize my disclosure do

current Regarding leadership up She go-to-market excellent step further agreement and proven resignation standard has already capabilities. including providing will the employment as that XXXX The Pegasus, be our my brand am upon company in leadership. of and continued her if herself plan for is believe There's hands retirement elected, COO, I service, Board building calls practice. I for date. no under my Board Noel's in and a beyond

leaders, C-level of and our of learning of business. Troy's operations IT year, overseen past also the business Helen and day-to-day all she has Presidents, Over been work has the segment aspects

including across Kellogg's, Sanofi several than Gamble. She years Haines, more Procter multinational and outstanding experience organizations, Consumer XX products Health, and of brings consumer & businesses

also the operational world-class driving ours for excellence a matrix in consumer-centric growth building organizations track and like and creating passion She brings brands. of record

Noel She CEO Helen takes the Helen history Noel has the a culture. with reputation reins plan well-positioned era. third become sustained as company of to the an the inspirational development XX-year will in year. leader, natural of a Troy's making leading ever that strategic era when the is The Troy's is of for her she next next deliver fit growth. of

are previously Grass welcome to our interim pleased we announced, Brian As as back CFO.

leadership the XX made years of has year Brian his thinking seven of outstanding Helen during were business remember, will also Troy; we not throughout you finances CFO, with of in while company. with of and a Troy, permanent leadership, tenure of his CFO. the his company, our insights for strategic success welcome back significant of search many oversight at many his and during As our highly contributions as only We Helen years having but valued

as company well I as also his time SVP Matt contributions during Finance. want the to as for CFO, thank outgoing and as his of to our Osberg, service for his leadership CFO,

Matt's During our global significantly department continue services that more company an even team shared he supporting capable finance tenure, will the seven-year strengthened into moving forward.

memory. to we we quarter performance fourth our better results, expected business and the one unpredictable what challenging years been than and Turning reported most of in has now

are strengthen Our sheet improve further key cash to initiatives off. our balance paying flow and

and margin, operating inventory During down. XXXX fiscal to debt below levels, the pay our quarter, accelerated reduced we now expanded

the helpful year marking is of give perspective. XXXX long-term to fiscal Phase X, I With it some fourth believe

period, to the ahead many starting grew well sales point a the broader the CAGR fiscal and our set. since environment. profitability despite EPS challenges in CAGR within industry net in Core Phase XXXX, X.X% macro the at the X target adjusted grew to of during core same Our X.X%

footprint, facility has revenue new customers. center distribution to reduce in still completed and of its provides million square while our size, It In ample is open distribution to Tennessee. its capacity growth we acquisition. and fiscal providing state-of-the-art foot X organic substantial of Because XXXX, parts expected new shipping largely its an and efficiency It now capabilities other our begun opportunity for

cash us normalized pay also expect XXXX, allow a to fiscal more our debt will free our further flow we and completion of return to expenditure level accelerate capital in Its will down. which

Turning now quickly improve address that macro higher acted and belt beyond inflation, impacts rates, fiscal exercise. tightening historic to levels challenged the the trends We the Project of and efficiency we retailer major XXXX. rebalancing interest to and did from Pegasus, this inventory of well

Pegasus is savings to its objectives. on track deliver

announced cost the as and will call Pegasus, benefits we bottom-line Beyond an our saving the growth. serve January accelerator strategic structure to capabilities see that from organizational new we and as in top

over I would to Noel. to now turn conversation the like

I portfolio and Julien, sustainable, leadership with team, and foundation like creation. for of With opportunity foster global confidence, long-term successes and value outstanding passionate this would of profitable to company's the am I take company's Julien forward worldwide trust, CEO of associates to XXXX. an the during honored we to team, our Julien. you, to Helen Thank to Troy's brands, Board, in a for many transformation, support. working their next growth become I I thank and a the the during leadership seamless a strong transition. have look believe tenure remainder deeply

streams. across with am the Project Pegasus, work the all to-date I Beginning pleased progress with

helping significant While us Pegasus to savings benefits XXXX, initiative, multiyear is fiscal headwinds. in expect cost we our offset anticipated a some of begin

simplify structure, and analytics, fiscal us capabilities how XXXX. and work helping from are in finance new topline operations, we improve also Pegasus The and go-to-market our

of is and Pegasus' enhancing regional intend our investing fiscal creation market savings of our largest fuel use consumers to scheduled to marketing effectiveness we flywheel in further for value innovation efficiency to that and The shared realization services. the by delight brilliant and XXXX global in drive organizations portion and and

the conditions savings ROI. opportunities in reinvestment will We provide reinvest continue growth that on timing the accelerate to of and that macro future the to extent depend the we most ways quickly. and attractive look The more on for can the

Now, let Pegasus several me stream assist work wins. share

North The regional in which our implementation one changes of focus we first was create the go-to-market relates and on It of announced NARMO. January, United States of market to captures Canada the and to portfolio a brands. the the organizational or full increased major organization of sales benefits American across in

NARMO newly and opportunities, team scale this our business identified customers. with and ability joint short the and enhance win During to capture its significant portfolio. our across and identify The has distribution will to distribution the winning in formed new company's planning, team diversified cases some since time leverage secured, whitespace inception, continue

The aspects and with improve center accuracy sourcing and all second inventory centralizing planning Operations. Global approach workstream operations win of management. single and a supply by and across organization all forecast further and help excellence our the created standardization has builds across our to under a of now of leads Chief to excellence supplier demand He company relationship

our our inventory will debt expectations. in move us a With fiscal allow footprint. more distribution in to for and pay us on down key to optimizing inventory help XXXX, Continuing also reduction, facility XXXX quickly fiscal lower us we exceeded faster our priority

we comprehensive SKU bottom-up profitability and to meet Third, reducing a completed needs, offerings our focused optimizing analysis consumer while on complexity. improving

this items resources productive supply other of to enable simplify Through and total our we and us less which SKUs, we to rationalized inventory about expect our to less process, of reduce profitable chain redeploy XX% opportunities.

cycle. review have this our methodology planning Importantly, an automated aligned developed an institutionalize enhanced business via we within discipline annual and to tool

have very revenue on balance impact been market with the We and to careful shares. benefits these

the and outlook margin of already expected XXXX is fiscal year of rationalization impact this drivers the XXXX SKU revenue expected one Our improvement. includes the fiscal

completing our plan, Pegasus to consolidation, working and system warehouse we comprehensive by our upgrades. of part renovation, as complexity are reduce Fourth, management

Tennessee we distribution some distribution new start as allowed simplifying ancillary to our center already Our US exited footprint has facilities. us

new our larger the expect Tennessee take on to XXXX. of concentration progressively distribution facility a volume fiscal throughout We

add XXXX, being plan drive growth our to set on we is our the to leverage built and have the future ambitions. begun of elements. work strategic of transformation next successes ahead fiscal Looking long-term multiyear to new It

opportunity world, capabilities business services portfolio by shared further brands, regional growth the in considerable new and around diversified of market our see and analytical sharpening have built capabilities and from and profitability. the We investing Pegasus use our organizations grow drive and we efficiencies the leverage to to enhance the

culture employer guidance on share of its and with year. from development build to make leading it fueled to before continue Julien expect to and we of I an choice. this Helen passionate calendar input outstanding expect also We am our end associates and by of with our the Troy you

fourth to period. expectations. XX.X% Starting Outdoor, now to contribution Home included business prior three would from Core quarter the This to quarter. total X.X% in core EPS Osprey with our our and & diluted quarter, adjusted XX.X% year up declined ahead the in sales in sales full fourth a months compared I declined like the of results. months turn were net two

quarter outperformed our For full the both and XXXX, expectations. the fiscal Osprey

holiday prior the year growth to e in period. travel, and replenishment from compared The period, international the rebound the brand benefited strong after commerce good

of last on closures to We when meet inventory caught compared up COVID-related the much quarter factory year now able supply. more and fourth our demand to curtailed are

positive packs categories the that POS technical we 'twenty the for inventory and impact positively Osprey X trends in position performance and of were packs, the travel key quarter will anticipate in our packs X. everyday in fiscal brand's better

see slow. Key OXO overall COVID at year inflationary POS levels toward as drivers to and demand normalization of below home to consumer continued necessities highs of and peak from the continued spending shifts were brick-and-mortar category in prior this services.

solidly weeks OXO where of Importantly, is those on the the continued ago retailers Inventory with trade hand remains healthier we for levels, year ahead significantly total down brand. highlighting of from desirability a visibility. in POS the pre-pandemic have for

ways refrigerator One a example drive to bins and smart fridge enjoy incremental With from new have easily they food items supported innovation money system prices clear is with engaging enhancers, them by marketing before save are, to bring new to is what shelf XXXX. more in of categories strong really let sales to food designed spoil. our finding to order they resonating find consumers. with can your pipeline fiscal organization you modular you We so

insulated smaller overall the to Flask faced bottles category. away presence. shifted preferences tumblers from Consumer bottles where quarter by the were brand in Hydro from far has pressure Hydro the is softness a leader Flask the in

is now healthier. Similar trade to in inventory the OXO,

Looking fiscal a sales to in opportunities number of XXXX see and ahead, beyond. we drive

capabilities new more as consumer bottles, as significantly well limited were other us direct gives to customize bottles. also new mugs seeing and gifting. Hydro Consumers DC Flask well corporate items for edition new promotion to our in and colors automation as collections The and as

Coolers provides for The us. Soft opportunity a category also growth

and to category XXXX. in drive strong incremental the key reception to sales leveraging Flask are retailers gain to in Hydro distribution We that additional expect us fiscal consumer

our hair measurement share Beauty data. syndicated to In market Turning now position to & Beauty Wellness. retailers the we retain continue portfolio, amidst care widely category broader market reported decline strong appliances, by our and in

data sale liquids suit customer point strong with a Drybar the remained for quarter. Beauty top and growth on showing appliances of and Prestige us, Curlsmith during

the full line million fourth year of expectations mentioned quarter Curlsmith the in the for call. contributed we with January and $X raised sales in

We new Prestige these expect Drybar, as Control and behind Final Frizz, well Curlsmith. to like Curlparty, in curling Static as XXXX continued products see round in brands growth Call effortless from brush, fiscal heated wave Mist,

our also enhanced education and across We investment in in-store have proven both events brands.

both we and top protection great formulation established Ulta from recently those Tools needs, hot style especially the into launched our tools is Prestige aids in protect using liquids example fiscal styling and addition, new announced XXXX. consumer Liquid initiative just brand as product with team. This at leverage a of appliances. for its In Hot platforming our hair capability is Heat collection that are expanding already

by strong and year's tough The peaked the demand elevated comparison a earlier driven Turning humidifier softened surge normalization. Omicron our seen in post-COVID historically. have as and to January season demand faced portfolio, we last than we Wellness to category we thermometer discussed

of Despite in and market remained in declines, thermometers, three all number one branded humidifiers the category products categories. overall inhalants, Helen shares US Troy's position among these of with strong

and fiscal covering one thermometry inhalant noninvasive total our Vicks number two number in both number also one thermometry number thermometry and Over in the total is in is digital XX, margin is and in in the XX-month high period Braun ear thermometry. and category. one

normalizing growth partners meet outperformed POS. by overcome Asia. driven and able increased continued towards Osprey replenishment Last, on line supply in our of we the partially orders select with in net front, in the help brick-and-mortar contribution expectation were in we progress thermometer Braun demand shortages as international as sales to OXO made to achieved primarily EMEA and the

Julien call fiscal themes our turn now me to the to Let and key back discuss XXXX outlook.

Two and EPS also fiscal we most Noel. XXXX adjusted pieces growth key deliver you, half we important a of outlook increase major in the expect news deliver flow. the in free cash today of are XXXX that Thank of to introduced in the back fiscal

leverage use to turns expect repayment the ratio of to We and that fiscal flow debt net our XXXX. accelerate to cash two less by reduce end or

new tremendous and soon of model. this building our We so believe acquiring after soon the distribution and after value a amount to would Curlsmith so deleveraging testimony creation center Osprey be

We operating gross deliver significant also margins, earnings in XXXX growth, expanded wins expect and expanded fiscal adjusted to other including margins. operational

come the significantly Prestige gross up acquisitions in Liquids our Pegasus We believe steam, addition more mix sweetening and our Cicks from and expect SKU Hydro our As from pick we fiscal Beauty XXXX. margins to with will lower freight to Flask, this rates benefits increase rationalization. sales and inhalants, in

categories sales, continue productivity and of on considerable the built economy, several are experience pressure. macro and outlook Our financial on assumption the consumers, cash our will earnings that to

where in sales to assume many Our higher and continue rates inflation resulting in will consumers, the challenge continued of categories interest compete. softness we

consumer inventory to expect fiscal centric levels healthier mentioned, more we new of to launching last they as did are we consumption As slate it XXXX With shipments expanded relates innovation. sales track year, distribution than Noel drivers, have closely and than in XXXX. our fiscal a for to retailer

XXXX, and ESG Finally, fiscal our to will in priorities we continue advance initiatives.

key completed of objectives now including emission targets. have under ESG first our our the We roadmap reduction setting stage

plastics have environmental by members recycling organizations and as economy as engagement support CDP's These science supplier social to chain recycle the key been new as are such how of our we such targets commitments, well approved initiative. supply based as and program. packaging the organizations To and

brands initiatives, we to as stewardship. addition initiatives, our be Those report detailed in release to In ESG as annual on well corporate our others, distinguish June. themselves in expect continue to which our third will environmental

over to Brian. like And would to now the turn call I

the in and such during for of company, maximize everyone. today. morning with work I front with Good I be everyone to and come Julien. to I'm Helen dedicated forward great the them opportunities you, of many the looking It's grateful associates intend you I'm grateful over to back can for time I'm a my Troy see reconnecting weeks. back with friends. coming to to to and team do that I and opportunity also Thank days of everything here. the

I difficult reaccelerate will I integrated poised better outlook We year, more have we even structured, to believe fiscal of touch my just later on the beyond. of an flywheel. operating opportunities but emerged discussion in for a stronger, XXXX and these some our and company navigated

Before me the into I transition Matt begin, has and I want thank to all helping done role. last interim recognize company and for Osberg for he the for years the seven back over

hard express now. to it's I've me then support, how Matt, appreciated much for your and

I'm your proud You be of I'm you and for happy but you and family. will missed,

of to would Pegasus beyond. start provide then overview then for Project fourth outlook on our I that, and and like update discuss fiscal results an our with an With quarter XXXX

Before reporting, note our in and segments; I that with and discussing for do, business Home results our please financial Wellness in Outdoor. reportable our will structure be I changes line the & two & Beauty

recast You issued earnings quarterly two-segment information yesterday. historical market years after three in fiscal past basis, for can we a the find on release, the the financial closed

quarter the reduction earnings expansion expectations mentioned, and our ahead of fourth flow. with sales our year-over-year Julien expected to than cash strong better As and target, inventory which was above contributed

reduced reflecting net XX.X%, Consolidated consumer customers efforts. inventory patterns, reduction in retail shifts sales spending due decreased orders and their to from demand, lower

fourth was of The the impacted sales increases. $XX price into approximately advance as last by of orders pull in also quarter year comparison the retailers unfavorably forward of million accelerated

Care month were costs, freight offset price three-month acquisition. rising a as and Prestige, the sales an related product factors and Xoneadditional of customer Osprey by contribution Curlsmith to partially in sales, increase from and Hair These Personal increases well as

significantly with three-year is revenue than XXXX of X.X%. year, higher look base, back to CAGR business pre-COVID Stepping a at full the fiscal core our

the it from acquisitions, consumer in While landscape. this challenges includes macro also impact and remarkable shifts includes some

related have the divestitures, sustained portfolio last we distribution acquisitions, work years, with for operational done to have enhancement, we restructuring that excellence. believe over the an and growth and organizational built capability engine investments, three We

later, This to will will underlying engine leverage horsepower. position ratio an by discuss recent with will the of for. end of us expect lower paid has largely strategic our investments once all and I that we our again our fiscal to levers flywheel As XXXX continue to use the be greater

by to compared operating expand XX.X% period the XXX net margin same operating were sales basis leverage. the pleased We operating points last in X.X% of to was consolidated unfavorable for GAAP margin quarter to year. XX.X% despite adjusted

drivers decrease impact compensation were Curlsmith the lower expense, the costs, primary a in decreased outbound of and improvement The expense. freight acquisition incentive this favorable of marketing

These the factors product by leverage mentioned, & in higher favorable and channel Outdoor, unfavorable mix were operating just reserves, partially Home I mix a less within less offset and the inventory Wellness. product favorable

segment operating actions, of margin lower XX.X%, impact Home a to reflecting expense, the basis, incentive points Outdoor & compensation lower adjusted basis XXX inventory pricing and On reserves. increased

basis XX for & margin operating leverage, by unfavorable reserves, declined mix Wellness Adjusted less favorable a and our driven operating points, Beauty product higher segment Wellness. inventory in

the at shares $X.XX income to million EPS segment. similar and adjusted decreased Legacy saw declines to were income. adjusted margin $X.XX adjusted partially by $XX.X primarily was rate Net share, lower share. or factors expense Beauty Health interest tax operating both Non-GAAP XX.X% effective per lower to Looking offset a the diluted diluted operating & businesses, and lower due Wellness per overall diluted in outstanding. These higher

our million, significant of million. inventory of flow consumer fiscal corrections, $XXX of $XX.X XXXX was the the and sequentially Improvement headwinds sequential demand, $XXX by improvement well below at million and decline the Osprey both in Inventory end generated inventory of significant Curlsmith. lower acquisitions our a in of and year-over-year. was retailer of driven operating cash We million, target despite quarter, $XXX.X a

of lower below end XXXX. further inventory or $XXX million to fiscal by the expect to We

is we On in million $XXX.X toward and million cash full generated we operation. operating our free deployed as million cash year in which new flow $XX.X facility, a basis, flow of of $XXX CapEx distribution now

year sequential debt million. $XXX.X decline approximately of the ended $XXX We a total fiscal of million, with

end to at ratio Our the third improved X.X the of to leverage times net X.X compared quarter. times

of At additional to debt up fiscal $XXX million of debt. XXXX, allowed the our end covenants for

reduce However, use XX focus strong and is for our cash a to further inventory, flow capital components, fine-tune down fiscal working pay to key other to continue our debt.

of exposure we have fiscal As to rates fixed rate reduced our variable swapping our interest by market debt favorable the to end volatility that outstanding are $XXX rates. to of significantly rate million XXXX, current of

later XXXX expectations our flow, cover will leverage my I of discussion cash our free and debt, fiscal in outlook.

operating expand earlier, Pegasus structure, effective we efficiency, made Noel Pegasus margins, initiative are fund to using We and on good shared more greater As provide progress to our platform a our step a create costs. expected significant scale. level and remain timing our our investments fiscal freight We from additional savings better on with growth and to inbound track achieve in XXXX lower savings increases leverage targets total go-to-market

fiscal turning for to Now, our outlook XXXX.

primarily a to billion from and removal fiscal billion Beyond initiative, the We Wellness. of sales and a a which X.X% XXXX. Pegasus million revenue rationalization our Beauty of expect consolidated $X.XXX outlook year-over-year This X.X% includes between $X.XXX decline of similar X.X%, $XX & SKU in our & implies decline from Bath size reduction impacting from or Bed

reflects we slower consumer economy will sales environment. outlook prioritize to as discretionary be what inflationary and categories patterns a in for choppers in seek especially value, spending continued this uncertainty Our believe

reasonably in impact is estimated, therefore, or not included The and significant it be potential unknown likelihood, and our cannot prolonged timing recession is a of outlook.

that seen basis place of many We match Importantly, that not last this retailers key more on a took sell in mentioned, do in have anticipate inventory have inventory hand. year some through the improvement as Julien on significant their sequential trade will destocking a fiscal and as reduced repeat we sell year. anticipate closely

segment expectations, we earlier I into any Before Bed that Bath I related removed our revenue risk mentioned Beyond go to & from the outlook.

balance million million to receivable what million. estimate our preliminary approximately preferential considered be of might accounts current $X.X is $X and payments our sheet, balance is our to relates it As $X.X approximately

Wellness to Home our to decline segment, of to we decline a outlook net X% of by Beauty a Outdoor & X.X% X.X%. back of Turning expect sales & growth and X%

restructuring $X.XX. which of EPS of includes expect GAAP We estimated charges to diluted $X.XX to consolidated $X.XX $X.XX,

of EPS to consolidated $X.XX of We which consolidated $X, the XX.X% in range to decline a non-GAAP implies adjusted X.X%. expect diluted

depreciation approximately realize improve $X.XX XXX Our of end X.X% basis our points adjusted EPS and the growth we At diluted in totaling and headwind. gross and the freight benefit net of increase as to margin lower includes interest expect commodity costs. a inbound or outlook of an overall approximately expense margin expand our tax, range, high we mix

We're X.X% At pleased is with expected an despite to of is range, provide points. end and outlook consolidated grow growth operating unfavorable operating operational XX the margin high expected basis leverage. earnings to adjusted our income to expand by

EBITDA growth Consolidated range, and $XX expand which the our is adjusted of is basis basis expected incentive grow an margin to of compensation XXX million points incremental headwind. represents high XXX margin point at expected X.X% X.X% to end headwind year-over-year, expense and despite approximately

outlook overall for by inbound freight costs, from lower margin driven better savings growth commodity a Pegasus. and Our is earnings operational mix, cost and

multiplier more incremental and We include to go-to-market and fiscal to and expect during initial Pegasus to investments spend, consider effectiveness, marketing savings, optionality be a efficient cost the with growth effective XXXX force organizational benefits to year. in

We to additional Pegasus of continue from to savings lower expected and inbound commodity approximately million fiscal in generate with savings XXXX, $XX expect costs. freight

second inventory sold. cost from benefits of in costs generally be The year are through as and move of goods we of cycle through half realized turning freight fiscal inbound to expected commodity our the the

million target This performance, tax incremental rate the annual reinstate and $XX higher As expense approximately approximately in previously points compensation several state-of-the-art related XXXX. to savings expectation our depreciation expected of as XXXX increase tax distribution of million in the of in million increase $XX expense offset partially discussed, before before incentive fiscal includes our tax facility, basis of an structural expense higher $XX headwinds new including interest fiscal of will XXX as we rates annualize in Pegasus approximately we fiscal at interest XXXX. before incremental

changes XX.X%. Administration XX% the adjusted tax of to XXXX rate fiscal GAAP legislation rate Biden and XXXX of an We do impact the expect proposed tax or currently to from tax international XX% in a regulators. effective not expect effective XX.X% meaningful by fiscal We

At what what on unclear this and be timing. tax and stage, it still laws domestic global in is passed will form what

and continue as legislation will proposed the to updated. We you keep assess is impacts considered

our majority of growth the in concentrated terms expect of In quarter the we the sales third net fiscal of XXXX. cadence, to quarterly be

decline expect X% the approximately in in the second We quarter. first X% sales quarter to net to X% X% and to

adjusted inbound mentioned quarters fiscal XXXX be lower expect We the freight in and of concentrated costs, growth benefit earlier. as and I from commodity to third diluted we as EPS fourth

We also fully of second to the of realize expect the in benefits more debt year. half deleveraging the

a with near under the Accordingly, in of XXXX EPS we second first diluted of second year. and expect both quarters decline of fiscal in the growth in just XX% adjusted half the offsetting

our We expect the fiscal $XX of distribution of for the XXXX, $XX equipment. million for new of approximately capital million asset facility between million automation completion expenditures includes and which $XX and installation full state-of-the-art the

X.XX be XXXX, the two lower we range expected final within defined in $XXX our million in ratio as facility its and net to expectations. With million $XXX CapEx our fiscal the free to leverage flow cash and times. to the to XXXX the that cost times expect original expect range end to in fiscal continue equipment is will in of of We of be our agreement credit needs

to our distribution included opening additional million new unlock of is $XXX a facility, our currently million not outlook. could in With that our are we the further we flow which in cash of $XXX position footprint, to believe optimize in

and significant believe growth expected investments. XXXX, Pegasus, performance margin the bulk expand are savings with we fuel the can drive Starting further beyond Looking further to of improvement. fiscal meaningful we

organizational debt capital allow us optimization, to deployment capability. to direct-to-consumer optionality. believe distribution structure will focus and increase designed Our provide on new and continue We our enhanced leverage retail new strong is additional facility cash footprint to product distribution innovation, reduce flow our

earnings valuation free operating provide summary, that margin back a strong we with XXXX, environment. pleased unfavorable turning cash believe consumer growth, accretive fiscal is and operational to despite we are our In flow, in an to expansion, to outlook leverage challenging

outstanding Our debt of the to implies range times high fiscal end using market an end XXXX. X.X forward EBITDA at and of EBITDA EV the at Tuesday's our adjusted outlook multi of capitalization the

free Tuesday's metrics with outlook range Our forward compelling believe are implies that favorably high free at a flow XX.X% flow cash peer these compare the We yield of the end cash capitalization. of our at overall. market market the and value set

With the back operator it for turn I'd like questions. that, to to

you. Thank

be now Instructions] will a conducting session. [Operator We question-and-answer

And is proceed your from our Bob with CJS first Labick Please question question. Securities. you. with Thank

congratulations moves. of Matt morning. And Brian their first respective their Good and also lots and to Noel to Julien and lots for around, changes, all for

the to team congratulations big there. So

Thank you, Bob.

Thanks, Bob.

you. transitions from around. hear to smooth all We're Great and to great band together have the

great. that's No, Absolutely.

to vision? just be all So maybe that with of And direction you little a you about little should talk of but about changes want these at your the enhance just when level what can to and more you maybe speak on if spot maybe kind the that, Noel, think discussed?. then might we forward about Phase learn able want we just we -- globally put to give CFO. might to what what or how and keep, of X, you about bit going continuity the a her and start if high changes maybe bit, overview I'd maybe love given And CEO tweak

Yes. I'll to Noel. then start and on

changes management seen it that the on many And we time. company all years the all. whether GLT, coming reorganizations change, of company, the some of into first transformed new Phase all company, us of in comments, people services, as people the of the the largely the over many, at shared a subject you've creation X, leaving the the for thanks management the of So was make team,

balance up. with between blow never very that we've out careful all the and having get them change that pulling And and pin goes the of to comes various the with grenades continuity vision the through, the been right

thing the the are in the this well. right think comment continuity, which that safe is that balance. for shareholders I Change the So management, that hands as time is me,

here turn head for be which plan couldn't shareholders, with engaged succession the for the choice We year onward this it all With unanimously and And of by retirement. Board door line. towards whole transition to to is This one fully is the I'll This for strategic message right helping and the the end the for be short through and company Directors then Noel. and the these year. not with the is the the at finish very thrilled of down. send to that, more Noel XXX% it development I'll the fiscal chosen entire of for I'm dial

it. your Bob. Hey, appreciate Really for Yes. comments. Thanks

As the on remarks, the I the chapter be I'll team I look you time looking as up plan on got coming at building We've a forward leadership each look growth with next Troy, I’d that mentioned as strengthen on we're of next I some work to of the to in position the multi-year soon. know, we're together as But, got very Helen that RGSM leading. those starts of with the brands. brands. set great the for I We've the further incredible It foundations and see during forward to long-term sharpen transformation. ambitions. team working

shared organizational look marketing I even brands Pegasus We're benefits is and creating brilliant Pegasus. opportunities kind all the American positive the through then and those results forward to from international globally. changes to and invest from seeing development already great RMO, the made services energy of of rejuvenated really that positive North new in fuel behind we RMO the that more product just the And reaping really

all known Troy that next those of is I that be culture built for. all Helen So will the drivers think be areas on and outstanding passionate chapter. important that it'll And of associates of

to that And like ways. headwinds, as like relates margin in some each is. terms then I'll try a little parse is actually in are question whatever queue back of facing question, picture it of asked. one out. big headwinds, And little super. The about discussed we're I'm bit, revenue to this a just I'll in bunch guidance jump it Okay, we globally nice thinking fiscal Where XXXX, But there. asking as you normal, obviously,

I think you said track maybe more revenue that's closely but should a later. little POS,

to So, get where to of and long customers, normal normalization? back to relates or there? steps externally, your does in And as necessary? freight know, take margins. get of whatever it whatnot, revenue of one inventories, to other are terms are some you kind or or Either we just it How meaning

Yes.

the parsing thing. do Let's

I awfully days hard way, these best normal think because that's to the is say.

rates, simplest of pandemic supply when disruption the are pandemic, a those I no when COVID based that's time all at think there that is you look interest things chain way be the the normalization, normalized. pre to was inflation, disruption the because have to need

COVID COVID prepared if XXXX. literally the of said year where to is you which we you as base, or the was XXXX beginning started start of you'll in X, go three a our March pre If Brian fiscal with remarks, see in Phase the So basis, CAGRs back of start at on gave

her mentioned consumers mentioned the if that will down as we trend our towards we're look to you remarks, categories. line. continue in the in Noel at remarks So specific that categories assuming come

example, wellness during that humidifiers, air think type of thermometers, categories, the COVID. for So of purifiers surge

size we In volumizers the explosion and there our are has in case that total reductions normalized of uniquely, category. in the led the

the trade wanted bread additional supply demand. point and even so was So OXO bake up to caught time catch the with It there. on normalization inventory in they The around and of about chain. starts

XXXX. So it we there. case, In they've that was else. everybody was been our like suffered destocking from fiscal that biggest Everybody all knows through the headlines one that of out just

So assuming will see sales trend do to normalize. that continue and categories our consumption of we're guidance in the in the We softness. expect, now it's to

hard goods discretionary As because buying that patterns happen being or in not to and area. the that we're of in shift goods continues aggressive towards

their consumer we retailers lower When the that softens, it to comes But the have said, seeing less. we are in where the consumption the if down shipments track positions in trade, closer many come of will to inventory visibility

to year. we Brian half it a terms first lower of are rates spoke the of In bit of now the interest lapping rates, interest the

is rates in first expense year. half considerably going the interest the us for interest up of So

better swap get quite we and expose own down debt our interest up faster And down. cash chain, down, will than then better much when pay caught doesn't into inventory well. us As as helped it we us helps kicking you news, our butt rate debt you've own been and to the because bring normalization much our supply been bringing That flow we've volatility. it spiked on inventory And have as be after such we expect. other

So big got just word that you've and go many pretty a hoping will that see parts. through is I parsing a when the normal moving help

appreciate that's in back jump I'll Thank queue. it. very I you. helpful. No, Absolutely.

Thank you.

question. Our from Raymond with Olivia Please with your next Tong is question James. proceed

Great. Good what about seeing what could a of the where everyone your share Noel else. between to morning, appreciate little with in your a challenging with categories, Julien, start congratulations disconnect bit and bit right and now. stand, be you everybody, if Thanks. little more to said we're normal I and wanted doing you help terms market could

So if help. talk your little you a could bit shares, would just And question. have about I that then follow-up Thanks. that a

there our Noel. This at on and share we at would leadership things some OXO of quarter on Olivia. are very position. purifiers I et filter homes inhalants, positives first going canisters changes food as picture market lot of picture, water of hold we Rx like planogram quarter, in to look to look all, EPA. kind did see I we rebound in, But a in are when Thanks, I see shift products continue a is strong to say shares, new new when We on filtration. air positive I trends in areas mean big on where when going some from as factors, based We shipping portfolio, at see positive different look with what's happen, shares, when in quarter Yes. big cetera. the and the share positive performance we

particularly softened that's bit, on As has we're volumizers overdeveloped. is category pair where And appliances, where a mixed. share Julien our little mentioned quite a general in bit the in

volumizer some Revlon some do little We see subsegment a far strength the leader bit share and see but in the with volumizer. remain by of in loss some We our customers. of channels there, importantly in that

from you my consumer I Insulated mentioned the as tumblers. shifting bottles remarks, beverages, to see in

far We Hydro by are Flask. leader bottles with in the

And some has remain over shift the in innovation Flask. right Hydro consumer coming us. of very do see in shifted brand, a lot so as on tumblers over now into bottles to Hydro now, there We've the consumer loss the Tumblers positive is Flask right but in strong we the and share got impacting

COVID share period And on strong Gadgets, cetera, the home the we gains itself Kitchen then but the share availability of of some had everyone results that during with bread, on OXO we just. tailwinds positive saw have. really saw baking a as OXO, some supply of some et also lot we really category

little off of we is kind but coming normalization we of of general pre-post-COVID So over bit like the if that. in kind that what our look share a range, got of we've of share

on bit what little of both portfolio of a walk of the it's and see kind we So a sides the of ledger.

discussed that then, or obviously terms assume the don't for if thinking imagine that see that the But rationalization then as you fiscal XXXX. of any opportunity about opportunity Noel, the of already helpful. been much strategic pivot from expectations major and portfolio that's been super you a there? architect I'd you're further And own you about change Great, with in SKU the well you could your how so work touched also on talk you've have and as Pegasus,

that right. Yes, of been project joined is Helen Troy I a has since started, I Pegasus you been Olivia, I've where think, spearheading.

broad We're And progress in progress. pleased streams expect Brian as the and in I range gains some mentioned work well, we're really remarks, the pleased continue. so, across see the organizational with of and to areas, from a did I'm with that changes through with that efficiency seeing made, as but effectiveness in with And that expectations that the particularly our I pleased we flows seeing. and certainly we line Julian we're that XXXX,

our and and for now the marketing and that. business is brands that customers focus the product North customers, I are development and to looking for put units new I'm conversely really on think RMO momentum, with and American The the gaining able excited on

think terms I of in SKU rationalization. a lot the did of we portfolio, do

the full at across focused at the remarks, my bottoms-up looking was the a and about wellness wellness looking the SKUs, as analysis at profitability, very outlook, more probably rigorous all a our of in SKUs in XX% included mentioned portfolio, side, and beauty disproportionately did it. exercise, of on it we I we As look of productivity,

our in included that's And outlook.

at it do and forward. right taken we'll that forward also on annual process the we of making we we're our to this, so we've and have choices basis continuing to and an this regimen think portfolio it, go excited hygiene that and codified going look I as say

with so Thanks everything. of much. Best luck

Thank you.

Oppenheimer. with Parikh Rupesh with from is proceed question your Please question. next Our

thanks morning and congratulations the team. to question. Good And for echo I'll my taking my also

and you in just could well, my you and thinking guys So year? for outdoor expectation contributing look Flask starting for curious beauty to if know, about bigger wellness, you or the with declines I the declines what's guidance, outdoor, I upcoming your OXO and your are just growth wellness, I just home first give beauty color, Hydro as how and the and at and expectations, question, more curious sales guess guess, as and home

can Rupesh, I Yes, start.

think going and I there's a puts takes there. lot of on

million You know, primarily fiscal, going XX we'll of into acceleration in the of which $XX point increases, about the sorry, there. the orders an that was ahead of quarter prior comparison, year, price is fiscal to out there comparison fourth affect

that's that million bit beyond revenue And called it. year next of zero XXXX. on fiscal we for then a little a that's assumed So impact basically $XX we because having out year,

the a SKU size, is revenue about then similar which comparison. on rationalization, also is the And weighing

those there, you growth you would and if or those normalize situation. things you take right be for exclude a those, three to in were So

our two or leadership So, is them look to expect brands, across to you you by The not we grow. that's growing know, we know, do of that the little we, would expect there's are rationalization. a biggest impacted many three and, one that say biggest bit one you it. do grow I not if skew of

the granular of know or why but another, I it's if or about growth. kind an that, overall feel. to that's of that's with area know, respect more want to kind a you a would than So, say lay don't overall specific big get decline one asking I land that's of, you're you versus a an

question. follow-up Okay. And just maybe Great. then one

so freight inbound sure, for both, think you freight, expect Just on savings. I

outbound at expect Just year? curious, if benefits quantify expect for And you as a both look inbound and this to we do freight, way the you savings? there's

current been freight shipments of and realized has immediately, out rates that coming based on of those down, down, I kind come SG&A comes Yes, that's almost instantly are The that's that's for savings the in a those think to that that the half-weighted down inbound bulk and outbound because next and product, it's tailwind is cycle of why to immediately. freight that referring time through And sold. fiscal back XX. realized cost takes and savings, are year year we're goods of which

Thank pass it you. I'll along.

you. Thank

question. Our Please with next question is from Susan Anderson proceed Genuity. your with Canaccord

Hi, let the new good details Thanks opportunities. the And on the my all today. morning. for me say also to team congrats

curious year freight not about. with the Just out anything there's thinking going a Pegasus going this of on, about you I just we're that this the just that headwinds the tailwinds, on maybe if some guess, then be else considering I'm and looking driver that's savings, all to year, million, fully talked $XX Pegasus and also not offsetting

excited up change case management. for we're to also Yes, the change the they're drivers, and the In of all, you and the hi thanks huge. Susan, comments, exciting the about growth

fast after champion coming this time company. gross the being in them first and line, at comes which beginning. reigning a into XXX of mentioned improvement company Liquids, up his XXXX Gross of margin which the Start in grower a just and and detailed and Noel's. from mix bit. continues Bar, be We It bit. been acquisition the margin of fiscal which little has it one huge. in significant. expansion of that's Let's to for grow, It's will the the to some fastest bps be of between now between Curlsmith, remarks XXXX. Brian Dry that's There's fiscal growing Prestige a parts going a get mine

The Hydro he'll fiscal way, side grow to -- Flask, the so big all the fleet that are deal. XXXX well that above expected all big average in and other Drybar on by that champions, sixty towards and our

expense the you this put of effective distribution a get Noel the back remember done that's depreciation North up of moments this center. the are $X.XX mentioned faster target as to with a the Pegasus expansion that probably absorbing margin why not that that is of new site, to about the flow the now comment and an down flow overcomes as of you also get take the EBIT is the well celebration ability XXXX cash to operating American get through work attacking ourselves future other expansion and goes but of expense all gets that grow the is Bonus also for only the inventory about building in combined so The all putting as efficient magic but interest creation being we're it's running more also year-over-year you'll cash making gross really margin this get egos and hurdle terms that margin, set through brand together able you'll to of work in

moving XXXX. that's exciting So and for that's it's why the parts

to get mentioned I now. don't the Florida, As wait have win down in you XXXX for to

add there. And a just examples bit drivers. our say mixed I'll Julien growth little I'll expecting couple specific just gave margin on as We're a overall. rule. highest a and general businesses in margin

of the best the trend growth So it's year. not just for in margins. examples. We the kind businesses have see the It's next that

So good us giving lift. that's

beauty, how spend we think lean that cetera. was to prioritized some have growth work say, purposeful we And to did, was great was we our That those like parts those of we against margins, of business prestige, a great the but we do in look. the outdoor, portfolio also potential, et things. It

bit on so versus little just color sell-in in could That's if I the Thanks maybe very sell-through some helpful. a much. the quarter. all Great. Also, on ask

this year. expect think more I you be to you it said normalized

there to just first this some curious we're I'm kind of still or year. in if of half work the do yet So there's

Yes.

couple as are the think I a together. what in know we sell-in seeing more track of closely You prepared remarks, us sell-out said and

look our of less All of from consumption in as money is spending then like, and of the these categories seeing retailers' are And services, what categories. will it staples, levels on patterns we some of consumer consumer there. follow many softness on their suit inventory the depends on more always discretionary

visibility say sell-out. to retailers come, a of So, sell-in in what's it's going in say in saw to the we but four hard definitely tracking and I would quarter we have closer

such had we fiscal what in dramatic as a have expect So don't the year. to impact past we

Okay. Great.

we sales we're may conservative No, in And in thinking remarks. being extra guidance. careful you our were our be very

than trillion, are that in Consumers X in going the less We buying on COVID, are the trillion rates categories up, is less. balance speech, consumer to coming expecting from sheets pressure or the if economy interest are trillion X original that's inflation, all down X pressure. Those consumer. discretionary

Bob. our to the normalize, comments We categories expect with per

So the in should expect huge forecast are on some that just Noel comments sales it that made not that a you basis. tailwind year-over-year

have positive built we not to trade there's So a talking a is that's in, we Bob's subject you're don't see of terms specific since consumer use of and This a lot that bit we about. word, the just, built own the of in in normalization of one recession. uplift, have inventories on nor area

tools tools, the category, versus the then great. Okay, purchases give Hot quick could you any like Drybar the a any I'm seeing say, far? consumer also beauty in on And color Revlon? That's just Liquids so are new Walmart, I'm And put then helpful. curious, difference guys on any if really then early you you curious that into on between, like Tools a higher-end like and reads there's

Yes.

that XXXX. performing part beauty So and would overall, well. our we about the continuing say talked foresee business of We I prestige into is that

So Drybar, Curlsmith kind into of falling realm. that

I see down appliance volumizer more a we That's consumers Revlon, of some new volumizer. say as a mass there. of expensive where on in much parts either opening did kind we non- think we retailers, Revlon trading will like distribution retailers that price some not more. point, of on us They're the get help would spending higher end,

As normalizing. Julien kind subcategory is mentioned, of that

some retailer we're So our XXXX. tools get into to we as of look pleased some mass customers Revlon other into back

We're for I is that excited great. Liquids new Tools say early Ulta it. about us a very but I merchandising days, Very, looks in can launch Hot mentioned. the that

lot really was recently Liquids. in of Our Tools on Chicago positive Ulta team Hot at a show the buzz and

So we're about it. excited

Great the and products in expertise were leverage prestige to from line. that to able excited side and experience great our really develop some a liquids we of

the luck the year. Good guys. you much rest so of Thanks Great.

you. Thank

you. Thank

with is with question Peter question. next from proceed your UBS. Our Please Grom

and Thanks, the everyone. my operator, to as I good extend and team And morning, want well. to congratulations thanks,

a is that maybe savings three question about as to savings first reinvestment over how you on So Project discussed are how specifically build the from question In expected flow-through? your balance, would think Pegasus. discuss my to my next building. brand you while. the years, in versus the frame -- is reinvestment, think It's and about you more prepared But you

XXXX I pick with I what particularly we steam Yes, kind know you bulk savings of come. the in fiscal of as would where Pegasus up say, the

also Our aim to to but to into some back reinvest through flow the brands business. is the to some line, and bottom into have the

come As we but those assess business. reinvest those do to both. see able the be balance savings in opportunity how two into and things, to will look really the to back margins to expand We the

than to for we highest and savings. in or in about the see if opportunities consider reinvest spend look into we prepared our faster on growth expected, happening, be we see better remarks, look to fuel top what the talked results see we savings we'll performing if my I that potential than we line to opportunities. continue accelerate We'll coming expected, on success. the If to

at kind a bit do got what add just I coming of look different we maybe of before, and history to it because I'd slightly I've little back. Peter, now used

would organization to now, leaning kind dropped am growth. line I more approach leaning, towards, XX we bottom used and to the putting the I Noel we on say XX. XX-XX side maybe before where and the are right reinvest and I of personally this fade think towards So of

not hopefully, it's that, comment's don't spot we overperform, disproportionate think a investments. it into And that know. or on overperform I Noel's taking we're maybe putting I if we that back but of promising XX-XX, and a amount XX-XX growth So as

growth, you'll growth. towards So change, and a how invest hopefully, weighting see in mindset definitely I that and the disproportionate think a is towards we in

leveraging I scale our of the of these across by all structural brands in also spend. think changes terms encouraged the I'm in better

and the another spending, we're So I to cost better effective be regard. organization that going is restructured scale going more benefit we've in because think to our leverage

higher So multiple more think hopefully level see and cost a growth you also We there's investment effective. in there. benefits at

way expected recovery about helpful. just you to away that's long-term No, just mean, I you how get XXXX. you that, the earnings an you the perspective earnings would where And guess, that. long to back a think outlook can as XX% here, rate the frame think on XXXX growth, really or when XX% about I over the know And prior it call balance exit in kind right, I of all in But embedded building to how months? last maybe the earnings quickly fiscal we're from XX the from were you of disruption

bit a the depends on It consumer.

categories a is company consumer-driven normalization. This there. the start Let's and about and comments

to predicted, that is the we've talked they'll Assuming down clear, be trends, thing the normalization pre-COVID with come earlier which pre-COVID pre-COVID much but not trend the to pretty occurs was Bob lines. levels, as the

go to the goes, meant. your as X% is, normal so we re-accelerate. growth classic what as answer point happened. from years, there, So the But think quickly consumer of GDP, That's how I about the COVID COVID to if can X% during will the trend never question the

of Excuse me, beauty the Pegasus.

for growth. As go-to-market example, side the very savings. and ability and not has of cost helpful. us North do this American That's gives structural around, operations the savings, investment RMO to an more into broadly, just the with and consolidation the the extra branding more get is It just to nothing but plus sharpening the Noel side, on changes the mentioned, the innovation

aspect, really think about will I flywheel the -- shy. I the talking won't reinvestment though, answer in view. that say, be the that's you I'm my

we as will on have into topic, is willing. availability as point the spending happen. the make soon opportunities, at is the success chomping bit As them team consumers we and we have And the the which the about the

that mentioned Noel new that reacceleration, roll to a will strategic the to to we quantitative the of way get we later in there year, this try terms come you targets plan, year. next long-term In the calendar over once out, put we'll out it see new the answer

luck you and that Thank forward. moving for of best all you. Thank

Peter, Yes. welcome. And by way, the

on you I think Troy. the first of officially with having guidance it's time initiated Helen

we're the company. covering have thrilled to you so And

I appreciate Julien. Thanks, it.

turn our I to to CEO, like session. floor back concludes This you. the comments. would over for Thank Mininberg, Julien Q&A closing

transitions we as all this ways in with all we that make Yes, comments thank over We're and important you, XXXX. Thank you the the operator. a year And the thrilled your is support. for interest fiscal the transition talk. course of

think to one consistent. I which themselves. are just getting frankly, And good out are, that see what crossed they doing we the the for by our numbers, off narratives are for speak It's we in one, it's intention very is what some marketplace remain exactly to said. of the

and So weeks. look that, forward much coming virtually seeing operator, the next we in-person over week our many very set you all We appreciate of With end. on support. the to I'm

This Thank today's you. concludes teleconference.

disconnect. may You