Helen of Troy Limited Reports Third Quarter Fiscal 2021 Results
01/07/2021 - 06:45 AM
Helen of Troy Limited (NASDAQ: HELE), designer, developer and worldwide marketer of consumer brand-name housewares, health and home and beauty products, today reported results for the three-month period ended November 30, 2020.
Executive Summary – Third Quarter of Fiscal 2021
Consolidated net sales revenue increase of 34.3% , including:
An increase in Leadership Brand net sales of 33.9%
An increase in online channel net sales of approximately 34%
Organic business net sales growth of 30.3%
Core business net sales growth of 35.2%
GAAP consolidated operating income of $100.7 million , or 15.8% of net sales, compared to $79.3 million , or 16.7% of net sales, for the same period last year
Non-GAAP consolidated adjusted operating income increase of 24.0% to $111.9 million , or 17.6% of net sales, compared to $90.3 million , or 19.0% of net sales, for the same period last year
GAAP diluted EPS of $3.34 , compared to $2.71 for the same period last year
Non-GAAP adjusted diluted EPS increase of 20.5% to $3.76 , compared to $3.12 for the same period last year
Net cash provided by operating activities for the first nine months of the fiscal year of $249.7 million , compared to $101.4 million for the same period last year
Non-GAAP free cash flow for the first nine months of the fiscal year of $230.3 million , compared to $88.2 million for the same period last year
Repurchased 960,829 shares of common stock in the open market during the quarter for $191.6 million , at an average price of $199.42 per share
Julien R. Mininberg, Chief Executive Officer, stated: “Our business delivered an exceptional third quarter in what is shaping up to be another year of outstanding results for Helen of Troy. We delivered 34.3% growth in consolidated net sales behind continued momentum across each of our business segments, our Leadership Brands, the online channel, brick and mortar, organic business, core business, and international. During the quarter, adjusted EPS grew 20.5% , even as we invested in key initiatives designed to continue driving our value creation flywheel for next fiscal year and for the back half of Phase II. Year to date, we have outstanding momentum, with consolidated net sales growth of 25.6% , adjusted EPS growth of 35.4% , and growth in cash flow from operations of 146.3% to $249.7 million . We are very pleased to deliver these results and now provide full fiscal year guidance projecting that Helen of Troy will cross the $2 billion sales milestone for the first time and grow its adjusted EPS by $2.20 per share or more this year. This is tremendous progress in our second year of Phase II, and well ahead of the five-year glidepath we laid out during our May 2019 Investor Day. The strength of our execution is a testament to our exceptional associates around the world who continue to thrive as we rise together to overcome the many challenges of COVID-19, live our culture, and build for the future.”
Mr. Mininberg concluded: “We are excited to be in a position this fiscal year to use the strength of our results and balance sheet to make long-term investments needed to catch up with our rapid growth over the past several years and to invest in the building blocks and capabilities we believe will create incremental revenue and earnings growth during the rest of Phase II. We like our chosen initiatives, remain clearly focused on leveraging our diversified portfolio and expect to continue to develop additional opportunities to further supplement future earnings growth as we head into fiscal 2022.”
Three Months Ended November 30,
(in thousands)
Housewares
Health & Home
Beauty
Total
Fiscal 2020 sales revenue, net
$
183,211
$
185,810
$
105,716
$
474,737
Organic business (1)
38,836
62,887
42,072
143,795
Impact of foreign currency
353
1,461
(110
)
1,704
Acquisition (2)
—
—
17,501
17,501
Change in sales revenue, net
39,189
64,348
59,463
163,000
Fiscal 2021 sales revenue, net
$
222,400
$
250,158
$
165,179
$
637,737
Total net sales revenue growth (decline)
21.4
%
34.6
%
56.2
%
34.3
%
Organic business
21.2
%
33.8
%
39.8
%
30.3
%
Impact of foreign currency
0.2
%
0.8
%
(0.1
)%
0.4
%
Acquisition
—
%
—
%
16.6
%
3.7
%
Operating margin (GAAP)
Fiscal 2021
16.9
%
12.2
%
19.7
%
15.8
%
Fiscal 2020
23.1
%
13.1
%
11.9
%
16.7
%
Adjusted operating margin (non-GAAP)
Fiscal 2021
18.4
%
14.1
%
21.7
%
17.6
%
Fiscal 2020
24.3
%
15.5
%
16.0
%
19.0
%
Consistent with its strategy of focusing on its Leadership Brands, during the fourth quarter of fiscal 2020, the Company committed to a plan to divest certain assets within its mass channel personal care business (“Personal Care”). The assets to be divested include intangible assets, inventory and fixed assets related to the Company's mass channel liquids, powder and aerosol products under brands such as Pert, Brut, Sure and Infusium. The Company expects the divestiture to occur within fiscal 2021. Accordingly, the Company has classified the identified assets of the disposal group as held for sale. In connection with this change, the Company now defines Core as strategic business that it expects to be an ongoing part of its operations, and Non-Core as business or assets (including assets held for sale) that it expects to divest within a year of its designation as Non-Core. Organic business now refers to net sales revenue associated with product lines or brands after the first twelve months from the date the product line or brand is acquired, not including the impact that foreign currency had on reported net sales revenue.
Three Months Ended November 30,
(in thousands)
Housewares
Health & Home
Beauty
Total
Fiscal 2020 sales revenue, net
$
183,211
$
185,810
$
105,716
$
474,737
Core business (2) (3)
39,189
64,348
63,487
167,024
Non-Core business (Personal Care) (3)
—
—
(4,024
)
(4,024
)
Change in sales revenue, net
39,189
64,348
59,463
163,000
Fiscal 2021 sales revenue, net
$
222,400
$
250,158
$
165,179
$
637,737
Total net sales revenue growth (decline)
21.4
%
34.6
%
56.2
%
34.3
%
Core business
21.4
%
34.6
%
60.1
%
35.2
%
Non-Core business (Personal Care)
—
%
—
%
(3.8
)%
(0.8
)%
Consolidated Operating Results - Third Quarter Fiscal 2021 Compared to Third Quarter Fiscal 2020
Consolidated net sales revenue increased $163.0 million , or 34.3% , to $637.7 million compared to $474.7 million . The growth was driven by an Organic business increase of $143.8 million , or 30.3% , primarily reflecting growth in consolidated brick and mortar, online, and international sales. The Drybar Products acquisition also contributed $17.5 million , or 3.7% to consolidated net sales revenue growth. These factors were partially offset by reduced store traffic at certain retail brick and mortar stores, a soft back-to-school season due to COVID-19 related school closures and a decline in Non-Core business.
Consolidated gross profit margin increased 0.9 percentage points to 45.1% , compared to 44.2% . The increase was primarily due to a favorable product mix within Health & Home and the Organic Beauty business, the favorable impact of the Drybar Products acquisition, and a favorable channel mix within the Housewares segment. These factors were partially offset by higher inbound freight expense and an unfavorable product mix in the Housewares segment.
Consolidated selling, general and administrative expense (“SG&A”) ratio increased 1.8 percentage points to 29.3% , compared to 27.5% . The increase was primarily due to increased marketing expense, increased freight and distribution expense, higher royalty expense, increased legal and other professional fees, and higher bad debt expense. These factors were partially offset by the impact that higher net sales revenue had on net operating leverage, travel expense reductions due to COVID-19, and the favorable comparative impact of acquisition-related expenses for the purchase of Drybar Products incurred in the prior year period.
Consolidated operating income was $100.7 million , or 15.8% of net sales revenue, compared to $79.3 million , or 16.7% of net sales revenue. The decrease in consolidated operating margin was primarily driven by the increase in the SG&A ratio, partially offset by the increase in gross profit margin.
Income tax expense as a percentage of income before tax was 14.0% compared to 10.3% for the same period last year. The year-over-year increase in the effective tax rate is primarily due to an increase in liabilities related to uncertain tax positions.
Net income increased 22.6% to $84.2 million , compared to $68.7 million . Diluted EPS was $3.34 compared to $2.71 . Diluted EPS increased primarily due to higher operating income in the Beauty and Health & Home segments, partially offset by lower operating income in the Housewares segment and higher income tax expense.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased 24.0% to $117.0 million compared to $94.4 million .
On an adjusted basis for the third quarter of fiscal 2021 and 2020, excluding non-cash asset impairment charges, acquisition-related expenses, restructuring charges, tax reform, amortization of intangible assets, and non-cash share-based compensation, as applicable:
Adjusted operating income increased $21.6 million , or 24.0% , to $111.9 million , or 17.6% of net sales, compared to $90.3 million , or 19.0% of net sales. The 1.4 percentage point decrease in adjusted operating margin primarily reflects increased marketing expense, increased freight and distribution expense, an unfavorable product mix in the Housewares segment, higher royalty expense, increased legal and other professional fees, and higher bad debt expense. These factors were partially offset by the favorable impact that higher overall net sales revenue had on operating leverage, a favorable product mix within Health & Home and the Organic Beauty business, a favorable channel mix within the Housewares segment, and travel expense reductions due to COVID-19.
Adjusted income increased $15.7 million , or 19.8% , to $94.8 million , compared to $79.1 million for the same period last year. Adjusted diluted EPS increased 20.5% to $3.76 compared to $3.12 . The increase in adjusted diluted EPS was primarily due to higher operating income in the Beauty and Health & Home segments, partially offset by lower operating income in the Housewares segment and higher income tax expense.
Segment Operating Results - Third Quarter Fiscal 2021 Compared to Third Quarter Fiscal 2020
Housewares net sales revenue increased $39.2 million , or 21.4% , to $222.4 million , compared to $183.2 million . Growth was driven by an Organic business increase of $38.8 million , or 21.2% , primarily due to higher demand for OXO brand products as consumers spent more time at home cooking, cleaning, organizing and pantry loading in response to COVID-19, which resulted in increases in brick and mortar, online and international sales. These factors were partially offset by the COVID-19 related impact of reduced store traffic at certain retail brick and mortar stores, a soft back-to-school season due to COVID-19, lower closeout channel sales and increased competitive activity. Operating income was $37.7 million , or 16.9% of segment net sales revenue, compared to $42.3 million , or 23.1% of segment net sales revenue. The 6.2 percentage point decrease in segment operating margin was primarily due to a less favorable product mix, higher marketing expense, increased freight and distribution expense to support strong demand, higher royalty expense, and increased legal and other professional fees. These factors were partially offset by the favorable impact that higher overall net sales revenue had on operating leverage, a more favorable channel mix, and travel expense reductions due to COVID-19. Adjusted operating income decreased 8.3% to $40.9 million , or 18.4% of segment net sales revenue compared to $44.6 million , or 24.3% of segment net sales revenue.
Health & Home net sales revenue increased $64.3 million , or 34.6% , to $250.2 million , compared to $185.8 million . The increase was primarily driven by an Organic business increase of $62.9 million , or 33.8% , primarily due to strong consumer demand for healthcare and healthy living products in domestic and international markets, primarily in thermometry and air purification, in both brick and mortar and online channels, mainly attributable to COVID-19. These factors were partially offset by declines in non-strategic categories. Operating income was $30.5 million , or 12.2% of segment net sales revenue, compared to $24.4 million , or 13.1% of segment net sales revenue. The 0.9 percentage point decrease in segment operating margin was primarily due to increased marketing expense, higher performance-based annual incentive compensation expense, higher royalty expense, and the unfavorable impact of foreign currency exchange and forward contract settlements year-over-year. These factors were partially offset by the favorable impact that higher overall net sales revenue had on operating leverage and the impact of a more favorable product mix. Adjusted operating income increased 22.5% to $35.3 million , or 14.1% of segment net sales revenue, compared to $28.8 million , or 15.5% of segment net sales revenue.
Beauty net sales revenue increased $59.5 million , or 56.2% , to $165.2 million , compared to $105.7 million . The increase was driven by an Organic business increase of $42.1 million , or 39.8% , as well as the net sales revenue contribution of $17.5 million , or 16.6% growth, from the acquisition of Drybar Products. The Organic business increase primarily reflects growth in the appliance category in both online and brick and mortar channels driven by the strength of the One-Step family of products, a shift to greater and more aggressive early season retail holiday promotions during the third quarter, expanded distribution, primarily in the club channel, and an increase in international sales. These factors were partially offset by reduced store traffic at certain retail brick and mortar stores due to COVID-19 and a net sales revenue decline in Non-Core business. Operating income was $32.6 million , or 19.7% of segment net sales revenue, compared to $12.6 million , or 11.9% of segment net sales revenue. The 7.8 percentage point increase in segment operating margin was primarily due to the favorable impact that higher overall net sales revenue had on operating leverage, the margin impact of a more favorable product mix, the favorable comparative impact of acquisition-related expenses for the purchase of Drybar Products incurred in the prior year period, and travel expense reductions due to COVID-19. These factors were partially offset by higher personnel expense related to the acquisition of Drybar Products, increased marketing expense, higher performance-based annual incentive compensation expense, higher bad debt expense, and higher legal and other professional fees. Adjusted operating income increased 111.7% to $35.8 million , or 21.7% of segment net sales revenue, compared to $16.9 million , or 16.0% of segment net sales revenue.
Balance Sheet and Cash Flow Highlights - Third Quarter Fiscal 2021 Compared to Third Quarter Fiscal 2020
Cash and cash equivalents totaled $156.7 million , compared to $19.6 million .
Accounts receivable turnover was 70.0 days, compared to 68.9 days.
Inventory was $383.4 million , compared to $333.7 million . Trailing twelve-month inventory turnover was 3.6 times compared to 2.9 times.
Total short- and long-term debt was $440.4 million , compared to $244.2 million .
Net cash provided by operating activities for the first nine months of the fiscal year was $249.7 million , compared to $101.4 million .
Subsequent Event
On December 22, 2020, the Company entered into an amended and extended Trademark License Agreement with Revlon to license Revlon’s trademark for hair care appliances and tools (the “Revlon License”). The Revlon License grants the Company an exclusive, global, fully paid-up license to use the licensed trademark to manufacture, sell and distribute licensed merchandise in accordance with the terms of the agreement. The Revlon License has an initial term of 40 years, which will automatically renew at the end of the initial term for three consecutive additional 20-year periods unless the Company gives notice of non-renewal. The Revlon License amends and restates the existing Revlon trademark licensing agreements entirely, and eliminates ongoing royalties the Company has historically paid and recognized as expense within SG&A in accordance with such agreements. In exchange for this exclusive global license, the Company paid a one-time, up-front license fee of $72.5 million , which will be recorded as an intangible asset at cost and amortized on a straight-line basis over a useful life of 40 years, representing the initial term. As a result of the Revlon License, the Company is no longer obligated to pay royalties or any other fees to Revlon, and thus will not recognize these expenses after December 22, 2020, the effective date of the Revlon License.
Fiscal 2021 Annual Outlook
For fiscal 2021, the Company expects consolidated net sales revenue in the range of $2.07 5 to $2.1 billion , which implies consolidated sales growth of 21.5% to 23.0% .
The Company’s net sales outlook reflects the following expectations by segment:
Housewares net sales growth of 12.0% to 12.5% ;
Health & Home net sales growth of 27.5% to 30.0% ; and
Beauty net sales growth of 27.0% to 28.0% .
The Company expects consolidated GAAP diluted EPS of $10.29 t o $10.46 and non-GAAP adjusted diluted EPS in the range of $11.50 t o $11.70 , which excludes any asset impairment charges, restructuring charges, tax reform, share-based compensation expense and intangible asset amortization expense.
The Company’s net sales and EPS growth outlook reflects the following:
the assumption that COVID-19 related demand trends seen in the second and third quarters of fiscal 2021 continue through the fourth quarter;
the assumption that the impact of the cough/cold/flu season on the fourth quarter will be below average due to the COVID-19 impact on back to school, work from home, travel, brick and mortar shopping, and group gatherings, compared to an above average impact in the same period last year;
the more difficult comparison to the fourth quarter of fiscal 2020, which included initial COVID-19 demand surges in the Health & Home segment and an initial surge in demand for the One-Step family of products in the Beauty segment;
an estimated increase in short- and long-term growth investments of approximately 50% for the full fiscal year 2021, which falls entirely in the second half of the year due to cost reduction initiatives in place during the first half of the year;
the assumption that December 2020 foreign currency exchange rates will remain constant for the remainder of the fiscal year; and
an estimated weighted average diluted shares outstanding of 25.3 million.
The Company expects a reported GAAP effective tax rate range of 6.7% to 6.8% , and an adjusted effective tax rate range of 9.5% to 9.7% for the full fiscal year 2021. Please refer to the schedule entitled “Effective Tax Rate (GAAP) and Adjusted Effective Tax Rate (Non-GAAP)” in the accompanying tables to this press release.
The Company expects capital asset expenditures of $32 t o $35 million for the full fiscal year 2021, which includes expected initial expenditures related to a new 2 million square foot distribution facility with state of the art automation for our Housewares segment. The Company expects intangible asset expenditures of $74 t o $75 million , which includes the $72.5 million incurred in December related to the Revlon License agreement.
The likelihood and potential impact of any fiscal 2021 acquisitions and divestitures, future asset impairment charges, future foreign currency fluctuations, or further share repurchases are unknown and cannot be reasonably estimated; therefore, they are not included in the Company’s sales and earnings outlook.
Conference Call and Webcast
The Company will conduct a teleconference in conjunction with today’s earnings release. The teleconference begins at 9:00 a.m. Eastern Time today, Thursday, January 7, 2021. Investors and analysts interested in participating in the call are invited to dial (877) 407-3982 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at: http://investor.helenoftroy.com . A telephone replay of this call will be available at 12:00 p.m. Eastern Time on January 7, 2021 until 11:59 p.m. Eastern Time on January 14, 2021 and can be accessed by dialing (844) 512-2921 and entering replay pin number 13714008. A replay of the webcast will remain available on the website for one year.
Non-GAAP Financial Measures
The Company reports and discusses its operating results using financial measures consistent with accounting principles generally accepted in the United States of America (“GAAP”). To supplement its presentation, the Company discloses certain financial measures that may be considered non-GAAP such as adjusted operating income, adjusted operating margin, adjusted effective tax rate, adjusted income, adjusted diluted earnings per share (“EPS”), Core and Non-Core adjusted diluted EPS, EBITDA, adjusted EBITDA, and free cash flow, which are presented in accompanying tables to this press release along with a reconciliation of these financial measures to their corresponding GAAP-based measures presented in the Company’s condensed consolidated statements of income and cash flows. For additional information see Note 9 to the accompanying tables to this Press Release.
About Helen of Troy Limited
Helen of Troy Limited (NASDAQ: HELE) is a leading global consumer products company offering creative solutions for its customers through a strong portfolio of well-recognized and widely-trusted brands, including OXO, Hydro Flask, Vicks, Braun, Honeywell, PUR, Hot Tools and Drybar. We sometimes refer to these brands as our Leadership Brands. All trademarks herein belong to Helen of Troy Limited (or its subsidiaries) and/or are used under license from their respective licensors.
For more information about Helen of Troy, please visit http://investor.helenoftroy.com
Forward Looking Statements
Certain written and oral statements made by the Company and subsidiaries of the Company may constitute “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. This includes statements made in this press release. Generally, the words “anticipates”, “believes”, “expects”, “plans”, “may”, “will”, “should”, “seeks”, “estimates”, “project”, “predict”, “potential”, “continue”, “intends”, and other similar words identify forward-looking statements. All statements that address operating results, events or developments that the Company expects or anticipates will occur in the future, including statements related to sales, earnings per share results, and statements expressing general expectations about future operating results, are forward-looking statements and are based upon its current expectations and various assumptions. The Company believes there is a reasonable basis for these expectations and assumptions, but there can be no assurance that the Company will realize these expectations or that these assumptions will prove correct. Forward-looking statements are subject to risks that could cause them to differ materially from actual results. Accordingly, the Company cautions readers not to place undue reliance on forward-looking statements. The forward-looking statements contained in this press release should be read in conjunction with, and are subject to and qualified by, the risks described in the Company’s Form 10-K for the year ended February 29, 2020, and in the Company's other filings with the SEC. Investors are urged to refer to the risk factors referred to above for a description of these risks. Such risks include, among others, our ability to successfully manage the demand, supply and operational challenges associated with the actual or perceived effects of COVID-19 and any similar future public health crisis, pandemic or epidemic, our ability to deliver products to our customers in a timely manner and according to their fulfillment standards, the costs of complying with the business demands and requirements of large sophisticated customers, our dependence on the strength of retail economies and vulnerabilities to any prolonged economic downturn, including from the effects of COVID-19, our relationships with key customers and licensors, our dependence on sales to several large customers and the risks associated with any loss or substantial decline in sales to top customers, expectations regarding recent, pending and future acquisitions or divestitures, including our ability to realize anticipated cost savings, synergies and other benefits along with our ability to effectively integrate acquired businesses or separate divested businesses, circumstances which may contribute to future impairment of goodwill, intangible or other long-lived assets, the retention and recruitment of key personnel, the costs, complexity and challenges of upgrading and managing our global information systems, the risks associated with cybersecurity and information security breaches, the risks associated with global legal developments regarding privacy and data security could result in changes to our business practices, penalties, increased cost of operations, or otherwise harm our business, risks associated with foreign currency exchange rate fluctuations, the risks associated with accounting for tax positions, tax audits and related disputes with taxing authorities, the risks of potential changes in laws in the U.S. or abroad, including tax laws, regulations or treaties, employment and health insurance laws and regulations, laws relating to environmental policy, personal data, financial regulation, transportation policy and infrastructure policy along with the costs and complexities of compliance with such laws, our ability to continue to avoid classification as a controlled foreign corporation, the risks of new legislation enacted in Bermuda and Barbados in response to the European Union’s review of harmful tax competition, risks associated with weather conditions, the duration and severity of the cold and flu season and other related factors, our dependence on foreign sources of supply and foreign manufacturing, and associated operational risks including, but not limited to, long lead times, consistent local labor availability and capacity, and timely availability of sufficient shipping carrier capacity, the impact of changing costs of raw materials, labor and energy on cost of goods sold and certain operating expenses, the risks associated with significant tariffs or other restrictions on imports from China or any retaliatory trade measures taken by China, the risks associated with the geographic concentration and peak season capacity of certain U.S. distribution facilities, our projections of product demand, sales and net income are highly subjective in nature and future sales and net income could vary in a material amount from such projections, the risks associated with the use of trademarks licensed from and to third parties, our ability to develop and introduce a continuing stream of new products to meet changing consumer preferences, trade barriers, exchange controls, expropriations, and other risks associated with U.S. and foreign operations, the risks to our liquidity as a result of changes to capital market conditions and other constraints or events that impose constraints on our cash resources and ability to operate our business, the risks associated with product recalls, product liability, other claims, and related litigation against us and the risks associated with changes in regulations or product certifications.
HELEN OF TROY LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited) (in thousands, except per share data)
Three Months Ended November 30,
2020
2019
Sales revenue, net
$
637,737
100.0
%
$
474,737
100.0
%
Cost of goods sold
350,410
54.9
%
264,764
55.8
%
Gross profit
287,327
45.1
%
209,973
44.2
%
Selling, general and administrative expense (“SG&A”)
186,630
29.3
%
130,692
27.5
%
Restructuring charges
(12
)
—
%
12
—
%
Operating income
100,709
15.8
%
79,269
16.7
%
Non-operating income, net
93
—
%
92
—
%
Interest expense
(2,926
)
(0.5
)%
(2,767
)
(0.6
)%
Income before income tax
97,876
15.3
%
76,594
16.1
%
Income tax expense
13,721
2.2
%
7,895
1.7
%
Net income
$
84,155
13.2
%
$
68,699
14.5
%
Diluted earnings per share (“EPS”)
$
3.34
$
2.71
Weighted average shares of common stock used in computing diluted EPS
25,192
25,396
Nine Months Ended November 30,
2020
2019
Sales revenue, net
$
1,589,424
100.0
%
$
1,265,067
100.0
%
Cost of goods sold
892,460
56.1
%
723,216
57.2
%
Gross profit
696,964
43.9
%
541,851
42.8
%
SG&A
439,646
27.7
%
359,794
28.4
%
Restructuring charges
355
—
%
1,061
0.1
%
Operating income
256,963
16.2
%
180,996
14.3
%
Non-operating income, net
440
—
%
313
—
%
Interest expense
(9,568
)
(0.6
)%
(9,291
)
(0.7
)%
Income before income tax
247,835
15.6
%
172,018
13.6
%
Income tax expense
16,061
1.0
%
16,530
1.3
%
Net income
$
231,774
14.6
%
$
155,488
12.3
%
Diluted EPS
$
9.14
$
6.15
Weighted average shares of common stock used in computing diluted EPS
25,350
25,295
Condensed Consolidated Statements of Income and Reconciliation of Non-GAAP Financial Measures – Adjusted Operating Income, Adjusted Income and Adjusted Diluted EPS (2) (9)
(Unaudited) (in thousands, except per share data)
Three Months Ended November 30, 2020
As Reported
(GAAP)
Adjustments
Adjusted
(Non-GAAP)
Sales revenue, net
$
637,737
100.0
%
$
—
$
637,737
100.0
%
Cost of goods sold
350,410
54.9
%
—
350,410
54.9
%
Gross profit
287,327
45.1
%
—
287,327
45.1
%
SG&A
186,630
29.3
%
(4,501
)
(4)
175,390
27.5
%
(6,739
)
(5)
Restructuring charges
(12
)
—
%
12
(6)
—
—
%
Operating income
100,709
15.8
%
11,228
111,937
17.6
%
Non-operating income, net
93
—
%
—
93
—
%
Interest expense
(2,926
)
(0.5
)%
—
(2,926
)
(0.5
)%
Income before income tax
97,876
15.3
%
11,228
109,104
17.1
%
Income tax expense
13,721
2.2
%
607
14,328
2.2
%
Net income
$
84,155
13.2
%
$
10,621
$
94,776
14.9
%
Diluted EPS
$
3.34
$
0.42
$
3.76
Weighted average shares of common stock used in computing diluted EPS
25,192
25,192
Three Months Ended November 30, 2019
As Reported
(GAAP)
Adjustments
Adjusted
(Non-GAAP)
Sales revenue, net
$
474,737
100.0
%
$
—
$
474,737
100.0
%
Cost of goods sold
264,764
55.8
%
—
264,764
55.8
%
Gross profit
209,973
44.2
%
—
209,973
44.2
%
SG&A
130,692
27.5
%
(4,790
)
(4)
119,669
25.2
%
(4,758
)
(5)
(1,475
)
(7)
Restructuring charges
12
—
%
(12
)
(6)
—
—
%
Operating income
79,269
16.7
%
11,035
90,304
19.0
%
Non-operating income, net
92
—
%
—
92
—
%
Interest expense
(2,767
)
(0.6
)%
—
(2,767
)
(0.6
)%
Income before income tax
76,594
16.1
%
11,035
87,629
18.5
%
Income tax expense
7,895
1.7
%
617
8,512
1.8
%
Net income
$
68,699
14.5
%
$
10,418
$
79,117
16.7
%
Diluted EPS
$
2.71
$
0.41
$
3.12
Weighted average shares of common stock used in computing diluted EPS
25,396
25,396
Condensed Consolidated Statements of Income and Reconciliation of Non-GAAP Financial Measures – Adjusted Operating Income, Adjusted Income and Adjusted Diluted EPS (2) (9)
(Unaudited) (in thousands, except per share data)
Nine Months Ended November 30, 2020
As Reported
(GAAP)
Adjustments
Adjusted
(Non-GAAP)
Sales revenue, net
$
1,589,424
100.0
%
$
—
$
1,589,424
100.0
%
Cost of goods sold
892,460
56.1
%
—
892,460
56.1
%
Gross profit
696,964
43.9
%
—
696,964
43.9
%
SG&A
439,646
27.7
%
(13,527
)
(4)
405,465
25.5
%
(20,654
)
(5)
Restructuring charges
355
—
%
(355
)
(6)
—
—
%
Operating income
256,963
16.2
%
34,536
291,499
18.3
%
Non-operating income, net
440
—
%
—
440
—
%
Interest expense
(9,568
)
(0.6
)%
—
(9,568
)
(0.6
)%
Income before income tax
247,835
15.6
%
34,536
282,371
17.8
%
Income tax expense
16,061
1.0
%
11,416
27,477
1.7
%
Net income
$
231,774
14.6
%
$
23,120
$
254,894
16.0
%
Diluted EPS
$
9.14
$
0.91
$
10.05
Weighted average shares of common stock used in computing diluted EPS
25,350
25,350
Nine Months Ended November 30, 2019
As Reported
(GAAP)
Adjustments
Adjusted
(Non-GAAP)
Sales revenue, net
$
1,265,067
100.0
%
$
—
$
1,265,067
100.0
%
Cost of goods sold
723,216
57.2
%
—
723,216
57.2
%
Gross profit
541,851
42.8
%
—
541,851
42.8
%
SG&A
359,794
28.4
%
(13,129
)
(4)
326,447
25.8
%
(18,743
)
(5)
(1,475
)
(7)
Restructuring charges
1,061
0.1
%
(1,061
)
(6)
—
—
%
Operating income
180,996
14.3
%
34,408
215,404
17.0
%
Non-operating income, net
313
—
%
—
313
—
%
Interest expense
(9,291
)
(0.7
)%
—
(9,291
)
(0.7
)%
Income before income tax
172,018
13.6
%
34,408
206,426
16.3
%
Income tax expense
16,530
1.3
%
2,145
18,675
1.5
%
Net income
$
155,488
12.3
%
$
32,263
$
187,751
14.8
%
Diluted EPS
$
6.15
$
1.28
$
7.42
Weighted average shares of common stock used in computing diluted EPS
25,295
25,295
Consolidated and Segment Net Sales Revenue
(Unaudited) (in thousands)
Three Months Ended November 30,
Housewares
Health & Home
Beauty
Total
Fiscal 2020 sales revenue, net
$
183,211
$
185,810
$
105,716
$
474,737
Organic business (1)
38,836
62,887
42,072
143,795
Impact of foreign currency
353
1,461
(110
)
1,704
Acquisition (2)
—
—
17,501
17,501
Change in sales revenue, net
39,189
64,348
59,463
163,000
Fiscal 2021 sales revenue, net
$
222,400
$
250,158
$
165,179
$
637,737
Total net sales revenue growth (decline)
21.4
%
34.6
%
56.2
%
34.3
%
Organic business
21.2
%
33.8
%
39.8
%
30.3
%
Impact of foreign currency
0.2
%
0.8
%
(0.1
)%
0.4
%
Acquisition
—
%
—
%
16.6
%
3.7
%
Nine Months Ended November 30,
Housewares
Health & Home
Beauty
Total
Fiscal 2020 sales revenue, net
$
496,017
$
499,543
$
269,507
$
1,265,067
Organic business (1)
68,803
162,138
60,946
291,887
Impact of foreign currency
71
(113
)
(3,121
)
(3,163
)
Acquisition (2)
—
—
35,633
35,633
Change in sales revenue, net
68,874
162,025
93,458
324,357
Fiscal 2021 sales revenue, net
$
564,891
$
661,568
$
362,965
$
1,589,424
Total net sales revenue growth (decline)
13.9
%
32.4
%
34.7
%
25.6
%
Organic business
13.9
%
32.5
%
22.6
%
23.1
%
Impact of foreign currency
—
%
—
%
(1.2
)%
(0.3
)%
Acquisition
—
%
—
%
13.2
%
2.8
%
Leadership Brand and Other Net Sales Revenue (2)
(Unaudited) (in thousands)
Three Months Ended November 30,
2020
2019
$ Change
% Change
Leadership Brand sales revenue, net (8)
$
508,210
$
379,604
$
128,606
33.9
%
All other sales revenue, net
129,527
95,133
34,394
36.2
%
Total sales revenue, net
$
637,737
$
474,737
$
163,000
34.3
%
Nine Months Ended November 30,
2020
2019
$ Change
% Change
Leadership Brand sales revenue, net (8)
$
1,288,614
$
1,012,346
$
276,268
27.3
%
All other sales revenue, net
300,810
252,721
48,089
19.0
%
Total sales revenue, net
$
1,589,424
$
1,265,067
$
324,357
25.6
%
Consolidated and Segment Net Sales from Core and Non-Core Business (3)
(Unaudited) (in thousands)
Three Months Ended November 30,
Housewares
Health & Home
Beauty
Total
Fiscal 2020 sales revenue, net
$
183,211
$
185,810
$
105,716
$
474,737
Core business
39,189
64,348
63,487
167,024
Non-Core business (Personal Care)
—
—
(4,024
)
(4,024
)
Change in sales revenue, net
39,189
64,348
59,463
163,000
Fiscal 2021 sales revenue, net
$
222,400
$
250,158
$
165,179
$
637,737
Total net sales revenue growth (decline)
21.4
%
34.6
%
56.2
%
34.3
%
Core business
21.4
%
34.6
%
60.1
%
35.2
%
Non-Core business (Personal Care)
—
%
—
%
(3.8
)%
(0.8
)%
Nine Months Ended November 30,
Housewares
Health & Home
Beauty
Total
Fiscal 2020 sales revenue, net
$
496,017
$
499,543
$
269,507
$
1,265,067
Core business
68,874
162,025
102,642
333,541
Non-Core business (Personal Care)
—
—
(9,184
)
(9,184
)
Change in sales revenue, net
68,874
162,025
93,458
324,357
Fiscal 2021 sales revenue, net
$
564,891
$
661,568
$
362,965
$
1,589,424
Total net sales revenue growth (decline)
13.9
%
32.4
%
34.7
%
25.6
%
Core business
13.9
%
32.4
%
38.1
%
26.4
%
Non-Core business (Personal Care)
—
%
—
%
(3.4
)%
(0.7
)%
SELECTED OTHER DATA
Reconciliation of Non-GAAP Financial Measures – GAAP Operating Income
to Adjusted Operating Income (Non-GAAP) (9)
(Unaudited) (in thousands)
Three Months Ended November 30, 2020
Housewares
Health & Home
Beauty
Total
Operating income, as reported (GAAP)
$
37,658
16.9
%
$
30,478
12.2
%
$
32,573
19.7
%
$
100,709
15.8
%
Restructuring charges
(12
)
—
%
—
—
%
—
—
%
(12
)
—
%
Subtotal
37,646
16.9
%
30,478
12.2
%
32,573
19.7
%
100,697
15.8
%
Amortization of intangible assets
523
0.2
%
2,454
1.0
%
1,524
1.0
%
4,501
0.7
%
Non-cash share-based compensation
2,712
1.2
%
2,359
0.9
%
1,668
1.0
%
6,739
1.1
%
Adjusted operating income (non-GAAP)
$
40,881
18.4
%
$
35,291
14.1
%
$
35,765
21.7
%
$
111,937
17.6
%
Three Months Ended November 30, 2019
Housewares
Health & Home
Beauty
Total
Operating income, as reported (GAAP)
$
42,272
23.1
%
$
24,372
13.1
%
$
12,625
11.9
%
$
79,269
16.7
%
Acquisition-related expenses (7)
—
—
%
—
—
%
1,475
1.4
%
1,475
0.3
%
Restructuring charges
—
—
%
—
—
%
12
—
%
12
—
%
Subtotal
42,272
23.1
%
24,372
13.1
%
14,112
13.3
%
80,756
17.0
%
Amortization of intangible assets
815
0.4
%
2,492
1.3
%
1,483
1.4
%
4,790
1.0
%
Non-cash share-based compensation
1,510
0.8
%
1,946
1.0
%
1,302
1.2
%
4,758
1.0
%
Adjusted operating income (non-GAAP)
$
44,597
24.3
%
$
28,810
15.5
%
$
16,897
16.0
%
$
90,304
19.0
%
Nine Months Ended November 30, 2020
Housewares
Health & Home
Beauty
Total
Operating income, as reported (GAAP)
$
106,294
18.8
%
$
95,782
14.5
%
$
54,887
15.1
%
$
256,963
16.2
%
Restructuring charges
251
—
%
—
—
%
104
—
%
355
—
%
Subtotal
106,545
18.9
%
95,782
14.5
%
54,991
15.2
%
257,318
16.2
%
Amortization of intangible assets
1,541
0.3
%
7,415
1.1
%
4,571
1.3
%
13,527
0.9
%
Non-cash share-based compensation
8,024
1.4
%
7,166
1.1
%
5,464
1.5
%
20,654
1.3
%
Adjusted operating income (non-GAAP)
$
116,110
20.6
%
$
110,363
16.7
%
$
65,026
17.9
%
$
291,499
18.3
%
Nine Months Ended November 30, 2019
Housewares
Health & Home
Beauty
Total
Operating income, as reported (GAAP)
$
109,170
22.0
%
$
51,836
10.4
%
$
19,990
7.4
%
$
180,996
14.3
%
Acquisition-related expenses (7)
—
—
%
—
—
%
1,475
0.5
%
1,475
0.1
%
Restructuring charges
90
—
%
—
—
%
971
0.4
%
1,061
0.1
%
Subtotal
109,260
22.0
%
51,836
10.4
%
22,436
8.3
%
183,532
14.5
%
Amortization of intangible assets
1,512
0.3
%
8,088
1.6
%
3,529
1.3
%
13,129
1.0
%
Non-cash share-based compensation
5,853
1.2
HELE Rankings
#1866 Ranked by Stock Gains
HELE Stock Data
Industry
Audio and Video Equipment Manufacturing
Sector
Manufacturing
Tags
Consumer Durables, Electronics/Appliances, Manufacturing, Audio and Video Equipment Manufacturing
About HELE
helen of troy limited (nasdaq: hele) has established a leadership position in the consumer products market through new product innovation, superior product quality and competitive pricing. helen of troy designs, produces, and markets brand-name personal care electrical products.
