Helen of Troy reported solid results for its fourth quarter ended February 28, 2019, with its beauty and housewares segments leading the way.
Consolidated net sales revenue in the fourth quarter decreased 0.7% to $384.8 million compared to $387.6 million in the previous fourth quarter. Core business net sales were flat, reflecting an increase in consolidated online sales, point of sale strength in brick and mortar and growth in the beauty appliance category. These factors were offset by declines in the personal care business and the health and home segment.
Income from continuing operations was $37.7 million, or $1.47 per diluted share, compared to $8.4 million, or $0.31 per diluted share in the previous fourth quarter.
By segment, housewares net sales increased 7.8%, or $9.1 million, primarily due to growth in the online channel, higher club channel sales, new product introductions and growth in international sales. These factors were partially offset by lower closeout channel sales.
Health and home net sales decreased 11.7%, primarily due to a core business decline of 10.8%. The core business decline primarily reflects the unfavorable comparison to the fourth quarter of fiscal 2018, which benefited from particularly strong cough/cold/flu incidence along with unseasonably cold fall and winter weather.
Beauty net sales increased 13.1%, or $10.5 million, primarily due to growth in the online channel, new product introductions in the retail appliance category, and an increase in international sales, partially offset by the discontinuation of certain brands and products, and a consumption decline in the personal care business.
Julien Mininberg, Helen of Troy CEO, stated, “The fourth quarter finished well ahead of our expectations. Online sales led the way, up approximately 36% year-over-year. We are also pleased to report beauty net sales were particularly strong, with hair appliances continuing to grow, and housewares grew over its high year-ago base. These factors offset lower sales in our health and home segment, which faced a tough comparison to last year’s robust cough, cold and flu season. We improved our adjusted operating margin by 30 basis points and grew adjusted diluted EPS 7.7%, even as we continued to make incremental investment behind our leadership brands and felt the impact of tariff increases and higher transportation costs. This quarter caps great fiscal 2019 results. Net sales for the full fiscal year grew 5.8%, leadership brand net sales grew 8.9%, online sales grew approximately 28%, and adjusted diluted EPS grew 11.3%.”
Mininberg continued, “Fiscal 2019 also marks the successful completion of phase one of our multi-year transformation strategy, which delivered excellent performance across a wide range of measures. We improved core sales growth by focusing on our leadership brands, made strategic acquisitions, became a more efficient operating company with strong global shared services, upgraded our organization and culture, improved inventory turns and return on invested capital, and returned capital to shareholders. Our strategic focus in phase two of our transformation is designed to drive the next five years of progress. The long-term objectives include improved organic sales growth, continued margin expansion, and strategic and effective capital deployment. We expect it will include continued investment in our leadership brands, with a focus on growing them through consumer-centric innovation, expanding them more aggressively outside the U.S. and adding new brands through acquisition. We anticipate building further shared service capability and operating efficiency, as well as attracting, retaining, unifying and training the best people. We believe phase two can deliver a bright future for Helen of Troy.”