Hydro Flask Maker Helen Of Troy's FY24 Outlook Hit By Continued Pressure On Consumer Spending: Details

Helen Of Troy Ltd HELE reported a third-quarter FY24 revenue decline of 1.6% year-on-year to $549.61 million, beating the analyst consensus estimate of $543.63 million.

The decrease in sales was primarily driven by a decrease from organic business of $13.6 million, or 2.4%, due to lower sales of hair appliance, humidification and air filtration products in Beauty & Wellness driven by softer consumer demand.

Total net sales revenue for the Home & Outdoor segment grew 3.1% Y/Y, and Beauty & Wellness decreased 4.9%.

Adjusted EPS of $2.79 beat the consensus estimate of $2.75.

Gross profit margin increased 210 basis points to 48%. The operating margin expanded 570 basis points to 19.5%, and operating income for the quarter increased 38.4% to $106.9 million.

Non-GAAP adjusted EBITDA decreased 1.9% to $97.8 million, with the margin down to 17.8% compared to 17.9%.

The company held $25.2 million in cash and equivalents as of November 30, 2023. Net cash provided by operating activities for the quarter was $74.7 million, with a free cash flow of $65.6 million.

"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," said COO Noel M. Geoffroy.

Inventory was $426 million versus $536.8 million in Q3 2023. 

Helen Of Troy reaffirmed a one-time pre-tax restructuring charges of approximately $60 million - $65 million over the duration of Project Pegasus, expected to be completed during fiscal 2025.

Outlook: Helen Of Troy narrowed the FY24 revenue outlook from $1.965 billion - $2.015 billion to $1.975 billion - $2.0 billion against an estimate of $1.99 billion.

HELE narrowed the FY24 adjusted EPS outlook from $8.50 - $9.00 to $8.60 - $8.85 versus an estimate of $8.75.

It lowered FY24 adjusted EBITDA guidance from $338 million-$348 million to $330 million-$335 million.

Price Action: HELE shares are trading lower by 3.33% at $119.84 on the last check Monday.