Helen of Troy Limited Reports Fourth Quarter Fiscal 2021 Results

Rhea-AI Summary

Helen of Troy Limited (NASDAQ: HELE) reported strong fourth-quarter results with a 15.1% increase in consolidated net sales revenue, totaling $509.4 million, despite a $15 million impact from Winter Storm Uri. Leadership Brand net sales rose 20.2%, and online sales grew 30%. GAAP diluted EPS improved to $0.90, whereas non-GAAP adjusted EPS was $1.57. For fiscal 2021, net sales rose 22.9%, with GAAP EPS increasing to $10.08. The company remains optimistic for fiscal 2022, targeting adjusted EPS growth amid ongoing challenges.

Positive

• Consolidated net sales revenue increased 15.1% to $509.4 million.
• Leadership Brand net sales grew by 20.2%.
• Online channel net sales surged approximately 30%.
• GAAP diluted EPS improved to $0.90 compared to a loss of $0.13 last year.
• Fiscal 2021 GAAP diluted EPS rose to $10.08, up from $6.02 the previous year.
• Non-GAAP adjusted EPS increased to $11.65, a 25.3% rise year-over-year.

Negative

• Non-GAAP consolidated adjusted operating income decreased by 20.5% to $42.9 million.
• Adverse impact of approximately $0.20 on non-GAAP adjusted EPS due to Winter Storm Uri.

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 February 28, 2021.

Executive Summary – Fourth Quarter of Fiscal 2021

• Consolidated net sales revenue increase of 15.1% to $509.4 million, including:
  • An adverse impact from February Winter Storm Uri of approximately $15 million, or 3.4%
  • An increase in Leadership Brand net sales of 20.2%
  • An increase in online channel net sales of approximately 30%
  • Organic business net sales growth of 12.2%
  • Core business net sales growth of 16.2%

• GAAP consolidated operating income of $24.5 million, or 4.8% of net sales, which includes a non-cash asset impairment charge of $8.5 million, compared to a GAAP operating loss of $2.7 million, or 0.6% of net sales, for the same period last year, which included acquisition-related expenses of $1.1 million, non-cash asset impairment charges of $41.0 million, and restructuring charges of $2.3 million

• Non-GAAP consolidated adjusted operating income decrease of 20.5% to $42.9 million, or 8.4% of net sales, compared to $53.9 million, or 12.2% of net sales, for the same period last year

• GAAP diluted EPS of $0.90, which includes a non-cash asset impairment charge of $0.30 per share, compared to a GAAP diluted loss per share of $0.13 for the same period last year, which included acquisition-related expenses of $0.04 per share, non-cash asset impairment charges of $1.43 per share, and restructuring charges of $0.08 per share

• Non-GAAP adjusted diluted EPS of $1.57 despite an adverse winter storm impact of approximately $0.20, compared to $1.88 for the same period last year

Executive Summary - Fiscal 2021

• Consolidated net sales revenue increase of 22.9% including:
  • An increase in Leadership Brand net sales of 25.5%
  • An increase in online channel net sales of approximately 32%
  • Organic business net sales growth of 20.3%
  • Core business net sales growth of 23.7%

• GAAP consolidated operating income of $281.5 million, or 13.4% of net sales, which includes a non-cash asset impairment charge of $8.5 million and restructuring charges of $0.4 million, compared to $178.3 million, or 10.4% of net sales, for the same period last year, which included acquisition-related expenses of $2.5 million, non-cash asset impairment charges of $41.0 million, and restructuring charges of $3.3 million

• Non-GAAP consolidated adjusted operating income increase of 24.2% to $334.4 million, or 15.9% of net sales, compared to $269.3 million, or 15.8% of net sales, for the same period last year

• GAAP diluted EPS of $10.08, which includes a non-cash asset impairment charge of $0.30 per share, restructuring charges of $0.01 per share, and a benefit from tax reform of $0.37 per share, compared to $6.02 for the same period last year, which included acquisition-related expenses of $0.10 per share, non-cash asset impairment charges of $1.44 per share, and restructuring charges of $0.12 per share

• Non-GAAP adjusted diluted EPS increase of 25.3% to $11.65, compared to $9.30 for the same period last year

• Net cash provided by operating activities growth of 15.8% to $314.1 million, compared to $271.3 million for the same period last year

• Free cash flow of $215.4 million, which includes a one-time, up-front license fee payment of $72.5 million to extend the license of Revlon's trademark for hair care appliances and tools, royalty-free for the next 100 years, compared to $253.5 million for the same period last year

• Repurchased 960,829 shares of common stock in the open market during the fiscal year for $191.6 million, at an average price of $199.42 per share

Julien R. Mininberg, Chief Executive Officer, stated: “Our fourth quarter results cap off an extraordinary year for Helen of Troy and an outstanding second year of our Phase II Transformation. I am very proud of the agility our organization demonstrated as we worked together with even more passion to address COVID-19’s unprecedented challenges to all aspects of the business. These efforts drove us past the $2 billion sales milestone, grew our market share for several key brands, and delivered outstanding operating cash flow, adjusted operating income, and adjusted EPS growth in fiscal 2021. During the year, our Leadership Brands once again led the way, now making up more than 81% of our sales and online sales grew to now represent 26% of total sales. Our strategic focus on international continued to bear fruit. The diversified nature of our portfolio provided consistency, with some categories benefiting from changed consumer behavior and some of our categories posting another year of strong growth based on the timeless power of consumer-centric innovation and outstanding execution. We were not shy about using this strength to further invest in projects intended to power our value creation flywheel, such as new product innovations for fiscal 2022 and beyond, IT, Direct-to-Consumer, expanded production and distribution capacity, and investments in much healthier inventory levels.”

“As we look to fiscal 2022, our all-weather portfolio of Leadership Brands is well suited to continue serving consumers. As COVID-19 lingers it favors our health-related brands. Other brands such as Hydro Flask, Drybar, Revlon, and HOT Tools are expected to benefit further as the post-pandemic landscape takes shape, and OXO is positioned to succeed in most environments. We have taken steps to address the uncertainties from the continued path of COVID-19 and emerging inflationary environment. We are working with our supply chain partners and have implemented cost mitigation measures to help offset expected inflation and will make pricing decisions to further address the situation as it evolves. We believe these actions will help us deliver on our Phase II average annual growth targets from our new elevated base and that adjusted EPS growth in fiscal 2022 is achievable. Our balance sheet has never been stronger, and we have ample liquidity and operational capability to fuel growth with a combination of organic expansion and acquisition. We believe our key strategic initiatives position us well to create significant additional shareholder value over the course of the remaining three years of Phase II.”

	Three Months Ended Last Day of February,

FAQ

What were Helen of Troy's Q4 2021 net sales revenue results?

Helen of Troy reported a net sales revenue of $509.4 million for Q4 2021, representing a 15.1% increase.

How did the Winter Storm Uri affect Helen of Troy's financial results?

Winter Storm Uri adversely impacted Helen of Troy's sales by approximately $15 million, or 3.4%.

What was the GAAP diluted EPS for Helen of Troy in Q4 2021?

The GAAP diluted EPS for Q4 2021 was $0.90, an improvement from a loss of $0.13 in the same period last year.

What is the fiscal outlook for Helen of Troy in 2022?

Helen of Troy anticipates adjusted EPS growth for fiscal 2022, supported by its Leadership Brands and strategic initiatives.

What drove the sales growth at Helen of Troy in fiscal 2021?

Sales growth in fiscal 2021 was driven by a 22.9% increase in consolidated net sales revenue, boosted by Leadership Brand sales growth of 25.5%.