Helen of Troy Limited Announces New $500 Million Share Repurchase Authorization

Rhea-AI Summary

Helen of Troy (NASDAQ: HELE) has announced a new $500 million share repurchase authorization, effective August 20, 2024, for a three-year period. This replaces the existing authorization, of which $245.3 million remained. The repurchase, representing about 43% of outstanding common stock, can be executed through various means, including open market purchases and accelerated share repurchase programs.

CEO Noel M. Geoffroy stated that this move reflects confidence in the company's strategic initiatives, brand strength, and long-term growth opportunities. Helen of Troy, with approximately 22.8 million shares outstanding as of August 20, 2024, remains committed to growth investments and reducing its net leverage ratio by fiscal year-end.

Positive

• New $500 million share repurchase authorization approved
• Repurchase represents 43% of outstanding common stock
• Company demonstrates confidence in its strategic initiatives and growth opportunities
• Business continues to generate significant cash flow
• Commitment to reducing net leverage ratio by fiscal year-end

Negative

• Potential reduction in cash available for other investments or acquisitions
• Possible impact on financial flexibility due to large repurchase amount

Insights

Financial Analyst

Helen of Troy's new $500 million share repurchase authorization is a significant financial move, representing about 43% of the company's outstanding stock. This decision signals strong confidence in the company's future prospects and financial health. The authorization's size, coupled with the existing $245.3 million remaining from the previous program, indicates substantial available capital.

The flexibility in implementation methods and the three-year timeframe suggest a strategic approach to capital allocation. This move could potentially boost earnings per share and stock price in the short term. However, investors should consider whether this capital could be better utilized for growth initiatives or acquisitions in the long run. The company's commitment to reducing its net leverage ratio by fiscal year-end while maintaining growth investments is a positive sign for financial stability.

Market Research Analyst

This share repurchase program reflects Helen of Troy's market positioning strategy. With a diverse portfolio of well-recognized brands in consumer products, the company is leveraging its strong cash flow to potentially enhance shareholder value. The timing of this announcement, amidst global economic uncertainties, could be seen as a vote of confidence in the company's resilience and market strength.

The program's flexibility allows Helen of Troy to adapt to market conditions, potentially taking advantage of stock price fluctuations. This move might also be interpreted as a signal that management views the stock as undervalued. However, investors should watch for any impact on the company's liquidity and ability to invest in growth opportunities, which are important in the competitive consumer products market.

EL PASO, Texas--(BUSINESS WIRE)-- Helen of Troy Limited (NASDAQ: HELE), designer, developer, and worldwide marketer of branded consumer home, outdoor, beauty, and wellness products, today announced that its Board of Directors has authorized the repurchase of $500 million of its outstanding common shares (“common stock” or “shares”) in keeping with its stated intention to opportunistically return to shareholders capital not otherwise deployed for core business growth or strategic acquisitions. The authorization was approved as part of the Board’s regular process of reviewing the Company’s capital allocation and existing authorization. It is effective August 20, 2024, for a period of three years and replaces Helen of Troy’s existing repurchase authorization, of which approximately $245.3 million remained at the time the new authorization was approved.

Helen of Troy may purchase shares on a discretionary basis from time to time through open market purchases, issuer tender offers, privately negotiated transactions, and accelerated share repurchase programs, or other means, including through Rule 10b5-1 trading plans. The timing and amount of any transactions will be subject to the discretion of Helen of Troy and may be based upon market conditions as well as other opportunities that Helen of Troy may have for the use or investment of its capital. The repurchase program does not require the purchase of any minimum number of shares and may be implemented, modified, suspended or discontinued in whole or in part at any time without further notice.

In total, the $500 million share repurchase authorization represents approximately 43% of the Company’s outstanding common stock, based upon the Company’s closing price on August 20, 2024. As of August 20, 2024, Helen of Troy had approximately 22.8 million shares outstanding.

Noel M. Geoffroy, Chief Executive Officer, stated: “This share repurchase authorization underscores the confidence our management team and our Board have in our strategic initiatives, the strength of our brands, and the long-term growth opportunities we have ahead of us. Our business continues to generate significant cash flow and we remain committed to our planned growth investments, to reducing our net leverage ratio by the end of the fiscal year, and to the disciplined deployment of capital to deliver long-term, sustainable value creation for our shareholders.”

About Helen of Troy Limited

Helen of Troy Limited (NASDAQ: HELE) is a leading global consumer products company offering creative products and solutions for its customers through a diversified portfolio of well-recognized and widely-trusted brands, including OXO, Hydro Flask, Osprey, Vicks, Braun, Honeywell, PUR, Hot Tools, Drybar, Curlsmith and Revlon. 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 https://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, in other filings with the SEC, and in certain other oral and written presentations. Generally, the words “anticipates”, “assumes”, “believes”, “expects”, “plans”, “may”, “will”, “might”, “would”, “should”, “seeks”, “estimates”, “project”, “predict”, “potential”, “currently”, “continue”, “intends”, “outlook”, “forecasts”, “targets”, “reflects”, “could”, and other similar words identify forward-looking statements. All statements that address operating results, events or developments that the Company expects or anticipates may occur in the future, including statements related to sales, expenses, EPS 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 only as of the date they are made and 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, 2024, 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, the geographic concentration of certain United States (“U.S.”) distribution facilities which increases its risk to disruptions that could affect the Company's ability to deliver products in a timely manner, the occurrence of cyber incidents or failure by the Company or its third-party service providers to maintain cybersecurity and the integrity of confidential internal or customer data, a cybersecurity breach, obsolescence or interruptions in the operation of the Company's central global Enterprise Resource Planning systems and other peripheral information systems, the Company's ability to develop and introduce a continuing stream of innovative new products to meet changing consumer preferences, actions taken by large customers that may adversely affect the Company's gross profit and operating results, the Company's dependence on sales to several large customers and the risks associated with any loss of, or substantial decline in, sales to top customers, the Company's dependence on third-party manufacturers, most of which are located in Asia, and any inability to obtain products from such manufacturers, the Company's ability to deliver products to its customers in a timely manner and according to their fulfillment standards, the risks associated with trade barriers, exchange controls, expropriations, and other risks associated with domestic and foreign operations including uncertainty and business interruptions resulting from political changes and events in the U.S. and abroad, and volatility in the global credit and financial markets and economy, the Company's dependence on the strength of retail economies and vulnerabilities to any prolonged economic downturn, including a downturn from the effects of macroeconomic conditions, any public health crises or similar conditions, risks associated with weather conditions, the duration and severity of the cold and flu season and other related factors, the Company's reliance on its Chief Executive Officer and a limited number of other key senior officers to operate its business, risks associated with the use of licensed trademarks from or to third parties, the Company's ability to execute and realize expected synergies from strategic business initiatives such as acquisitions, divestitures and global restructuring plans, including Project Pegasus, the risks of potential changes in laws and regulations, including environmental, employment and health and safety and tax laws, and the costs and complexities of compliance with such laws, the risks associated with increased focus and expectations on climate change and other environmental, social and governance matters, the risks associated with significant changes in or the Company's compliance with regulations, interpretations or product certification requirements, the risks associated with global legal developments regarding privacy and data security that could result in changes to its business practices, penalties, increased cost of operations, or otherwise harm the business, the risks of significant tariffs or other restrictions being placed on imports from China, Mexico or Vietnam or any retaliatory trade measures taken by China, Mexico or Vietnam, the Company's dependence on whether it is classified as a “controlled foreign corporation” for U.S. federal income tax purposes which impacts the tax treatment of its non-U.S. income, the risks associated with legislation enacted in Bermuda and Barbados in response to the European Union's review of harmful tax competition, the risks associated with accounting for tax positions and the resolution of tax disputes, the risks associated with product recalls, product liability and other claims against the Company, and associated financial risks including but not limited to, increased costs of raw materials, energy and transportation, significant impairment of the Company's goodwill, indefinite-lived and definite-lived intangible assets or other long-lived assets, risks associated with foreign currency exchange rate fluctuations, the risks to the Company's liquidity or cost of capital which may be materially adversely affected by constraints or changes in the capital and credit markets, interest rates and limitations under its financing arrangements, and projections of product demand, sales and net income, which are highly subjective in nature, and from which future sales and net income could vary by a material amount. The Company undertakes no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240905464118/en/

Investors:

Helen of Troy Limited

Anne Rakunas, Director, External Communications

(915) 225-4841



ICR, Inc.

Allison Malkin, Partner

(203) 682-8200

Source: Helen of Troy Limited

FAQ

What is the value of Helen of Troy's new share repurchase authorization?

Helen of Troy (NASDAQ: HELE) has authorized a new $500 million share repurchase program.

When does Helen of Troy's new share repurchase authorization become effective?

The new $500 million share repurchase authorization becomes effective on August 20, 2024.

How long is Helen of Troy's new share repurchase authorization valid?

The new share repurchase authorization is valid for a period of three years from August 20, 2024.

What percentage of Helen of Troy's outstanding stock does the new repurchase authorization represent?

The $500 million share repurchase authorization represents approximately 43% of Helen of Troy's outstanding common stock.

How many outstanding shares does Helen of Troy (HELE) have as of August 20, 2024?

As of August 20, 2024, Helen of Troy had approximately 22.8 million shares outstanding.