For the second quarter, Helen of Troy declared itself back on the road to growth as lower revenue and income year over year still managed to surpass Wall Street estimates.
Net income was $27.4 million, or $1.14 per diluted share, as compared to $30.7 million, or $1.28 per diluted share, in the year-previous quarter. Adjusted for one-time events, the company maintained, net income was $41.8 million, or $1.74 per diluted share versus $54.7 million, or $2.27 per diluted share, in the year-before period.
Adjusted diluted earnings per share beat a Yahoo Finance-published analyst consensus estimate of $1.64 while sales topped a $485 million revenue estimate.
Net revenue in the quarter was $491.6 million versus $521.4 million in the year-earlier period, Helen of Troy reported.
The company attributed the revenue decline primarily to a $31.2 million, or 6% decline in the organic business largely due to lower sales of heaters, fans, and humidification products in Beauty & Wellness resulting from softer consumer demand, company SKU rationalization efforts, and reduced orders from retail customers as they rebalance inventory in line with softer consumer demand in specific categories. Lower brick-and-mortar sales in the insulated beverage category impacted the Home & Outdoor business. An increase in consolidated online channel sales, stronger consumer demand for travel-related products in Home & Outdoor and overall growth in Beauty and International operations partially offset the declines elsewhere.
Operating income was $46.8 million versus $46.9 million in the year-prior period, Helen of Troy noted, while adjusted operating income was $62.3 billion versus $72.3 billion.
In announcing the financial results, Julien Mininberg, Helen of Troy CEO, said, “During the quarter, we delivered net sales and adjusted EPS at the high end of our expectations. I’m pleased with the consistency of our results as we work toward returning to growth. During the quarter we achieved our revenue expectations for the majority of our leadership brands and international performance was particularly strong. We continued to support important new product launches, significantly increased gross margin and returned value to shareholders through share repurchase. Our initiatives to streamline our inventory and improve free cash flow continue to deliver big results, with inventory down over $200 million in the first half of this fiscal year versus the same period last year, and free cash flow improvement of $325 million during that same comparison period. All workstreams of our Pegasus restructuring initiatives are making good progress and we remain on track to deliver our financial goals.”
He added, “Looking ahead, I am pleased to be in a position to reiterate our full-year outlook for this fiscal year. Our year-to-date results not only demonstrate strong execution across our entire organization, but they also demonstrate resiliency as we navigate the continued challenging macro consumer environment. On the organization side, I am pleased to announce that the company and Brian Grass have reached an agreement for Brian to remain the CFO on an ongoing basis. We also look forward to introducing our next strategic plan at our Investor Day on October 17.”
