Helen of Troy Limited (NASDAQ:HELE) Q2 2020 Earnings Conference Call - Final Transcript

Oct 08, 2019 • 09:00 am ET

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Helen of Troy Limited (NASDAQ:HELE) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] Our first question is from Bob Labick with CJS Securities. Please proceed.

Executive
Julien R. Mininberg

Hi, Bob.

Analyst
Robert Labick

Good morning, and congratulations on another great quarter.

Executive
Julien R. Mininberg

Thanks, Bob. Good morning to you. Thank you.

Analyst
Robert Labick

Yeah. So I wanted to start with the tariff exclusion refund, just to get a little more information. I appreciate what you've told us so far. But can you just tell us is there more to follow? It sounds like maybe there is another quarter. Can you quantify it and was it in revenue in Health & Home? Or how should we think about that hitting the P&L this quarter?

Executive
Brian L. Grass

Yeah. Bob, I appreciate the question. I think -- we believe it best not to disclose an individual tariff impact in isolation. I think, first of all, it's misleading because we have so many impacts now, the tariffs flowing through our P&L. There's the tariffs themselves; there's pricing changes we've made; there is demand impact potentially from pricing; there is sourcing changes; cost savings; RMB impact; and now tariff exclusion refunds, all flowing into the P&L and all really on different timing and cadence, and we really just think to focus on one impact would not provide a complete picture. We also -- we tried to say in the prepared remarks, believe that the -- the best use of the refunds is to invest them for the benefit of our brands and our retail partners. We expect the vast majority of the refunds to be reinvested in fiscal '20 which would make the remaining amount falling to profit insignificant.

And what we are doing is, we are -- we've raised our sales and earnings outlook twice in the tariffs environment which is not easy by the way. But we're committing to that outlook, which includes our best estimates of all the various tariff impacts. So, we don't believe that we, at this point, should be disclosing the dollar amounts given the -- all the moving parts. It would hit cost of goods sold. Basically the impact hits cost of goods sold and gross profit margin. It doesn't hit sales. It hits cost of goods sold.

Analyst
Robert Labick

Got it, and very clear. I understand. Thanks for that additional color. As it relates -- obviously, another nice quarter off a tough comp with the I think core -- or sales of 5.7%. Can you give us a sense -- and not to quantify this down to the basis point, for sure -- but, given all the moving parts with tariffs and everything else, how much of the growth is price versus volume? Or is that even a fair way to think about it? Because I think prices obviously change a little bit in this new environment.

Executive
Brian L. Grass

Yeah. I mean, there is definitely some price impacts there. I think you should recognize that the majority of where we've taken price increases, just because it's where the majority of the tariffs have come into play so far is in Health & Home.