Helen of Troy Limited

Q1 2022 Earnings Conference Call


spk_0: the didn't and welcome to the helen of troy first quarter twenty twenty two earnings call at this time operatives depends on a list and only mode a question and answer session will follow the formal presentation but he wants require operator systems during the conference clean fresh start zero on your telecom keep it as a reminder this conference it being recorded and it now my pleasure to introduce jackass and senior vice president corporate business development thank you you may maybe get a collaborator the morning everyone and welcome to help ensure the first quarter a school twenty two and op is call the agenda to because morning to his hours i'll begin with a greek this kushner forward looking statements he could you remember the company feel or comment on financial performance of the color in specific progress on earth feed you can they should it it's men he's a blinder as a company cfl and that offered a company thing vice president of the finance or you the financial be more detail in comment on the company gamut of is one kid oh yes mister meaning birth mr grass in your albert the big questions you got for us today is kaput call make a game certain bournemouth and stating that debate a management turn expectation with respect the future a bench or financial performance generally the word anticipate a leaves expect in other words similar i work began to find born looking statements for looking statements or sexual number of risks and uncertainties a can cause eighty results to differ materially phone app for adults his kaput caught me off to include information that may be considered non get financial information not get measures are not an alternative to get any information and a be calculated differently than the non yeah financial information disclosed by of accomplishment the company car and are not the place undue reliance on board but his statement when i gather information before entering the call of reduce the number i would like come from all interested parties that a copy of earnings release has been could it be better relations betting on the company the website at www dot helen of troy dot com you're usually complete table that reconcile non gap mention that is to their corresponding death a measures to release can be obtained by selecting events relations the company home page and then the press releases that i will now from copper tolerant and the number thank you jack good morning everyone to thank you for joining us we have a lot of area to cover this morning if we're talking about the excellent quarter the many strength across the desert and the outlook for the full fiscal year that we introduce today i would like to update you on the a p a manner in our press release i will finish my remarks with them important updates about our organization bp a real concerned that packaging claims on certain products in our us water and air filtration lines and limited subset of our humidifier products are not in compliance with the eat the a strict interpretation of specific regulations we have already address their concerns on the water filtration products by making modest changes to our packaging and i begin shipping are fewer products we strongly believe we can like like address to eat be a concern on air and humid of occasion packaging after which will work as quickly as operationally possible to restart shipments on those as well is important to emphasize that the a p i had not read any concerns on product quality safety or performance these are outstanding product that absurd consumers well over several decades with plenty of first break innovation along the way help and bone sales were not in fact in first quarter but we expect a significant headway in the second quarter why we resolve the remaining concerns on the packaging for the air products and the affected humidifiers and the talk shit we have been working closely with the be a continue to emphasize be are people are working around the clock to minimize the impact consumers retailers and into our business now turning to the first quarter because results that we discussed the last reported in april and we're seeing of as very strong first quarter taking shape and results reported today where even stronger than we expected the twenty eight point six percent fail group and thirty seven point five percent growth in adjusted earnings per share the failed growth broad based the beauty and house where leading the way as we openings drug store traffic and our brains continued to distinguish themselves with consumers elton home also blue surpassing passing the very large covered related first quarter base laid down a year ago our strategy to double down on international continued to bear fruit and prior flywheel investments growing failed even faster than the fleet average in the cooler the outstanding earnings per share growth was driven primarily by very strong sales it was more than enough to offset a return to more normalized spending and the headwinds from widespread inflation affecting nearly all input costs including materials labor and transportation operating margin expanded in a cooler further benefiting from the resurgence of are too high as margin brands dry bar and hydro flask the quarter also demonstrated the importance of our leadership brands and are on the channel capabilities leadership ran failed grew by approximately twenty three percent and revlon which is our largest up and coming non leadership brand new even faster our ability to win across channels was once again on display as consumers coming out of lockdown rebalance between brick and mortar and online he will buy pent up demand and stimulus money consumers are returning to stores as restrictions lift our brick and mortar sales increase significantly compared to the same period last year and a majority of doors and salons were close and mortars resurgence in the quarter made it a higher than usual percentage of our sales next or online sales growth not rated as expected increasing approximately four percent representing approximately twenty two percent of consolidated sales a way of comparison online sales in the first quarter of last year grew thirty three percent and represented approximately twenty eight percent to validate revenue which notably will double the average for the total us ecommerce
spk_1: industry
spk_0: with even greater comfort and convenience of online shopping many consumers experienced in the lockdown era likely be to remain sticky for years to come we continue to invest in online capability and in direct to consumer as important growth channels on the capital side we can feed the take steps intended to drive long term value for shareholders with four major action so far this fiscal year the were divesting majority of our mass market personal care of business and announced in early june the transaction was pretty good at it sharpens our focus on stated objectives of grow in our leadership brands and expanding consolidated operating margin we can now deploy resources that historically have gone towards our personal care of business opportunity to better fit our long term growth objectives have more attractive growth prospects and are expected to have a better our ally but i doubt that you're also allows our sales and profit growth rates to accelerate i eliminating the drag the personal care business the second action was in a land purchase and galloway tennessee to build a state of the art distribution center which will have high levels of automation and scale will direct to consumer capability is new two million square foot facility will support our house where portfolio allow us to capture even higher levels of efficiency in the back half of a to two as we we optimize how we knew the rest of our distribution footprint cost the company and it will position as the better support future organic and inorganic grow third action with adding further value to shareholders by repurchasing just under two percent of our stock the boards action was the in more inventory ahead of the bulk of the cost increases currently seen in the market it had multiple benefits it is an important component of our cost mitigation plans innovative higher supply chain costs it also positions as well to continue to meet demand and better manage the current period of global supply chain disruption taking on more inventory ahead of are seasonal high volume periods of provide more certainty in the face of container shortages shipping delays he called it outbreaks at several key points it also makes good use of our pre negotiated steve for a contract and rate considerably lower and what would be paid in the current spot market and you are no doubt a layer for many other sources the supply chain disruptions in higher costs for commodities and labour had cause substantial challenges the profitability in nearly all industries and very proud of how our supply chain or business units and are fine and teams work together to attack the surgeon costs over the past several months and implement a set of a mitigation planted largely offset the estimated dollar impact the on the inventory and the pre negotiated see for a container rates i mention we have reduced or delayed are spending plans in several areas and are implementing price increases those price increases at be carefully designed to protect our ma i could shares by managing key consumer price points an additional mitigation measure has been to introduce new products and higher price point and at the elevate the benefits of our brands so they can deliver for consumers and can sweetener next and would now like to touch on our business segment results for the first quarter you to lead the way with exceptional sales growth at just under seventy nine percent of or by major beauty brands grown substantially the key drivers were significant improvements since supply to meet continued high demand for current products such a volume managers and waivers and if successful launch of new innovations such as the dry are reserved line the were new distribution in the us club channel and expanded distribution in europe and latin america last ordered salon shutdowns and homebound consumers a year ago made the comparison easier this quarter you know that our duty segment grew five percent in a year though comparison period you yeah operating march improved markedly behind make improvements operating leverage and the benefits of our amended revlon trademark license a pioneering family of one step value misers continue to grow across revlon are tools bed head and now also on dry bar communication across more and more social media platforms it's helping expand popular popularity with consumers and helped to build a franchise one step is now accumulated more than three hundred thousand online reviews and an average of four point six stars on amazon alone that eighty percent of then it five stars he continued to the opportunities for further household penetration and market share upside in the us he also see more upside is with further expand our presence in india in canada and in latin america gli bar with a substantial contributor to the growth and margin improvement and stores and swans reopened and social gatherings resumed and as we launched more the innovative new products we have invested in over the eighteen months since acquisition combining our scale distribution reach and strategic focus on duty appliance the dry bars prestige positioning is very powerful examples in recent months include the single shot appliance on drive on a high and dry bar reserve ultralight dryer and the liquid grass last product line now that we have a good better and best in the lions portfolio we're leaning into our momentum through a robust pipeline of new consumer centric innovation new marketing programs and even stronger organization and feet and further new distribution now our house where segment first quarter sales surged by approximately thirty eight percent or house where segment is a diversified mix of october excelled indoors and hydro flat with compelling indoor and outdoor lineup oat bran school in the quarter in both increase market share and their categories oxytocin upturn a key brick and mortar retailers and solid point of sale results reflecting imposed or traffic and new distribution of domestically and internationally new product introductions contributed to growth and reach as retailers and consumers responded well to be launches ox a good grip softworks awesome taught and oxus deal all made healthy contributions to the quarterly globe opposite market shared wealth as broad based gaining ground across all the categories we track so share games across the past three six and twelve months reinforce our belief that the trend seen with younger consumers and new household buying more actual items or sticky he also expect capitalize on expected surgeon wedding that would postpone during cold i could laugh continue to be very strong role in both domestically and internationally in the cooler we are focused on building it into a global brand in an industry leading sustainability and environmentally forward profile that contribute to the authenticity consumers and door domestically he saw broad improvement in brick and mortar across the outdoor grocery and sporting goods segments internationally i to go even faster canada was a growth leader while amia the asia pacific in latin america also experienced significant growth as we further build our hydro flask distribution footprint your thing helping to mess the point of sale returns as well as inventory replenishment orders corresponding to the strong fell through wait for those customers when we have visibility i too fast roots marketshare considerably during the core it continues to leave the u f insulated water bottle category by well more than double the share of it's nearest competitor new hydra five guide him to go beyond the bottle began shipping and contributed to the corner including the outdoor kitchen collection hydration get back and dry storage the brand also fed the excitement on the bottle side to attract consumers and encourage loyal hydro flat geezers to add just one or even two more for their collection i launching new color years and design in it's trails years elton home delivered sales growth of just over two percent bonding over the especially strong twenty nine percent growth in a year ago comparison period the this quarter came from a continued high level demand for air purifiers the monitor sales were essentially flat despite the elevated year over year based in europe or biggest the monitor market fails in the quarter remain high at the vaccination rates are below that of the united states and data suggest those rates will peak at lower levels looking at chat channels and new products the business on upturn a key brick and mortar retailers as quarter with improve store traffic and new distribution both domestically and internationally current a new product introductions contributed to the growth is prior investments in in innovation in fans blood pressure monitors in honeywell to who have the air purifiers the in the new vex non contact the monitors with favorably received by retailers and by consumers even the tailwind from covered in health and home fear ago base we believe that it instructed to look at the first quarter and full fiscal year on a two years back that would imply sales are up over thirty percent versus two years ago and a clear indication of the higher installed base of products that use our high margin but lately filters such as x and honeywell adam unifiers you are water filtration pitchers and pure profit mouse and on honeywell air filtration devices while the threat of called in itself may be receding in much of the world he believed the heightened levels of overall awareness regarding the need an important for clear air and water will remain sticky in homes and workplaces is is is hotels and institutions it is also expected to be a significant factor for schools and universities as they reopened it's ball important to keep in mind that health and home operates across a diverse set of categories as an example the heat wave been in some parts united states and europe this summer had been accelerating recent fan fails demand is also been elevated for air filtration devices and severe drought conditions and much of the western united states increase the rich
spk_2: good wildfire
spk_0: our building deserve that the man will depend on how quickly we can resume shipments of our air filtration products rounding out the business result i would like to touch on international doubling down on international as an important strategic choice interface to strategy i stay at home orders in many markets or international business grew faster than the company in the court he grew and all three different segments with housewares and beauty meeting the way the international business continues to benefit from the stepped up investment we made in a second half of fiscal twenty one that supported new distribution in continental europe added further support were uk businesses and increased awareness of are gone know touch the monitors in asia and we now start our third year of face to we remain ahead of the glide path for international wrote that we announced that are two thousand and nine thing investor day to create at least a hundred million dollars of incremental organic failed outside of united states by the end of a to with the operating margin improvements we have made in the international market so fine phase two we can continue making new investments with attractive our allies to accelerate growth outside of the us looking ahead we are now in a position to provide our outlook for fiscal twenty two which metal walking through shortly and expected are housewares and beauty segments or each projecting healthy growth in revenue and profitability on top of the elevated base a laid down last year we expect to use this revenue growth and the plans to mitigate the cost inflation discussed earlier to feed the reinvestment flywheel for the thing that helps sustain their momentum and to expand their margins for the full fiscal year or projection and health and home include the estimated impact related to the a p a matter as mentioned earlier you're working with all speed on that front i didn't want to emphasize that excluding the impact of the even if he a matter he we're on track to achieve growth in both cornet failed and core adjusted earnings per share this fiscal year in line with the thinking we communicated and april i would also like to note that we have faced of times before in the past two years alone terrorists gilded nineteen and the current environment of coffee place in and of supply chain disruption have been major challenges in each case are high performance organization has they'd been lent was the focus on problem solving they worked together to protect our business and brands and we have stayed the course to deliver compelling not year results looking at the longer term we remain committed to our faith to transformation plan it delivered excellent results and we believe it still has considerable opportunity to drive the sales and profitability growth a can create significant additional long term shareholder value he expect to return to our face to average annual organic revenue and adjusted dps growth targets in fiscal twenty three and in physical twenty four and we remain actively focused on acquisition opportunities as a major part of the transformation plan that can further accelerate long term value creation learning now to other matters many of you have told us you are highly interested in hearing more about the sg and helen of troy i am pleased to announce the last month we published our first ever he has to report it is available on our corporate website as discussed in the past week he has to is a strategic priority for our company sustained success in fiscal two thousand and nineteen we began to embedded into the broader face to strategic transformation plan to try to all we do with helen of troy the believe this approach best allows us to make a difference in our business plans and organization and closing reflects our purpose to elevate lives and sore together we also believe that integrated approach to he has gene within our overall transformation plan best serve all our key stakeholders we are pleased that are e s t efforts in a new disclosures in the report a being acknowledged externally just one example is invitational shareholder services our iss environmental score improve significantly over the past year now placing up in the top thirty percent of firms they compare it to our social score is now in a top twenty percent and our government gore has consistently remained in the top ten percent for the past several years while we still have many miles to go we are very proud of the progress we've made so far before finishing up my remarks i would like an update you on a few key areas including how we are handling back to office how we are further rewarding and motivating our people and on c f o succession bring it back to the office our our the many helen troy associates who have been working from home since last april will begin operating under a new hybrid model beginning of september goal is to utilize the learning from the past year that had a positive impact on productivity and wellness for some associates and also addressed gat the one hundred percent work from home era he will continue to focus on safety an honoring the principle that make our culture so powerful and on advancing our strategy which had to attract retain unify include and train the best people with the safety of our people is our first priority early last quarter helen of troy rolled out cash payments and additional vacation time to incentivize vaccination so far over seventy percent of our worldwide associates are now fully vaccinated in the united states that percentages higher and several of our largest sides are approaching ninety percent main feature of the two three hybrid model are optional work from home on mondays and tuesdays and mandatory work from office wednesdays and fridays having all associate scheduled for the same work from home and office days worldwide avoid the productivity drag from mismatched individual remote days and insurers collaboration which is so important to how we work online essential workers will continue to work inside such a distribution centers and cast lead in person all five days with regard to further rewarding and motivating are people i'm very pleased to announce that in may we awarded associates worldwide with a grant of thirty shares of helen of troy stock the test over the remaining for years of face to the call these awards transformation shares as they are designed to recognize the tremendously access so far in face do and provide motivation to execute the initiative that will drive the back half with pasty with excellence the fades to transformation share grant was made to associate that all levels and all ten years he made a similar gland toward the end of phase one and side power and help you to fire people that birther recognize their hard work and to provide occurrence in going alive blinds them even further with the interest of our long term shareholders on t f o succession i would like to share some news on our progress since brian's previous announcement that he plans to retire on november first i'm very pleased to announce that affected november first met osbourne will be appointed cfl of helen of troy note with you have had exposure to mad over the past year he has done an outstanding job over five years in his role as senior vice president of corporate finance and has distinguished himself as an important contributor to many of the results during both phase one and face to that has been the primary architected the transformation of the finance department into and even more capable global shared services t he has upgraded the team and block them together under our strategic plan he was central to the culture work we undertook several years ago and has earned a reputation and to constructed collaborator matt has also been a central driver of system in profits improvement as we standardized and simplified to drive efficiency to the transformation into a much larger much more profitable and much more global company as we are today over the past year or so he has been working extremely closely with neat and our global leadership seen as we build and execute face to he has been battle tested many times as we work through major challenges such as terrorists and with an input cost inflation structuring the build out of our did you see business and developing better reporting for international he has led the budget for and strategic review prophecy that are now part of the basic fabric of the company he begin he brings significant public accounting and international experience at major burns such as ernst and young and best buy best by before joining helen of troy he's ready to take on the vehicle with my phone support with unanimous backing of i board why will remain cfl until november and will be instrumental in the rest of the transition he will celebrate by and much more when his retirement gets closer in while i hope you'll join me in congratulating mad and in thanking brine for is excellent work across all aspects of helen of troy for over fifteen years that i will now turn the call over to both of them starting with brian thank you julian good morning everyone and thank you for joining us like make some high level comments before handing it over to madagascar who you the first quarter results and our outlook for the fourth is clear twenty due in more detail was medically quarter with consolidated felt good about twenty nine percent on a basic are almost four percent in the sanctuary last year or first quarter growth benefited from know that consumer demand for products reckon more strength international expansion how the well but supply the ship and timing of amazon prime day and shipment that's built into the first quarter do the winter storm yuri at the end of the fourth quarter
spk_1: first quarter cell growth also benefited from incremental investments mean the fourth quarter of fiscal twenty one i fell are eating investments into the prior year were also able the guy tried greater profitability in the first quarter of this year
spk_0: we expanded adjusted operating margin basically basis points and increase adjusted blue the dps by over thirty seven percent on a basic normal point three percent the same period last year and included significant temporary cost reductions due to call the nineteen the first quarter was not without its challenges especially the unprecedented global supply chain disruption and inflationary cost pressures other the uk matter prevent another challenge to overcome with made considerable progress towards is being a transitory hands and resuming are paid to growth trajectory we are pleased to initiate has had you for your outlook after defying last quarter to supply chain coffee place and transport holy develop or to the paced actually action the initiated on may twenty seventh we ran a position to provide a physical pony cuauhtemoc with or never fail in a job to do know the dps growth of the highly elevated of this for twenty one despite approximately fifty five to fifty million dollars of estimated inflationary cost and
spk_3: jesus
spk_0: by an accomplishment life circumstances with only the estimated impact of the the a matter of enough back from coordinate failed and the just dps flow we believe this is an indication of the underlying strength of our business and the power of our diversified portfolio finally which of announcement today regarding that succession into the sea available on my retirement on november first i like to take a moment to congratulate matt express my gratitude for all the he has done or me and the company over the last five years his promotion into the sea of opposition as well as earth and company could be better hands matt i'm really proud of you and i'm thrilled for you and your family and with i am and handed over to you to take us to the first quarter of fiscal policy lot lot more detail thank you brian appreciate the kind words in a tremendous support that you and many other the organization had given you on the way in leaving very big shoes to fill in november and looking forward to the opportunity to continue to build on your success i also want to thank you and the board of directors from trust any with his leadership role and the financial future the the company and excited to be part of the global leadership team that will help the company continued success the progress to pay to and the on equality thing i don't know what i'd like to get a little more color on e v a matter that impacted our gap gross profit operating income and community pf during a quarter without shipment actually did not and a material impact on our first quarter sales however he recorded a thirteen point one million dollar charge to write off the obsolete packaging for the impacted products in inventory on hand and in transit as in the end of the first quarter a twenty two the charges recognizing costing it's own and a difference in in earnings release as a p a compliant ah the are implementing a number of cars control measures in help him home segment of that a portion of the impact on the anticipated reading a decline later on my remarks regarding up this the twenty two hours and will expand and how we estimate that matter what impact the rest of the fiscal year now turning to have been caught a result consolidated organic failed out the four hundred forty seven point three percent was driven by a beauty and elsewhere stagnant i failed benefited from higher peak out in a brick and mortar failed due to the favorable comparative impact the store for years and reduced or traffic the priory a period an increase in international fail i have when a club in contact channels growth and online failed and the favorable impact of approximately fifteen million dollars from orders that were not able to be shipped that the and then the fourth quarter is the only one in winter storm yuri the impact of new orleans that roughly spread evenly across each of the segment those profit margin declined one point eight percentage points in the first quarter primarily due to higher in bound freight expense and he a compliant car these items were partially offset by a more favorable product names have been beaten segment or as to and a ratio decrease your point two percentage points to twenty eight point eight percent as we benefited from operating the average and hires failed reduce well they've spent more a motivation and a decrease in bad that expand and items were partially offset by the unfavorable impact more normalized novels the personnel and advertising expensive compared to the first quarter of fiscal twenty one when level than spending any there is no restricted view the temporary calvin related costly gumption initiative gap operating income was sixty four point eight million dollars or twelve percent a net fail on an adjustable operating margin improve sixty days to point to seventeen point five percent it's increase primarily reflects more favorable product next in the beauty segment operating leverage reduce royalties then and a decrease in baghdad expand these factors were partially offset by higher in bamford expand in less favorable channel make from the house for segment and higher personnel and advertising expensive in contact of the percentage of income before tax with eight percent compared to an income tax benefit of thirteen percent for the same period last year primarily due to the benefit of the care that and of good twenty one net income was fifty seven million dollars or two dollars and thirty one percent for diluted share non gap adjustability dps increase thirty seven point five percent to three dollars and forty eight that within the positive impact from winter storm yuri of approximately twenty cents per share now moving on to a financial tradition in the quality net cash news by operating activities with sixty three point four million dollars compared to cast provided by operations of ninety two point eight billion dollars in the prior year the change in casual was primarily due to continued investment in inventory to help mitigate supply chain disruption and the timing of working capital changes we received proceeds related to the failed a personal care business or forty four point seven million dollars at the beginning of the second quarter and we intend to use the net cash for kids to pay down debt or make capital expenditures photo short and long term debt was five hundred and eleven million dollars compared to three hundred and twenty four point nine million dollars good to the sequential eight reads from the three hundred forty three point six million dollars at the end of the fourth quarter a leverage ratio as defined in our debt agreement was one point four times compared to one point one time at the same time last year and one point zero time but the and in the fourth quarter arnett leverage ratio which nuts or cash and cash a good ones with their outstanding debt was one point three times but the end of the first quarter compared to zero point nine time at the end of the point or now turning to our for your outlook of the the twenty two you did the sale of majority of the present their business during the second quarter of disappointed you and expected continued question of the remaining latin america and caribbean personal care business non for profit before you to the outlook are providing it on both a consolidated and core business basis we believe the core outlook provides the best compared to already between historical and future period and i will therefore focus on cork in my darling remarks i'm looking to the current estimated impact the duration of the bp related stop shipment action previously the got which is based on admitted timing of approval and implementation of ah compliant plan our outlook include the estimated unfavorable fails avenue and back of one hundred and ten in two hundred and thirty five million dollars and an unfavorable adjusted deluded dps impact of seventy seven two dollar related to the expected that failed by human earnings into the p a matter he just do the movie dps impact his neck of the favorable impacted cost reduction action being taken and help him home segment which includes reduction in personnel marketing and select new product development cause with the goal of preserving key long term growth initiate it is important to note that the vast majority by cost reduction actions will be within the health and home stagnant so that we can continue to support be expected growth about the beauty and health was segment we encourage thirteen point one million dollars a vpn compliance costs in the first quarter of fiscal twenty two in conjunction with the implementation of occupied fans the gods are included in our gap operating without are excluded from are not gap adjusted operating as though we expect to incur additional uk complied cause which may include caught to be package is clean and tory as well as incremental freight and storage cause i'm another thing we expect to continue to actually be part of are non gap adjusted operating without and they had been excluded from the a new outlook for non gap adjusted deluded dps we expect consolidated net failed revenue in the range of one point nine three to one point nine eight billion dollars which implies a declined eight percent to five point five percent we expect cornet failed glad the new in the range of one point nine to one point nine five billion dollars you imply the decline of six percent to three point five percent and include six point seven percent to five point four percent of unfavorable impact related to the uk matter arnett failed outlook reflects the following the patient by segment how towards net sales growth of seven to nine percent elton home that fills decline twenty seven to twenty four percent including thirteen point two to twelve point four percent of decline related to the uk matter peeling consolidated net failed grow a four point two to six point three percent and beauty coordinate sales growth of seventeen to nineteen percent huge that consolidated doubt the movie dps is six dollars and eighty than the seven dollars and forty nine ban and poor deluded dps the six dollars and fifty cents the seven dollars and twenty eight then we'd that consolidated non gap adjusted the new the dps in the range of ten dollars and for extent to ten dollars and ninety seven ten and core adjusted blue the dps in the range of ten dollars and forty five to ten dollars and seventy five cents which exclude any mph compliance costs had that impairment charges restructuring charges tax reform sure they compensate can expand and intangible assets embarkation expense our core adjustability dps outlook to the decline and seven percent to two point five percent which include nine point one percent to six point three percent of impact into the play matter not including bpm that are are outlawed compiled year over year adjusted you play as growth of two point one percent to three point eight percent or outward also include year over year inflation costs gushers of approximately fifty five to fifty million dollars or approximately two dollars and twenty five ten to two dollars in only by fan of adjustability dps much of between the lilia mitigated to a combination of improve makes price increases our buying them into a delay cause impact lightning previously negotiated shipping contract at read the most current market prices and implementing other cost reduction initiative
spk_4: are consolidated and corner failed
spk_0: can you care about of like the following a function that the severity of the popcorn movie then will be in line with pretty common historical averages a function that june twenty twenty one foreign currency exchange rates will remain calm and for the remainder of the two year and an estimated weighted average diluted share the outstanding of twenty four point four million we expect to be reported call gap effective tax rate range of twelve point funny the thirteen point eight percent and core adjusted effective tax rate names of nine point nine to ten point nine percent the drain incorporates the previously disclosed adverse impact of one five five two percentage points due to changes in tax law impacting i'm okay outsourcing operation even though we expect the tax or plan outlined by the by administration can you to a mall i will make some common eight than the current interpretation although there are the proposed increase to the us corporate tax rate are less impacted by the changes due to a lower amount of income subject attacks from us twenty to twenty five percent about worldwide income like that we do not expect any of the proposed changes related to the global intangible no tax income often referred to as guilty to have a meaningful impact on our consolidated tactics expand as many of our foreign subsidiaries are not directly or indirectly owned by a us parent and are not subject to guilty or us
spk_5: taxation
spk_0: the g seven recently announced a commitment to pursue a fifteen percent global minimum tech lab with the only video game further support for the changes and their proposal will be brought to the g twenty this week
spk_4: if the only thing you to trample game content is gonna go on a minimum tax dad it's got potential implementation of changes as early as twenty twenty three
spk_0: in the event any changes become law that are meaningful to watch that cannot be mitigated in would expect any impact beginning in our fiscal twenty four at this stage it's still unclear what path that know the bad and in what form as well as when they would take effect nevertheless we are not expecting a meaningful impact from tax legislation changes into fiscal twenty two we will continue to assess the impact that propose legislation is considered and provide updates in the future we expect capital out but expenditures one hundred to one hundred and twenty five million dollars per episode twenty two which include expected initial expenditures related to a new two million square foot distribution facility with state of the art automation for the house where segment preliminary estimates of the total cost the new distribution center and equipment or in the range of two hundred to two hundred and forty five million dollars spread over two years twenty two twenty three assuming construction and equipment costs remain at current levels you to the strong road comparison and call it related events is the twenty one and the timing of the estimated impact of the shipping restrictions related to the uk matter he expect consolidated coordinate sales growth of the good twenty two can be concentrated entirely in first quarter of the fifth go year we also expect core adjusted dps growth for this the funny to to be concentrated in the first and fourth quarter of the fiscal year with the second quarter being the most impacted by the should be restriction as well as having the most challenging quote comparison to the prior fiscal year i don't have or outlook called for an overall net sales decline you're proud of the results we're were able to deliver in the first quarter in all three segments and are excited about going back the growth pbt and an outward segment has got twenty two of respected excluding the forecasted unfavorable impacted the he stop shipping action or outlook would imply the about seven percent to one point nine percent record sales growth in line with our initial goal going from are elevated the one one day i'm a cooler adjusted the movie dps perspective on only are forecasting a decline in the the funny to our outlook improved on paper the impact two dollars and ninety five thousand to three dollars and forty five ten related to inflationary cost pressures and pineda we expect our mitigation plans to have that much of the cost inflation however he do not expect the felipe mitigate estimated failed bargain impact of you feel matter to cost reduction in help and home or other segments as doing so would significantly impact the attracted longer term growth prospects of the company excluding the admitted impact the uk matter or outlook and five core adjusted deluded dps felt of to got one percent between thousand eight percent of brian mention believe that this outlook is quite an accomplishment in light of the circumstances it only estimated impact completely a matter holding a back and coordinate failed and adjusted dps gun we believe we can return to our average annual long term goal three targets of two point five percent the three point five percent organic failed growth and it's just a vps felt that a percent it's the twenty three and twenty four
spk_4: if we are able to deliver a couple pointed to outlook and return to a long term growth rates for this the twenty three and one for that would equate the same to compound annual growth rates for sale of approximately six percent and adjusting the as a precaution on ten percent which are well at the base to target the first presented during our does today
spk_0: in a twenty nine team in closing despite the challenges which been in believe amistad of strategy capability in competitive advantage and that have allowed helen of troy to perform in tough times and in good time i believe the are well positioned to return to our stated long term targets and deliver continued value for consumers the don't feel customers communities and shareholders during the remainder of a few foundation of our business is strong and with a diversified portfolio able the operating platform and strong balance sheet you believe you can continue to be successful even in the most challenging external environment and with that i'd like to turn it back to the operator for question you will now be conducting a question and answer session he was like to ask a question please pass star one on your telephone keep at a confirmation town will educate your line is in the question cute for forget by cubic speaker equipment and may be necessary to pick up your answer before crossing the starches one moment please while be all for your question
spk_6: our first question come from a lot of bob ladder but cj a seizure yeah securities please proceed with your questions good morning and for such as like to start with my congratulations to matt on the announcement is the role starting november and to brian again on has announced retirement as far as a father appreciated
spk_0: absolutely her to on maybe hopefully you can expand a little bit can you tell us what queens are in question and are these claims and the labeling issue specific helen of troy or other companies are having similar issues with similar products yeah hi bob the morning it's julian i'm at the or on on your question there are it's our understanding that the a ph in recent years has and roger inquiry on some areas of claims in there are rules and an only recently and to think in the code in iraq are they have been investigating even further we have anecdotal evidence from various sources that there are multiple accompanies the affected that we don't have specific son is really wouldn't name i mean them are in our case on the subject of claims on the depends byproduct they're actually quite minor are and the reason i say this it is because our archer were labeled and water as an example and rv vu nonetheless asked us to clarify our that the pure products don't build your microbes for clarity we never claimed that they did and and is already been corrected nonetheless we're going to be sticking of boxes and those are the ones that have already resume shipping and the
spk_1: case of air purifiers there's a combination of claims of which are accurate but nonetheless a combination of them on his by the is a strict interpretation of their rules not in compliance and a week or feedback from them shortly i'm that will begin the rework as well as was to shipping clients and in the case of humidifiers that just one
spk_6: specific group of humidifiers that's affected it again on a strict interpretation of a rule that they've asked us to clarify you have a submission to them and we hope will approve of short
spk_0: okay great that's helpful thanks for them view view this as an isolated fiscal twenty two event happened he expected to have an impact on twenty three and beyond our how should we can think about this event over medium or longer term yeah to question and i know i wanted to the other analysts have it as well on what we're focused on fiscal twenty two i as i mentioned were already resume shipping on the water purifiers and we believe that would be isolated a little too soon to sell still am how quickly all the recovery the be on air just as we don't have the final clearance yet the humidifier when i emphasize this is small i'm in the case of the air one and we hope to be able contained within fiscal twenty two as well and therefore be able to grow up from the on it with avert a base as opposed to on the
spk_1: none of the didn't face see how that turns out on air but it is our hope it's also a plan and just for absolute clarity and i would mention more than once in a press release and on our car but i couldn't imagine anyone walking away from this car or or hearing recording of the think that there's anything at all around with the planets with ethiopia has given no indication of
spk_0: concern in that regard i did you outstanding products they've been serving the consumer research for years i'll even innovating all along the way i'm so there's no safety this novel i believe this is illegal in anything okay and then and shifting gears a little that you've been very clear before last quarter or in the last quarter cetera that you can strategically use your balance sheet increase your inventory i'm in ah be seated again as corner and mention that use the you know give us a sense of it out this is gonna play on forward how much inventory would you expect that you're an ad in at is where do you see working capital going on on for the are you a couple things here and matt may have some color on this as well we're glad to be in a position to use our bouncy to take advantage of the environment that were in i'm so we have increased or in the toy within the last quarter we did it again this quarter i'm it was a strategic move and what it gets us is a couple of really big things out what one is or it gets have the ability to have product on hand for demand is high that's not the case for all our competitors and as a result and word a good position it also gives us a chance to buy ahead of some of the inflationary peaks that we are seeing up look down on the record books now i don't think anyone knows what the word transitory really going to turn out to mean so on in the stuff at lower cost and what's available to buy from today or is helpful or to us and it's it's good for our customers an agenda cashflow the short term bad of member all at a new toy turns into cash when cells and we own it already so it's a net positive going forward in terms of ending inventory it gives us an opportunity to have ah a at lower position and where we are today which puts us back to healthy levels are some people on the call may have the question a mobile and more inventory means are bad for our oh i see and i'd also means at risk of excess are obsolete and these are not fashion products using our shoes or bathing suits are these are things you don't go out of style on they don't have extra
spk_4: ration dates and so i'm temporary and at the is about it for this for the me too i should come down by the end of year it's or expectation that said damn i like anyone calls and of it in addition to predict how long some of the supply chain disruptions will last yeah and i might just add to that julian agree everything you said in i i think they'd see inventory potentially increasing in queue to by getting down to the end of the year or like julian talked about and navy than getting close to where we ended in applied twenty one but there's still a lotta willing parts but what's happening from guam
spk_2: supply chain self definitely with you at at nasa
spk_0: and we expected be able to decrease or conditions from my we are now to the enemy year okay great and then last one for me out your package you are now house where side you've obviously have shown tremendous growth even reinvesting industry i was trying to better use it for growth is lot of moving parts in addition with the pandemic but in a using round numbers and math of the last six quarters due to this reinvestment for growth margins have been in a fifteen percent range versus the prior six quarter's before that in a twenty one percent range and so questions like what's the right margin over the medium to long term and why and how are you contemplating reinvesting for economic growth and of in the balance of fiscal twenty two and a margin profile expected for the balance of year
spk_4: it matter big rig veda panel that specially on the on the been rate and the on the investment for sure sure yeah in question but ah so you know you her number of you toggle king over the past six corners are so is the time where we kind of we had less makes a tiger
spk_0: last more made for the oc so and as we look forward as are one of the things that we look at from an operating margin perspective and we thank you and our the impact that was we're seeing we can hold operating margins plot year earlier in the school twenty two per flattish on as a company on and we expect we can grow are in households segment and a lot of that's being driven by our next improvements in getting back more mix of time or flask as well as being able to offset a lot of the the cost inflationary pressures we're seeing so dear boy with all to been making a strategic investments there and i think there will be able to the to get closer to where we used to run closer to the twenty than the fifteen but there are some things that we will continue to invest and in that segment on a lot of dtc opportunities there a lot more continued growth and lot of competitive
spk_6: environment especially with hydra laugh that we wanna make sure we can protect and grow what we have done and i think that they'll be continued investment by opportunity to improve margins on the six corner one way that you're quoting
spk_0: added super i thank you so much thank you our next questions come from the line at recast very put up in iraq please proceed with your question
spk_7: good morning tanks are good guy question and also congrats man on a promotion
spk_0: thanks her best
spk_8: so i get i get so depressed but i want to start our with is no longer term guidance for the commentary for three percent organic sales growth and a present you just growth on average and at by twenty three not by twenty four why the early days we should be thinking about the growth growth off of it it off of the i can twenty body trying seventy by korea vs numbers to maybe do some work
spk_0: larry their interns or her added the got the base
spk_4: am i getting like to start again other you join and them feel pretty job and yet were patched good question of you know right now they're like julian of we we want to make this you pay impacted transitory as possible and the i spoke to the maybe more short term nature of flu medication
spk_0: and and water but air as a little bit on more uncertain at this point the term howard on resolving and the coverage so we've done our calculations yeah yeah you heard me and the prepared remarks quotes long term k guards of six percent on the top line and ten percent on the bottom that would based off of the tenth white by
spk_4: five to ten seventy five but we really want to focus on a flight twenty two and we want to make the impact that were you know assuming now in a very dynamic situation where working really hard to try make or outcome better than that but you know we've got ah another group a working with him and we're going to try i'm in do the best we can it to decrease the impact on that and then well once we get twenty two to place where we feel like we've with that arms around it we'd ever look for to the twenty three long to figure out how we can build that back and make a transitory right now the the calculation for done or on the tend to i thought the
spk_0: semi bad but we're trying to make that better and nine and the able to build on it yeah there's some indications already in a positive direction on is because of the water purification are like we said a couple times it's starting to ship already and i'm looking to accelerate the we work landed and over there but if possible the trade him in georgia quite good are in both of these categories actually nothing more more or less two months worth so our consumers won't be harmed it's our intention he gives us a chance to preserve distribution in the gates of water were were less concerned the case of their i once we get the clarity from the be a we were just as fast as may take just a little bit longer on the air products depending on what feedback loop receive and those boxes are bigger in that more during on a month eventually so we'll see we'll see how that goes but it's rj to intent to do right by customers are not to harm consumers and than that should help solve for what match talking about which is to be able to keep this transitory and then move forward some based it's better than the ones in the diamond the out turns out this is our gardens for now and if we can do better will let you know okay great that a double color and then just because i get a lower gonna gotten so what does a guy in the film in terms of a timeline for shipping be back to the or vilification knew he had humidifiers did any more clarity their doesn't turn how should think about and on my head yeah yeah good decried the question repair so what we would assume the end up nearly given a high and low end of the guidance think on the high end of the guidance is there is i know expected shipping during the second quarter for the affected products in air water and modification
spk_1: and then know hit expected shipping in the third quarter for the air products that are affected the only different then on the low end is all those same situation except air shipments extend into the fourth quarter
spk_0: so god that's really the how he kind of drawn up neon behind the low and and like we said we're we're working to dynamic situation we're working with the be a to to try and make it better than all those assumption of there's lotta a lotta of the player okay great idea about that one
spk_7: and you our next question i'm from the line at anthony lead a dent in that said out and company please proceed with your question
spk_9: ah yes more than a thanks for taking the questions congratulated as well another player
spk_0: on your promotion yeah still so in other as one or two yellow the ask about inventory so c cia a touch on is all about the just wanted to get a little more clarity so it is out there vs year ended vs last year a d said you have adequate amount of inventory for housewares and beauty and and also just wanted to just get snippy below didn't know specifics assisted you enjoy situations that the help and homestead may get the job how much of that would be to be you'll be labeled a repackaged yeah yeah that let's just go to the segments and it ended is a broader point here about grows on trees on and the outlook so that the me try to get my arms around us with you and the just start with the and beauty but you might remember a year ago we were hamstrung by lack of inventory we were am pleasantly surprised the extreme demand for the volume miser franchise and so much so that we were are going as fast as we could even in the original days of the china
spk_1: and reaction to corolla virus or think of your back in the womb and days and in those days there was a lot of shut down of supply coming out of china or in those days we've made really ramped up is because we could have production be satisfied that last year we had a brilliant year in beauty despite gilded it's not because of it this year with less go
spk_0: that we have much better supply because of that work and now we that of the inventory it's lena resulted in the first quarter be beautiful seventy nine percent i'm in in the first quarter that's not some shabby i'm it's not only because of the him into it but now have in a part of a playable and give us a complete the unconstrained ability to meet the market demand or it also allows us to have an inventory what we need for some other products like laborers as an example in some of our new innovations on dry by that are doing beautifully so it's play to our advantage as i mentioned but now but almost as if it's in the case of housewares and we've also increase the him into a because we created belief in the believe that isn't we could grow up in the elevated based they are too not just and beauty and you see that we're leaning into that in our forecasts are projecting have warehouse with girls in the high teams for the full fiscal year lot of that growth and already occurred in the first quarter actually the both beauty and housewares and we believe we have the right amount of inventory to satisfy the elevated base for last year as we both the back nine months of our fiscal year and it and us with a lower totaling a toy them he started as as mentioned earlier in the case of health and home he also ramped up our production because on a virus and because of the inability to meet the man we now have that inventory i mention that in the first quarter on the monitor sales actually flat vs year ago which is amazing given that everybody thought that market was saturated with really europe or that was the biggest part of it at some point there is some saturation of but nevertheless them to demand is there an air purifier to demanded there in a big way and that's dead were constrained at the moment because of the p a matter with uber before the
spk_6: looking result as quickly as possible and it does will ship into that demand and will also do the same with water purifiers out what we're doing right now so i guess you had given sense category by category and international out is going even faster and we don't face any of those constraints we have the inventory and and will will be the man
spk_0: got a letter thank you very much for that the julian so or you'll last conference call and april you talked about having a three attractive acquisition targets that you looking at just wanted to see if you have an update on that and know whether the this eighty eight to the does that perhaps slowdown in the or emanate an actor or is that an issue
spk_10: yeah amp zero correlation between a p a and emanate it's to go to the different areas said nothing do that each other and we are eager on the emanate upon to do the right deal or for the business in the case of the three specific ones are two of them actually had down in their own processes are they now we start
spk_1: it and and we are
spk_0: as a are in the case of the other one they were pursuing were still in talks and yet another one a surface jack you might want to put a little more color on the emanate fun getting out of date has overseen a degree at the market out there and new name is julie gym in touch with several business in the survey was that the slowdown birthday from for our eg our criteria needs it's in the elite got the high marks and what we're what we're looking to lie to achieve any new are some intriguing actions that are out there right now sell were to when encouraged from that standpoint to be policy that the joining had mentioned that if we started out the diligence it is a gun and dad will continue college last summer it's of by these things take to the ball just depends a bad they were any given from our a post men earn in a were more than to be very active or not will continue looking at the the rest of market but the just know they were very active out there right now in one deal damage he to come full circle on it's out with regard to eat be a matter you might think when the balance sheet sampling of we have more inventory or then we won't be able to afford out of the like as i'm at matt mentioned our debt levels and we invite emphasize on is called that the image way that we have is now only right but
spk_11: good unsaleable so i give turn into cash take down our that are any gives us the opportunity didn't take on debt for something else that we think is a great use of for shareholders capital it's also true that our leverage level in the absolute still low even now so i'm if you were enough firepower and from the suggested
spk_0: we're not quite okay yeah take it or so that it is it's just that a bottle of the questions years all your terms of the a whole supply chain should be out there from you and that he also seems like it at have you seen any improvements since the quarter ended or more as he just more the same a just game of the container issues and everything else out there and that largely more the same and that's one of the things were yeah i know the market hates uncertainty but just for anyone is trading this is not our uncertainty it's general and certainly aren't which is at the urban market is our that the app supply chain disruptions are still fairly consistent so think of what's really happening and there are container shortages are there are some called it outbreaks of certain records for example there's a well documented one se china nothing uniquely to do with as i'm so obviously companies like ours are rerouting some other shit was to go to some of the northern ports so think of more than in bone and i meant young pm as as an example and then when we bring him into nights dates bringing them into the force that have the least congestion i'm using those contract a great to be a spot market which is multiples of about our contract a great and on historical rate so more that we can do better and so far we've been doing fairly well and a batting average so remodeling through just like everyone else i think we're doing better than most for a couple or
spk_12: reasons one we got ahead of it or the other is that we have the inventory and advocate the lower prices and the versus today and in the last one is that we have at the price increases in in the market now and so far so good on that on and so i think the mitigation plans or
spk_0: winners and we've gone very long way since april when we couldn't give guidance is because the situation was so i everyday out evolving and now we think we have not only clarity but aren't around it not that i can't tell you that it peaked or that it's over in three months or something like that because i don't get enough got it aired last question a of and by you mentioned at the that ways and each i guess some benefit from the shift of and i'm fine day with anything meaningful to colorado and and by to get more clarity about that thanks
spk_4: the question anthony it's it's so damn i handed over the map answer
spk_12: yeah the new way that we called it out a they will it was one of the driver is it was one of the main driver but it definitely contributed i mean like lot of he said that the ground we had and was broad written by based and that was one of the drivers but i wouldn't put it in front of a list yet that is our need that
spk_0: it it was isolated most mean beauty so really a beauty driver error not a whole company that couple of bucks if it's a bad off at seventy nine percent you'd still be in the seventies
spk_13: god i love thank you my best of luck thanks thank you our next question of come from the lol at when the ball and widerlich the a davidson please proceed with your question yeah kind of you hi i'm so with regard to the if sapping upset none of these products i'm just wondering
spk_0: and what or retailers reaction to death because i have to fulfill their man from their orders from san supplier found the didn't have a shifting the somebody else i'm just wondering how you intend to handle getting back in with the retailers once you are able to reshape and then how do you kind of combine that with the need to take price increases the edge of that going to inhibit you and now if categories from from taking price and then my second question on the pricing tail is awesome with the care of you had some pushback from retailers and some categories and the price increases can you remind us what category those were and are you anticipating similar issues as he tried it pricing now or do you think the pricing is going to go a little bit smoother than it did what the terrorists thanks yeah i'm good good our questions linger the meet them acres of their three and they are going to count them up into the three at first is this concept of of getting back in with retailers of we're not out with retailers i think i mentioned earlier or retailers hot of on average about two months of inventory on the lawn amazon today type in annual air purifier and you can buy one and a but walmart and the same same thing with the water purifiers especially at the brick and mortar were lot of that self on so this makes a huge differences aside the in is after suggesting that we've been taken out with we're not what we're trying to avoid is getting taken out and that's where the eight weeks of them and twenty becomes so important you might also think of a consumer as stocks it's important to consumer can buy the product regardless of what the retailer as we've taken a good hard look at that on the clarity our data indicate that the top five customers making up more than seventy percent of the volume have about two months of inventory on him now nutshell level out of stuff on average you're in the mid single digits and varies by item in also by customer but i'm there's not a crisis yet in that regard because we're now shipping water again we don't expect a crisis of to materialize in case of air purifier really depends how quickly the be a feedback and out quickly we can we work and start shipping again
spk_10: so as far as the back in i hope that helps ensure the reaction is the one that you describe your week eleazer concern and some of them are are strongly concerned and that said as we demonstrate our ability to move quickly with the be a so far those concerns have reduced and until they get what they want and may be shirt their customers
spk_0: i'd also say that the customers and are sympathetic are frankly that there's nobody enjoys his kind of situation they've seen the movie to and they're they're sympathetic and working with that we have very long lasting relationships with his retailers these are generally market leading products it been at this for decades as i mentioned before and they know as they trust us as and they know that we will do right by them and with expect other patients in that regard and our team or for them as fast as we possibly can on a regular price increases are so far so good is my response and our customers realize that we're in an inflationary environment or consumers are have the cash
spk_13: and this is rare in a price for the underlying cause and only after we ourselves do all on mitigation efforts with we have done we've been very clear with our customers that we have taken out our topic for sticking my hand up the price increase so they are generally speaking i we have not seen the kind of push back or that you're mentioning in the case of the terrorists that you a asian it's true or that in an air and in water and in just a couple of customers are there was some resistance we walked through it in the tower of times in those price increases were accepted lot of noise in the stock market on that topic would not have been there at the time and with they now those places were accepted i'm in a case of now so far so
spk_14: good that said we are slowing down a little bit on the health and home increases just to work through the a p a park or to make sure we got it's clear before we go back to the customers and take those prices up or just to make sure that we don't orgasm
spk_0: okay thanks julian and then am can either have to just because we we got some questions from investors about your ah your devaluation of the sale of the personal care bill laugh it is it did seem rather allow i think it was point six times the revenue something like that even for a declining does have that same sort of allow what's your view on valuation there and why not just a thing out of the doesn't than allow it to generate cash for you to find somebody the other initiatives
spk_15: that you have going
spk_0: yeah let me see a little here and then i'd appreciate it if matt might add on to this is jackie may have some views as mature base super clear africa we conducted a broad market process we actually did it about a year and a half or two years ago as well and we're confident out that me i'm sold for the price that that the market would pay you terms of whether it was right to sell at this price given the multiple comment that should make an really believe that we did this right is is about three times or even that and we already harvested the fat part of the cash flow are just for perspective
spk_1: last i've secured with we've taken with a quarter billion dollar to be the dark out of that business in terms of cash flows of this idea of are busting out on we concur and we've done so it's declining and as it declines are you might look at at at an unstable but they're still cash left to hear the answer's yes and by
spk_4: we recognize that and they paid for it's and we've received those next couple years worth inept reacts multiple as you faster with three years at that rate of decline on it becomes less and less valuable to ask also like to point out that that some of the earnings they were in the base here in which we sold weren't harvest levels are so where we didn't wanna lie
spk_0: we would put money back into their and it's that money went back in their versus the other alternatives we had it would be worse on a lie and therefore not right for shareholders my very last points focus i know that power unapologetically not the operators but i can tell you as a thirty year operator or the more you have your ability to focus on the thing that do
spk_4: going to grow the more he groans and you to see that my leadership brand focused as those upon beautifully of the distraction of feeding the last bits of cash flow out of personal care is not the right is can focus name
spk_0: yeah i did that maybe a little that a a colorado julien said in other than declined we were things that in atlanta are accelerating and you know when you're when you're looking at those kind of products and kind of a market you know your team and plated pagans here was able to take pricing sell even more challenges ahead and as we look it up or folio when you've got brands like that that are declining in were trying to expand our operating margins on an annual basis
spk_13: then you know you've got plenty of it could create the whole so you got gap could fill against that margin expansion and you're actually having to solve a couple million dollars from that could go to another segment to fuel go out there so getting back to what julien said that helped us from an overall are ally perspective it takes out some drag problem you know top line and bottom line so something that we think is gonna help us a reinvest back in the business to better our ally there on that drag that we published all the numbers are you can easily do the math there's a have a pointer so just pick up for the fact that you don't have to overcome the damp the decline great thanks and then i'm finally can i did they ask you i i know that you guys don't really look too much of the i i am pos data because it it's not really representative of your whole business but nevertheless ah when we look at that and it actually show is it i'm in recent weeks quite a big decline year of year
spk_16: in most of your categories
spk_0: versus very strong growth in the prior year during the coven surge so how how did say i'm just trying to kind of a line that were that strong sales growth that you were ported in the quarter why is there such a difference is it just a hydro flask is is making the difference and that's not in the eye or i or is that while replenishment of inventory at retail that really draw the
spk_1: sales how can you just kind of yeah one of it
spk_0: sure let me take a stab at this am at the number to come to mind in my mind is it is seventy thirty meaning about seventy percent of what we sell is not captured in i arrived only for thirty am so it's and image in the prior college where we don't buy the i i dated just it doesn't doesn't crack well enough and we rely on sources are my god nielsen for brick and mortar are npd good broad view of broader set a brick and mortar including sport now door which captures a bunch of the retail for i just flat and we use a partner appeals and called for federal for on amazon as as a good tracking tools only get as much further the other big variable in their linda is an international which is none of those databases not iraq or any the ones i just mentioned and remembered international as is something like twenty percent of our sales and going faster than the rest of the company even that we just put it they grow up on the board on a consolidated base so that's why there's such a mismatch in in the tracking so when we look at the i write a to that you publish we'd likely take it and square and against the data that i just talked about and look for the difference is that are we use that information when you when you publish it and our division is when i just told you and in terms of the big result in que one am you heard where it came from him in the prepared remarks and breaking more
spk_1: under which is where i arrived strongest i searched for us during the quarter to did not decline and heard as talk about market shares and i which made a big difference in the case of housewares the numbers as easy them lowered probably club fry arise probably closer to about fifteen percent on five am and as resulted mrs out on on most stuff i think of the internet as as a big one
spk_10: all of international and all of things like bed bath and beyond which are a big deal the comes to beauty think like older huge customer for us not in there when we sell thing like dry in stores like sapporo and old the and dry our salons in fact they make up eighty percent or something like that a drive our sales and none of that isn't any the database
spk_13: is that we're talking
spk_0: that's why it's so different so of the helped yeah thank you very much sure yeah thanks preceded and display don't get the idea that somehow it's all just replenishment or something with which have to demand and retailers and def jam generally be purchased who demand sometimes their inventory strategies move things around a little bit but over the course of like a year on the retailer orders and the demand generally square up pretty well thank you our next question it's come from the lie that state marotta good clk place for see with your question the morning julian by that and actually that you could questions i know we're running a little late the first is regarding eighty aid product became domestic packaging be repurchased for international considering edition of domestic issue it that are potential solution to minimize inventory awful of them on it be possible but it's not prefer is not preferred and the reasons because the voltage in the plugs in some of the email type regulations or e t l overseas are different so it's better to stop it at the manufacturer level and read purpose
spk_1: the internal components or the sub components towards international products at that level and that's what we've done so for example air purifiers to doing beautifully in europe and with diverted some of the production there are to help on this matter meanwhile on the packaging punches for absolute clarity is unknown on the call walks away with anything different
spk_0: none of the products will be scrapped or there will be some old packaging that will be removed probably in the case of air purifiers or sticker it over and in the case of water purifiers the changes are so minor that they'll be zero scrap packaging just the addition of stickers and in the case of the inventory it'll come down i once were a mothership again it's already happening on pure and we hope soon enough on the air purifier so that will help a ton on the important that we did mention a press release with also been able moods and inventory and with the peace agreement or for one of our warehouses to another which will help with the congestion help with the space to do the we work and also make us go faster on the rewards stop and course ensure safety warehouses meanwhile actual thank you might have final question is at urbana comprehensive review of other packaging across categories an effort to minimize the risk of is occurring in the future
spk_2: your car product line yes
spk_0: had strong yes we taken a hard look at i don't know how to emphasize that the these are strict interpretations by the a p a of their regulations so far the changes have been very modest i we'll see how it turns out in in the air area or that we've taken that review across all of the areas that is type of agency and overseas just to make sure everything's days are just were
spk_1: where it should be
spk_0: take you there are no further questions at this time i would like to turn the called back over to management or any closing remarks yes thank you operator and thank you everyone for joining us today and for your continued interest in helena troy how we had nothing short of a spectacular first quarter and ah nobody asked about that but we did our and we really look forward to speaking with you are many of you in the coming days are some over the course of a couple of next couple of weeks and we will share for the

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