Dive Brief:
- Helen of Troy — which owns direct-to-consumer brands including Hydro Flask, Drybar and Vicks — saw third-quarter consolidated net sales drop 10.6% YoY as retail customers reduced orders due to higher trade inventory levels, according to a company press release Thursday.
- CEO Julien Mininberg noted that while retail customers are keeping orders low as they sell down existing inventory, the company is encouraged to see trade inventory start to better align with sell-through rates.
- As part of its existing restructuring plan called Project Pegasus, Helen of Troy announced it would reduce its global workforce by about 10%. The reduction is a result of the company’s decision to centralize “certain functions under shared services,” particularly within its operations and finance divisions.
Dive Insight:
Helen of Troy’s latest earnings results reflect a decrease in discretionary spending from consumers that impacted all its product categories.
Mininberg said inventory levels were now below what they were at the end of last fiscal year, dropping from $585.8 million to $536.8 million year over year.
After acquiring outdoor backpack brand Osprey in 2021, Helen of Troy announced it acquired haircare brand Curlsmith in April 2022. As for acquisition prospects in this new year, the company is actively searching.
“On the M&A side, we are actively looking at a number of different projects. What I can tell you is that we're not really seeing the types of assets that we would like that will fit our criteria,” Jack Jancin, senior vice president of corporate business development, told analysts on a call Thursday. “We're rather picky with selecting and bringing new assets in, they need to sweeten our mix ... So at this point in time, we're continuing to look but we're not seeing anything that is getting us to lean in at least at this point in time.”
In October, Helen of Troy expressed optimism in Bed Bath & Beyond’s turnaround plan — a retailer which it supplies several product lines to, such as its kitchenware brand OXO. That said, in recent years it had been limiting its concentration with the struggling retailer, who issued a “going concern” warning on Thursday.
