Helen of Troy reported strong results for the fourth quarter ended February 29, 2020, and noted that health-related appliances as well as kitchen and cooking oriented products were robust in the quarter as the coronavirus pandemic took hold.
Consolidated net sales revenue increased 14.9% to $442.4 million compared to $384.8 million, driven by an organic business increase of $51.7 million, or 13.4%, and growth from the acquisition of Drybar Products of $6 million. The organic business increase primarily reflects growth in both online and brick and mortar appliance sales in the beauty segment, higher sales across core channels in the housewares segment, and increased demand driven growth in the health and home segment, particularly in thermometry, related to higher pediatric fever and the impact of COVID-19 late in the quarter.
Loss from continuing operations was $3.2 million, or $0.13 per diluted share, compared to income from continuing operations of $37.7 million, or $1.47 per diluted share. Fiscal 2020 includes after-tax non-cash asset impairment charges, restructuring charges, and acquisition-related expenses totaling $1.55 per share, compared to a total of $0.04 per share in after-tax restructuring charges in the same period last year.
By segment, housewares net sales increased 15%, or $18.9 million, primarily due to point of sale growth with existing domestic brick and mortar customers, an increase in online sales, and revenue from new product introductions. These factors were partially offset by lower club channel sales, a decline in international sales, and lower closeout channel sales.
Health and home division net sales increased 10.5%, primarily due to new product introductions and increased demand, particularly in thermometry, related to higher pediatric fever and the impact of COVID-19 toward the end of the fourth quarter. This trend continued into the beginning of fiscal 2021 and became more pronounced in other product categories such as humidification, water purification and air purification. Additionally, at the beginning of fiscal 2021, the company began to experience favorable demand trends for Oxo products within the housewares segment as consumers engage in pantry stocking, cleaning, nesting and cooking at home.
Beauty division net sales increased 23.1%, or $20.9 million, primarily due to an organic business increase of 16.1% and 6.7% of growth from the acquisition of Drybar Products. The organic business increase primarily reflects growth in both online and brick and mortar channel sales in the appliance category. These factors were partially offset by a decline in personal care.
Consistent with its strategy of focusing its resources on its leadership brands, during the fourth quarter of fiscal 2020, the company committed to a plan to divest certain assets within its mass market personal care business and recorded an after-tax non-cash asset impairment charge of $36.4 million related to its goodwill and intangible assets. The assets to be divested include intangible assets, inventory and fixed assets related to the company’s mass channel liquids, powder and aerosol products under brands such as Pert, Brut, Sure and Infusium. The company expects the divestiture to occur within fiscal 2021. Accordingly, the company has classified the assets of the disposal group as held for sale.
Julien Mininberg, CEO, Helen of Troy, said, “The fourth quarter was extremely strong, capping the best year in Helen of Troy’s history by almost any measure. For the quarter, we delivered net sales growth of 14.9%. Our leadership brands led the way, growing 15.7%, and we continued to make major gains online, growing that channel 39% to now represent 24% of total sales. All three of our business segments grew double digit in the quarter.”
Mininberg added, “As we look to the future, we are seeing positive sales trends in key Helen of Troy brands after the initial shock of lock down in early March. Our Braun, Vicks, Pur and Honeywell products are supporting consumer health at a time of extreme need, and our Oxo products are providing convenience, comfort and solutions as families spend unprecedented amounts of time at home. We are working around the clock to meet as much of the ongoing demand for thermometers, humidifiers, air purifiers and water purifiers as possible. We are also working with suppliers and retailers to provide consumers with Oxo kitchen, cleaning and storage products, as well as volumizers in beauty, where demand is high in channels that are open. While encouraging, we do expect to see a net adverse impact to our results for the first quarter and full year fiscal 2021. Although still very early, we are making plans to continue selectively investing in the key phase two initiatives once the economic situation allows. With our diversified portfolio of leading, trusted brands, a strong balance sheet with low net leverage, and a corporate culture driven to rise to the challenge, we believe Helen of Troy is well positioned to navigate the current unprecedented situation and emerge strong.”