Helen of Troy Limited (NASDAQ:HELE) Q1 2020 Earnings Conference Call Transcript

Jul 09, 2019 • 04:45 pm ET

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Helen of Troy Limited (NASDAQ:HELE) Q1 2020 Earnings Conference Call Transcript

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Presentation
Executive
Brian L. Grass

$1.59 billion to $1.62 billion which implies consolidated sales growth of 1.7% to 3.6% compared to the prior expectation of 1% to 3%. Our net sales outlook reflects an increase in Housewares net sales growth to 6% to 8% compared to our prior expectation of 4% to 6%. We are maintaining our outlook for health and home net sales growth of 2% to 3% and we are maintaining our outlook for Beauty net sales decline in the low single-digits, which includes the expectation for a third consecutive year of growth in our appliance business.

We now expect consolidated GAAP diluted EPS from continuing operations from $6.80 to $6.97 and non-GAAP adjusted diluted EPS from continuing operations in the range of $8.40 to $8.65, which excludes any asset impairment charges, restructuring charges, share-based compensation expense, and intangible asset amortization expense. Our net sales and diluted EPS outlook assume the severity of the upcoming cough-cold-flu season will be in-line with historical averages, and that June 2019 foreign currency exchange rates will remain constant for the remainder of the fiscal year.

The year-over-year comparison of adjusted diluted EPS from continuing operations is impacted by an expected increase in growth investments of 12% to 17% in fiscal 2020, compared to our prior expectation of 10% to 15%. Our diluted EPS outlook is based on estimated diluted shares outstanding of 20.3 million. The increase in adjusted diluted EPS outlook reflects our strong performance in the first quarter, partially offset by the expected impact of the new UK ORIP tax, the expected unfavorable impact from the assumption that June 2019 foreign currency exchange rates will remain constant for the rest of fiscal 2020 and the expected increase in growth investments, compared to our original outlook.

Combined, these items have an impact of approximately $0.20 per diluted share. We continue to expect adjusted EPS growth for fiscal 2020 to be concentrated in the second half of the year, due to strong performance comparison and specific events in the first half of fiscal 2019. We now expect growth in adjusted diluted EPS for the first half of fiscal 2020 of 4% to 6% year-over-year. We expect the reported GAAP effective tax rate range of 9.9% to 11.9% and an adjusted effective tax rate range of 9.1% to 10.7% for the full fiscal year 2020. The likelihood and potential impact of any fiscal 2020 acquisitions and divestitures, future asset impairment charges, future foreign currency fluctuations, further tariff increases or further share repurchases are unknown and cannot be reasonably estimated, therefore they are not included in our sales and earnings outlook.

Now I'd like to turn it back to the operator for questions.