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

Oct 08, 2019 • 09:00 am ET

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

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Presentation
Executive
Julien R. Mininberg

performance in the second quarter of fiscal 2020. This morning we reported another healthy quarter which featured a 5.7% increase in our core business sales against a very strong year-ago comparison and an increase in adjusted diluted EPS of 13.1%. Our quarterly results featured benefits from a diversified portfolio of brands, margin expansion beyond improving our mix, disciplined incremental investment spending and operating efficiency within our business units and also in our shared service platforms.

The results underscore the flywheel effect from continuing to execute the strategies underlying phase two of our transformation plan. Our sales growth was led by an online increase of approximately 25%, product innovation and growth in international sales. Online sales represented approximately 24% of our total sales in the quarter. The overall strong result for the Company featured 3.8% growth in Leadership Brands, driven by substantial growth in Housewares which more than offset the difficult comparison for the Health & Home leadership brands that grew 22.3% in the same period last year.

Beyond our Leadership Brands. We are especially pleased with the performance of our beauty appliance business, which we believe is now on pace to deliver a third consecutive year of growth behind meaningful consumer-centric innovations.

For the first half of the fiscal year, total net sales grew by 5.6%. Sales to the online channel increased by 26% to represent approximately 23% of our total fiscal year-to-date sales. This accomplishment was fueled by our incremental digital growth investments. Leadership Brand sales are up 5.5% year-to-date and adjusted diluted EPS increased by 11.7% for the first half of the fiscal year. These operating results give us fuel to further invest behind attractive opportunities for the balance of the year, while raising our revenue and EPS outlook for the full fiscal year.

As outlined during our recent Investor Day, phase two builds on the accomplishments of phase one by focusing on eight core strategic priorities. With a focus on executing our strategic -- our strategies of doubling down on international and accelerating shared service excellence, we are pleased to announce that we are adding new senior leadership internationally and in IT.

To help achieve our international growth goals for all three of the Company's segments, we are delighted that Nicolas Lanus [Phonetic] is joining Helen of Troy in the newly created role of International President. He will serve on our global leadership team and report directly to me. Nicolas will be located in Europe, focusing primarily on our business and expansion plans in EMEA and Asia Pacific. He will work with the business unit presidents and shared service leaders as he designs and implements next level capabilities in our chosen markets across categories, countries and channels.

Nicolas brings the perfect combination of international and consumer products industry experience. In his more than 20 years in the consumer products industry, he has led major businesses in EMEA, Asia Pacific and Latin America and spent significant time living and working in these regions. He has proven himself in