Dive Brief:
- With the backdrop of its fourth quarter results, Helen of Troy announced its CEO Julien Mininberg will retire in February 2024, according to a Wednesday press release. The company’s current chief operating officer, Noel Geoffroy, will transition into the CEO role on March 1, 2024.
- Helen of Troy — which owns brands such as Hydro Flask, Osprey, Drybar and more — reported that both core business and consolidated net sales declined by over 16% year over year, but increased during the period compared to 2020. Operating income increased by 6.6% to about $53.7 million year over year while operating margin increased from 8.7% to 11.1%.
- For the full fiscal year, the company ended 2023 with decreases in both consolidated and core business net sales compared to 2022, while operating income decreased by about 22.3%. Helen of Troy expects 2024 consolidated net sales to decline by 2.8% to 5.2%, which includes a year-over-year decline of $35 million due to the removal of Bed, Bath & Beyond revenue from its outlook.
Dive Insight:
Despite a decline in sales, Mininberg is looking at the glass half full as Helen of Troy makes progress on its turnaround plan, dubbed Project Pegasus.
“I am pleased to report that our fourth quarter financial performance, including our sales and adjusted EPS, was better than expected in what has been one of the most unpredictable and challenging years in memory,” Mininberg said in a statement. “We expanded our adjusted operating margin and generated strong free cash flow. We used that cash flow and faster-than-expected progress on the inventory reduction initiative to accelerate our debt pay down in the quarter. Our ending inventory is now below fiscal year 2021 despite recent retailer inventory corrections and our Osprey and Curlsmith acquisitions.”
Stemming from restructuring initiatives with Project Pegasus, Helen of Troy expects to deliver $20 million in fiscal 2024 savings.
Helen of Troy’s home and outdoor segment was a bright spot during the quarter, with net sales increasing 0.5% year over year to $211.9 million and operating income growing 38.5% to $31.3 million. On the other hand, the beauty and wellness segment saw net sales fell 26.5% in the quarter to $272.7 million and operating income fell 19.4% to $22.4 million.
Along with the company’s Project Pegasus, it announced in January that it would cut its global workforce by 10%. A majority of the job cuts were completed by March 1, with the remaining expected to be completed by the end of fiscal 2024.
Looking ahead, Mininberg still anticipates a strain on the consumer, who said this is reflected in Helen of Troy’s 2024 outlook.
“We are expecting pressure in the economy, on the consumer … Consumers in discretionary categories are buying less. We expect our categories to normalize,” Mininberg said on a call with analysts Thursday. “So we don’t see a lot of positive in terms of the consumer uplift and we have not built one in, nor have we built in a recession.”
