Helen of Troy Limited

Greetings and welcome to the Helen of Troy second quarter fiscal 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Sabrina McKee, Senior Vice President of Business Development and Investor Relations. Thank you. You may begin.

Thank you, Operator. Good morning, everyone, and welcome to Helen of Troy's second quarter fiscal 2025 earnings conference call. The agenda for the call this morning is as follows. I will begin with a brief discussion of forward-looking statements. Ms. Noelle Jafois, the company's CEO, will comment on business performance and then provide some perspective on current trends. Then, Mr. Brian Grass, the company's CFO, will review the financials in more detail and discuss our outlook. Following this, we will open up the call for Q&A. This conference call may contain certain forward-looking statements that are based on management's current expectations with respect to future events or financial performance. Generally, the words anticipate, believes, expects, and other similar words 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 materials from the 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 cautions listeners not to place undue reliance on forward-looking statements or non-GAAP information. Before I turn the call over to Ms. Geoffroy, I would like to inform all interested parties that a copy of today's earnings release and related investment deck has been posted to the company's website at www.talentoftroy.com and can be found by navigating to the investor relations section of the site or by scrolling to the bottom of the homepage. The earnings release contains tables that reconcile non-GAAP financial measures to the corresponding GAAP-based measures. I will now turn the conference call over to Ms. Geoffroy. Thank you, Sabrina.

Hello, everyone, and thank you for joining us today. I am pleased to report second quarter results that were above expectations. During the quarter, we took decisive actions toward our long-term strategic initiatives, including strengthening the core and further shaping our growth portfolio. In addition, despite persistent macro headwinds, we are generating results on our efforts to reset and revitalize our business, which we believe indicates we are on the right path to improve our operating performance. Through our increasingly data-driven approach, we continue to see improvement in our brand fundamentals. Project Pegasus continues to be on track and is generating critical fuel for reinvestment in our brands. This fuel, combined with our sharper brand fundamentals, is leading to stronger marketing with new creatives, new, more agile media campaigns, better innovation, and better execution. We are also continuing to grow our distribution. Fiscal year to date, we meaningfully grew our U.S.-weighted distribution by 9% year over year, making our brands increasingly available where our shoppers shop. All of these efforts contribute to improved market share performance, with eight of our key categories growing or maintaining share this fiscal year to date in our U.S. measured channels. Now to share an update on shaping our portfolio. We have previously shared that we were engaged in an active process to divest a business. Shortly after the end of the quarter, we opted to pause that process as the offers we received are not indicative of the value of the business or its potential. We will continue to consistently evaluate our brands to ensure we position the company for long-term success and growth. Our acquisition strategy remains to look for brands with strong global growth potential, are financially accretive, and meet our better together criteria. We will remain disciplined in our approach to both divestitures and acquisitions to ensure we are able to deliver on our commitment to increase shareholder value. Before I turn to the results for the quarter, I will provide an update on the Curlsmith and Tennessee Distribution Center operational issues. As previously discussed, we resolved the Curlsmith ERP integration issues. In the second quarter, we successfully integrated Curlsmith into our distribution network ahead of plan. With respect to our Tennessee Distribution Center, I'm pleased to share that we consistently improved our shipping execution and operating efficiency throughout the quarter, and have now addressed the root causes of the technology issues we experienced. We are now servicing customers and consumers in line with our expectations and anticipate reaching our productivity goals by the end of the fiscal year with a continued eye on best-in-class service. Now let's turn to performance across our portfolio. Overall, we see our home and outdoor performance strengthening, our wellness performance ahead of our expectations, and our international performance remains a bright spot. Our beauty performance was below our expectations for the quarter, but we are taking focused action to improve the fundamentals of the business and its brands. Starting with home and outdoor. Oxford Brews share fiscal year to date in core kitchen utensils, a category that we see as largely normalized post-pandemic. The brand achieved strong sales at Walmart following the June expansion into 3,200 stores, an over five times increase versus the test. with additional distribution coming soon. OXO is also gaining momentum in dry food storage, with share growth fiscal year to date. OXO also continues strong momentum in coffee. Shortly after the end of this quarter, OXO launched our new portable rapid brewer coffee maker, which makes hot coffee or cold brew in five minutes or less. It has already earned positive reviews from Food & Wine and Consumer Reports. As I will discuss in more detail later, international performance, especially in EMEA, is also strong for OXO. Hydroflask outperformed our expectations and is a key example of brand revitalization across innovation, distribution, and marketing. We still have many areas of opportunity, but are encouraged by our meaningful progress across all key focus areas. The new travel bottle was launched in the second quarter and provides consumers with the best of both worlds, the utility of fitting in most car cup holders or backpack pockets, and it is leak-proof. The new bottle comes with your choice of the Hydroclass flip straw or chub cap, along with a convenient carrying strap. Hydroclass also successfully launched into Costco, a key retailer for our expanded target consumer. The brand also benefited from strong distribution internationally with sales up in all key markets. Hydroclass also launched a new brand campaign called We Make It, You Own It. The campaign celebrates the individuality of the hydroclass consumer and highlights the broad array of products, configurations, and colors we offer for a wide range of consumer preferences and occasions. The brand also showed great consumer obsession and marketing agility this quarter by being a part of two relevant cultural moments, Brat Summer and the MTV Video Music Awards. Music artist Charli XCX launched her Brat album in June with an iconic lime green album cover, leading Gen Z to christen the summer as the Brat Summer, which was typified by cool girl style and lime green everything. Hydroflask quickly created a brass summer water bottle that we promoted on our social media accounts. Our Instagram posts achieved Hydroflask's highest year-to-date engagement rate, drove a double-digit list in sales around the post, and gained the attention of Charli XCX, leading to a new partnership for her current concert tour and great overall exposure for the brand. Our second cultural moment came in late summer when the VMA's Best New Artist winner walked the red carpet and sat in the front row with a custom hydro flask in hand. Social engagement on that post has now eclipsed our BRAT summer post. These are two great examples of moving at the speed of culture, which is critical to driving relevance with our target consumer. Turning to Osprey, The brand is maintaining its leading share in U.S. technical packs, even as that category softened. Osprey continues to extend into exciting new adjacencies. A great example that is rooted in consumer obsession is Osprey's new photography accessories line. After years of consumers asking us for photography gear and extensive research and testing by Osprey, we launched our new photography accessories line in July. The line is built around the photo lid, an innovative padded camera case to support active photographers and content creators, and designed to replace the removable top lid on most backpacks, while also offering accessible and protective storage for photo gear. The new line has received strong consumer engagement and a tremendous response from the industry, earning Gear Junkies Best in Show Award from the Outdoor Market Alliance Show. In everyday and lifestyle packs, Osprey is having strong success with its Daylight line, which is driven by new color design, Osprey's high quality materials and durability, and an affordable price point that caters to consumers in the current economic environment. This line continues to offer extended distribution opportunities for the brand. Now turning to beauty and wellness. Our wellness business performed above our expectations with particular strength in bands and thermometry. As widely noted by the media, illness rates in the U.S. increased through July and much of August, and both Braun and Vicks thermometers saw higher POS. Fiscal year to date, while the thermometry category overall has remained relatively flat, Braun and Vicks have outperformed and gained share. They remain the number one and number two brands in the U.S., respectively. We also gained new or expanded distribution on Braun thermometers at CVS, Costco, and Walmart, in addition to Braun blood pressure monitors in Walmart. In humidification, while the category remains soft, Vicks has maintained its number one share position. As we enter the peak cough, cold, and flu season, our inventory is well positioned to serve customers and consumers as the season progresses. In water filtration, We are also seeing positive POS for Pure at Walmart, where the brand has been growing its presence. For Beauty, we continue to see software POS across the brand portfolio and are taking actions to revitalize the brand and lean in where we see meaningful opportunities leveraging consumer insights and our new brand building framework. We also recently added new leadership with fresh perspective to help set this business up for long-term success. I mentioned the new Drybar marketing campaign last quarter as an example of where we are evolving our marketing content and targeting with the support of our marketing center of excellence. We began the rollout of that new Drybar Polyglamorous campaign in July. This is a bold and fun repositioning of the brand that focuses on Drybar's more than 80 hairstyling products and complementary tools that allow consumers to dabble, tease, and play. The campaign has been very well received with social media engagement over twice the historic rate. We continue to see market opportunity for our hair products. We are pleased that CurlSmith is gaining market share in the fast-growing prestige hair liquids category fiscal year to date. This quarter, CurlSmith launched Shake and Shine Refresh Mist, which is crafted to refresh, moisturize, and define curls to extend the result of a wash day. In addition, Carl Smith earned an Allure Best Beauty of 2024 award for Frizz Control Cleanser and Duo Conditioner. Last quarter, we extended our popular Drybar Liquid Glass product line, and we followed that up this quarter with additions to our thickening line, Drybar Big Brew. Revlon remains the unit share leader in hot air stylers fiscal year to date, and we have sold three times more Revlon one-step volumizers than the next largest competitive item. This month, we launched a new marketing campaign to appeal to savvy consumers who want salon quality results without breaking the bank. The value reframe highlights that on average, Revlon retails for a tenth of the price of a prestige competitor for similar results. We also continue to see strong momentum with the Revlon portfolio at Walmart, where consumers appreciate great care tools at accessible price points. Internationally, our businesses performed well, with sales up almost 5% and all key regions contributing to the positive growth. Home and outdoor outperformed our expectations and grew in all key international markets, driven by expanded distribution and greater collaboration between the brand and sales teams. In the UK, you'll find a dry bar pop-up not only in Boots Battersea in London, but also on board the Harrods Tour Bus as part of an exclusive multi-branded campaign where consumers were treated to a styling. Curlsmith launched in select Sephora and Boots stores in the UK, and Hydroflask expanded into Go Outdoors flagship stores. OXO has expanded at John Lewis Leeds in the UK, has a beautiful pop-up in BHC Marais, one of Paris' most famous department stores in the heart of the city, and expanded its retail footprint in Japan. Osprey is well represented in Germany with a large display at Sport Schuster, Munich's leading sporting goods retailer. These are just a few examples of how we are increasing our global footprint. Stepping back, I remain confident that the reset and revitalized building blocks we discussed last quarter will prove to be a solid foundation for the future, but we know that change of this magnitude takes time. We remain committed to our strategic choices, growing our portfolio through consumer obsession, being and winning where our shoppers shop, fully leveraging our scale and assets, and embracing next level data and analytics in everything we do. We are making significant progress on the road back to sustainable long-term top-line growth, and you heard evidence of that today. I want to thank our exceptional global associates across Helen of Troy for their dedication and passion for our company and brands. Now I will turn it over to Brian.