In the quarter, net sales in the Health & Wellness segment dropped by 0.4% to $227.6 million due to an organic business decline of 0.2%. In the fourth quarter of fiscal 2022, its consolidated gross profit margin declined by 2.6 percentage points to 42.6%, mainly due to cost inflation, a related spike in consumer pricing, Environmental Protection Agency (EPA) compliance costs, increased inventory obsolescence costs and an unfavorable channel mix in the Beauty segment. Helen of Troy is grappling with a soft gross margin for a while now. The inclusion of this producer of innovative prestige hair care products for all hair types is likely to boost Helen of Troy’s portfolio and fuel growth. Helen of Troy closed the buyout of Recipe Products Ltd. The company expects to create additional value through strategic acquisitions in the future. Management expects fiscal 2023 capital asset expenditures in the range of $180-$205 million, including projected expenditures associated with new distribution facility and IT systems under key Phase II projects. In its last earnings call, management highlighted that it is diversifying the geographic footprint of global sourcing across China, Southeast Asia, and Mexico. Growing the company's international business is also integral to its Phase II transformation plan. It expects to open the facility by the end of fiscal 2023. The highly automated under-construction 2-million square feet facility will significantly increase the company’s capacity. To stay focused on the plan, Helen of Troy finalized a land purchase in Gallaway, TN, to construct a state-of-the-art distribution center. Management is on track to continue to invest in key growth areas as part of its Phase II Transformation efforts. The Zacks Rank #3 (Hold) company is focused on investing in consumer-centric innovation, digital marketing and media, new packaging, enhanced production and distribution capacity and direct-to-consumer channels, among others. It acquired Drybar Products in January 2020, which marks the company's eighth Leadership Brand. In December 2021, Helen of Troy concluded the buyout of Osprey Packs, Inc, which marks the company’s ninth Leadership Brand and fuel further growth. The company's constant investments in the most productive brands have been delivering robust results. Brands in this portfolio, including OXO, Hydro Flask, Vicks, Braun, Honeywell, PUR, Hot Tools, Drybar and Osprey, are positioned to enhance market share. Helen of Troy is focused on making solid investments in its Leadership Brands, a portfolio of market-leading brands. This indicates the consolidated adjusted EPS advancement of 3.0-5.4% and the core adjusted EPS increase of 4.5-7.0%.
The company expects consolidated adjusted earnings per share (EPS) in the range of $12.73-$13.03. Organic business sales gained from the strength in brick and mortar and the online channel in the Home & Outdoor and Beauty units, mainly backed by solid demand, higher retailer orders, elevated sales to the club and closeout channels, increased consolidated international sales, elevated customer pricing and some favorable comparison with the year-ago period’s levels related to the Winter Storm.įor fiscal 2023, management anticipates consolidated net sales to be between $2.38 billion and $2.42 billion, indicating consolidated growth of 6.8-8.8% and a Core business increase of 8.5-10.5%. The upside was backed by higher organic business sales and contributions from the Osprey Packs or Osprey buyout. Consolidated net sales increased by 14.3% to $582 million. The upside in adjusted earnings can be mainly attributed to the higher adjusted operating income in the Home & Outdoor and Health & Wellness segments and reduced shares outstanding.
Image Source: Zacks Investment Research Solid Performance & Bright Viewĭuring the fiscal fourth quarter, Helen of Troy’s adjusted earnings of $2.51 per share soared 59.9%.
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