Helen of Troy Limited

Greetings. Welcome to the Helen of Troy Limited first quarter fiscal 2024 earnings call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that this conference is being recorded. At this time, I'll hand the conference over to Jack Jansen, Senior Vice President of Corporate Business Development. Mr. Jansen, you may now begin.

Thank you, Operator. Good morning, everyone, and welcome to Helena Troy's first quarter fiscal 2024 earnings conference call. The agenda for the call this morning is as follows. I'll begin with a brief discussion of forward-looking statements. Mr. Julian Minnenberg, the company's CEO, and Ms. Noelle Giroir, the company's COO, will comment on financial performance of the quarter and current trends. Then, Mr. Brian Graf, the company's interim CFO, We'll review the financials in more detail and review our financial outlook for fiscal 2024. Following this, we will take questions you have for us today. This conference call may contain certain forward-looking statements that are based on management's current expectation with respect to future events or financial performance. Generally, the words anticipates, believes, expects, and other words similar are words identifying forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties that could cause anticipated results to differ materially from actual results. This conference call may also include information that may be considered non-GAAP financial information. These non-GAAP measures are not an alternative to GAAP financial information and may be calculated differently than the non-GAAP financial information disclosed by other parties. The company costs its listeners not to place undue reliance on forward-looking statements or non-GAAP information. Before I turn the call over to Mr. Minenberg, I would like to inform all interested parties that a copy of today's earnings release has been posted to the investor relations section of the company's website at www.HelenofTroy.com. The earnings release contains tables that reconcile non-GAAP financial measures to their corresponding GAAP-based measures. The release can be obtained by selecting the investor relations tab on the company's homepage and then the press releases tab. I will now turn the conference call over to Mr. Mittenberg.

Thank you, Jack. Good morning, everyone, and thank you for joining us. Today, we would like to talk about our first quarter results, provide color across our business, and update you on our continued strong progress on Project Pegasus, as well as some other company initiatives. We will also discuss our outlook for the full fiscal year. Starting with the quarter, I am pleased to report that our results, including our sales and adjusted earnings per share, were better than we expected. despite continued pressure on our categories from lower consumer demand and shifting buying patterns. We are also pleased to improve our margins, make further progress on inventory reduction, and deliver significantly improved cash flow. Looking at revenue, we saw outperformance from key leadership brands, including OXO, Osprey, and Pure, as well as from Curlsmith. Several of our leadership brands are improving share in certain categories in the United States, including technical backpacks from Osprey, kitchen utensils and storage containers from OXO, pharmacy humidifiers for Vicks, nasal aspirators for Braun, and seasonal heaters for Honeywell. Our prestige hair care liquids, which feature some of the highest margins in the company, grew during the quarter compared to the first quarter of last year. International also outperformed during the quarter, driven by Braun. our strategic choice to double down on international continues to pay off. For perspective, our consolidated first quarter revenue grew at a 6% compound annual growth rate compared to the pre-COVID base of fiscal 20. During the quarter, we also made good progress on margin, significantly improving gross profit margin and expanding our adjusted operating margin. We also delivered outstanding operating cash flow in the quarter, well ahead of expectations, driven by better-than-expected sales and significant progress on reducing working capital. I am very pleased with how well our organization is executing on the various initiatives we have announced designed to significantly improve cash flow in fiscal 24. In line with our stated objective, we used our cash flow to further reduce our debt, putting us in a better position to deploy additional capital sooner. Turning to our outlook, we are maintaining our expectations for net sales and adjusted earnings per share for the full fiscal year, as well as our key cash flow and balance sheet targets. We expect to deliver, including a return to adjusted earnings per share growth in the back half, despite expected pressure on our categories and consumers for the remainder of the fiscal year. That consumer pressure includes inflation, interest rates that are expected to stay higher, and increasing household debt, all of which are headwinds to discretionary purchases. On a positive note, we are seeing that retailer inventory rebalancing has largely normalized following the significant adjustments affecting nearly all consumer discretionary categories over the past year. Our retail partners are now increasingly matching their orders to consumer demand. Where we have syndicated point of sale data and in retailers where we have specific point of sale data, we are seeing demand normalize in some of our categories and settle at or above pre-COVID levels. Before turning the call over to Noel and Brian, I would like to comment on Pegasus. As you may recall, Pegasus is designed to improve operating margins, cash flow, and operating and organizational efficiency. I am very pleased with how well our associates around the world have embraced the Pegasus structural changes and its financial goals. On the structural side, the specific changes we announced in January are working. The new North American Regional Market Organization is expected to take our sales and shopper capabilities to new levels. In our business segments, our brand and category teams are now even more obsessed with delighting consumers. Similarly, in shared services, our global operations teams are implementing new standardized tools and fully owning our supply chain end-to-end. On the savings side, the set of work streams we are executing under Pegasus are nicely on track. In all cases, our people are flowing to the work. They are demonstrating their adaptability, demonstrating the power of our culture, and executing with excellence. We continue to believe these initiatives will improve profitability and provide significant fuel to make additional growth investments in our flywheel that are intended to drive sustainable long-term growth and value creation. I will now turn the call over to Noelle, who will speak more about further progress on several business initiatives including some that fall under the Pegasus workstreams. She will also speak to our business segment performance.