Helen of Troy financial results for its third quarter beat Wall Street as net income advanced year over year as the company prepares for the March 1, 2024 retirement of CEO Julien Mininberg.
Net income was $75.9 million, or $3.19 per diluted share, versus $51.8 million, versus $2.15 per diluted share, in the year-previous quarter. Adjusted for one-time events, net income was $66.4 million, or $2.79 per diluted share, versus $66.3 million, or $2.75 per diluted share in the year-before period.
An analyst consensus estimate published by Yahoo Finance called for adjusted diluted earnings per share of $2.75 and revenues of $543.6 million.
Sales were $549.6 million versus $558.6 million in the year-earlier quarter, the company reported. Operating income was $106.9 million versus $77.2 million in the year-prior period, while adjusted operating income was $89.8 million versus $92.7 million.
Home and Outdoor net sales revenue increased 3.1%, to $235.9 million in the quarter year over year, Helen of Troy stated, with the increase driven by growth from organic business of $4.5 million, or 2%, primarily because of higher home category sales in the club, online and brick-and-mortar channels attributed by the company to strong consumer demand and expanded distribution. In addition, insulated beverageware grew in the online channel, primarily driven by expanded distribution and replenishment of a new travel tumbler, higher travel-related sales in the outdoor category and higher sales in the closeout channel. The gains were partially offset by reduced sales to Bed Bath & Beyond as a result of its bankruptcy, a decline in brick-and-mortar sales in the insulated beverageware category and lower home category sales in the closeout channel. Segment operating income advanced to $49.5 million versus $30.8 million year over year, while adjusted operating income came in at $39.8 million versus $39.9 million.
Beauty and Wellness net sales revenue slipped 16% to $313.7 million year over year, Helen of Troy noted. A decrease from organic business of $18.1 million because of lower sales of hair appliances drove the decrease along with a decline in humidification, reflecting a slow start to the cough/cold/flu season and lower sales of air filtration products and fans, primarily driven by softer consumer demand and SKU rationalization efforts, according to the company. Growth in thermometry, an increase in sales of heaters and water filtration products and a gain in sales of prestige hair care products partially offset the decrease. Segment operating income advanced to $57.4 million from $46.3 million year over year, while adjusted operating income came in at $50.1 million versus $52.8 million.
Noel Geoffroy, Helen of Troy COO and incoming CEO, said in announcing the financial results, “I am pleased to report third-quarter consolidated net sales and adjusted EPS that were slightly better than our expectation. During the quarter, we further expanded our gross margin by over 200 basis points, controlled expenses while still investing in our strategic initiatives, and built on the strong cash flow generation we have been delivering over the past five quarters with a further $66 million of free cash flow. This is a solid outcome in what continues to be a challenging macro-consumer environment. We are pleased to be in a position to end the fiscal year within the ranges of our original full-year outlook for net sales, adjusted EPS and free cash flow. I believe this is a testament to the initiatives we have chosen, the talent and dedication of our global associates, and the strength of our brand portfolio. Looking longer term, we are energized and motivated as we enter the Elevate for Growth Era.”
Mininberg said, “I am proud of the company’s transformation over the past decade and the significant value it created for all stakeholders. We transformed Helen of Troy from a holding company into a unified global operating company with an outstanding portfolio of market-leading brands. We also created a highly capable global organization that is powered by a culture that makes the company an employer of choice.”
