Helen of Troy Reports Decline in Financial Performance for Q2 and H1 2024

Helen of Troy Limited reported a decline in financial performance for the three and six months ended August 31, 2024, compared to the same periods in the previous fiscal year. Sales revenue for the three months was $474.2 million, down 3.5% from $491.6 million in 2023. For the six months, revenue decreased by 7.8% to $891.1 million from $966.2 million. The decline was attributed to reduced demand in the Beauty & Wellness segment, particularly for hair appliances, air purifiers, and humidifiers, alongside increased competition and lower replenishment orders from retail customers.

Gross profit for the three months ended August 31, 2024, was $216.1 million, a decrease from $229.7 million in the prior year, while gross profit for the six months fell to $419.1 million from $445.3 million. Operating income also saw a significant drop, with the three-month figure at $34.9 million, down 25.6% from $46.8 million, and the six-month operating income at $65.6 million, down 25% from $87.5 million. Net income for the three months was $17.0 million, a 37.9% decrease from $27.4 million, and for the six months, it was $23.2 million, down 53.5% from $50.0 million.

The company’s restructuring initiative, Project Pegasus, initiated in fiscal 2023, aims to enhance efficiency and reduce costs, with expected annualized pre-tax operating profit improvements of $75 million to $85 million by fiscal 2027. During the reported periods, Helen of Troy incurred $1.5 million and $3.4 million in pre-tax restructuring costs, respectively, compared to $3.6 million and $11.0 million in the same periods of the previous year.

In terms of strategic developments, the company authorized a new stock repurchase program of up to $500 million in August 2024, replacing the previous program with approximately $245.3 million remaining. The company also reported a goodwill impairment triggering event due to a sustained decline in stock price, influenced by macroeconomic factors affecting consumer confidence.

Total assets increased to $2.88 billion as of August 31, 2024, from $2.84 billion in February 2024, while total liabilities rose to $1.31 billion from $1.20 billion. Long-term debt increased to $705.4 million from $659.4 million. Cash and cash equivalents stood at $20.1 million, up from $18.5 million in February 2024. The company continues to navigate challenges posed by high inflation and interest rates, which have impacted consumer spending patterns.