Yahoo Finance Helen of Troy (HELE) Gains on Brand Strength & Investments
Helen of Troy Limited HELE is reaping benefits from strength in Leadership Brands. The leading consumer products player continues to make investments in key areas to continue driving growth. Management is focused on developing Project Pegasus.
Let’s delve deeper.
Leadership Brands Fuel Growth
Helen of Troy benefits from its focus on a solid Leadership Brand portfolio. Brands in this portfolio, including OXO, Hydro Flask, Vicks, Braun, Honeywell, PUR, Hot Tools, Drybar and Osprey, are positioned to enhance market share. In the third quarter of fiscal 2024, the company’s leadership brand sales inched up 1.4% year over year to $457.7 million. Management highlighted that holiday performance for its brands like Osprey, OXO and Hydro Flask remained impressive. The company’s constant investments in the most productive brands are likely to keep delivering robust results.
Focus on Strategic Initiatives
Helen of Troy is making major investments in key areas to continue driving growth. To this end, Management is focused on investing in consumer-centric innovation, digital marketing and media, new packaging, enhanced production and distribution capacity as well as direct-to-consumer channels, among others. The company is on track with the multi-year Elevate for Growth strategic plan.
Growing the company's international business is also an integral part. In fiscal 2023, HELE completed its new two million square foot state-of-the-art distribution facility in Tennessee. The company expects to create further value through strategic acquisitions in the future. Helen of Troy closed the buyout of Recipe Products Ltd. on Apr 22, 2022.
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Project Pegasus Holds Promise
Helen of Troy is focused on developing a global restructuring plan, Project Pegasus. The plan aims to expand operating margins via initiatives designed to improve efficiency and reduce costs. Project Pegasus includes efforts to optimize the company’s brand portfolio, streamline and simplify the organization, grow the cost of goods savings projects and improve the efficiency of the supply-chain network. The project aims to streamline indirect spending and improve cash flow and working capital. Project Pegasus is progressing well and is on track as the company continues executing and delivering its strategic and financial targets.
Hurdles on the Way
Helen of Troy is battling declines pressured by ongoing consumer spending pressure and uncertainties in discretionary categories. Persistent inflation and lower levels of household savings are causing people to be prudent with their money. Lower illness incidences compared with the pre-pandemic period’s levels and lower-than-anticipated holiday sales are a concern. In addition, increased annual incentive compensation, depreciation and interest expenses are causing the downside.
Concurrently, management anticipates fiscal 2024 consolidated net sales revenues in the range of $1.975-$2 billion, calling for a decline of 4.7% to 3.5%. For the fiscal 2024, non-GAAP adjusted earnings per share are envisioned in the range of $8.60-$8.85, suggesting a decline of 9-6.3%.
Helen of Troy’s well-chalked growth endeavors are likely to keep it well-positioned for growth. The Zacks Rank #3 (Hold) company’s shares have increased 27.1% in the past year against the industry’s decline of 28.2%.
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Helen of Troy Limited (HELE) : Free Stock Analysis Report
The Chefs' Warehouse, Inc. (CHEF) : Free Stock Analysis Report
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Utz Brands, Inc. (UTZ) : Free Stock Analysis Report
