Helen of Troy Limited

Greetings. Welcome to the Helen of Troy Limited's first quarter fiscal 27 earnings call. At this time, all participants will be in listen-only mode. The question and answer session will follow today's formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. At this time, I'll turn the conference over to Anne Rakunas, Director, External Communications. Thank you, Anne. You may now begin.

Thank you, operator. Good morning, everyone. Welcome to Helen of Troy's first quarter fiscal 27 earnings conference call. The agenda for the call this morning is as follows. I will begin with a brief discussion of forward-looking statements. Scott Uzzell, our CEO, will then share his thoughts and areas of focus. And Brian Grass, our CFO, will provide an overview of our financial performance in the first quarter and outline our expectations for the full year fiscal 27. Following our prepared remarks, we'll open up the call for Q&A. This conference call may contain forward-looking statements that are based on management's current expectations with respect to future events or financial performance. Generally, the words anticipates, 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 materially 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 Scott, I would like to inform all interested parties that a copy of today's earnings release can be found on the investor relations section of our website by scrolling to the bottom of the homepage. The earnings release contains tables that reconcile non-GAAP financial measures to their corresponding GAAP-based measures. We've also posted an investor presentation to our website. And with that, I will now turn the conference call over to Scott.

Good morning, everyone. Thank you for joining us. When we last spoke, we laid out our ambition to be a better company on the road to being a bigger company. Today, I want to share our progress on being a better Helena Troy. We are focused on getting closer to the consumer, Sharpening how we run our business, we're starting to see early evidence we're making progress. Our quarter one sales results came in ahead of our expectations across both our business segments. Our margin EPS performance reflect deliberate investment in brands, innovation, and people as we focus on building more consistent, durable enterprise, not just a quarter or two of improvement. While we're encouraged by a solid start to the fiscal year, we remain clear-eyed. This is the first year of a multi-year roadmap, one we laid out for you in April at an April earnings call. We're focused on the work to be done to make Helen Troy reach our potential. The long-term lens is particularly important as we continue to navigate a dynamic operating environment. The consumer remains under pressure, and we're managing through a more volatile cost environment. We're taking disciplined actions to balance near-term margin pressures while positioning the business for the long term. As we've said before, we cannot control the macros, but we can control how we execute within it. And while we're executing well, and where we're executing well, we are winning. Our North America POS, these are track channels. We saw consolidated growth year over year, concentrated in Braun, Osprey, OXO, and Olive in June. On a sequential basis, compared to fourth quarter, trends improved in key areas with the biggest improvement in beauty and wellness. Some brand call-outs include Osprey's Daylight and Transporter Expandable Travel Packs that deliver consumer-relevant solutions, seamlessly converting from a personal item to an airline-approved carry-on. This has differentiated innovation over delivering against financial targets and driving meaningful share gains. OXO successfully extends the brand's award-winning performance and intuitive design into the high-growth pet category. with a range of new products spanning feeding bowls, stands, mats, storage solutions, positioning the brand to capture incremental demand and expanding adjacent categories. Bronze blood pressure monitors launched in mass channels last fall. They combine medical grade accuracy with simplicity. They are outperforming planned and stand out as the only products in the category gaining share at the world's largest mass retailer based in the U.S. and Olive and June launched an out-of-this-world collaboration with Star Wars, the Mandalorian Grogu, bringing consumer collectibles, exclusive and culturally resonant products that elevate the brand and drive engagement at scale. These results reflect a simple point. Brands that deliver meaningful innovation and meet real consumer needs can continue to win, even in a more cautious spending environment. But as we said last quarter, fiscal 27 is about restoring momentum, by focusing on editing and amplifying the priorities and actions of the enterprise by directing our time, capital, and attention toward the highest impact opportunities. Our actions are guided by three pillars. First, consumer first innovation. Second, commercial and operational excellence. Third, our people and culture. As we re-energize our organization, we want to ensure that we have the capabilities to win. Our approach is intentional. who are focused first on strengthening operational discipline and improving how the business runs before we lean more fully in the broader brand acceleration. In Q1, we've made meaningful progress against these priorities that form key elements of our three pillars. Making our consumer centered offense reality. Going from the abstract to how do we make this real? And it's about how we organize and what we do every day. First, we're sharpening how we run the business. Fewer priorities. Thank you. Thank you. This can only happen when leaders live in the cultural space and life of the consumer so they can take consumers to new places. Our new Helena Troy offense will enable this to be a cornerstone of our company of the future. Under this model, we've designated five dedicated segment general managers, each with full ownership of the brand portfolio, including strategy, innovation, commercial execution, and business results. These roles are a mix of internal leaders stepping into expanded roles as well as recruiting external talent to broaden the capabilities of the organization. A deliberate combination that gives us both continuity and fresh perspective without materially increasing operating costs. We've also formalized three geographic or geo-general managers roles to stitch and accelerate brand development beyond the North American borders. It's strategic, it's intentional, and it's focused brand building in the right global markets to better leverage our strong international structure that's already in place. The result is dedicated leaders who live and breathe a focused consumer segment or marketplace rather than balancing competing priorities across multiple brands. We expect this will free up our segment presidents to do what they do best, clear the forest for strategic growth by scaling enterprise solutions, advancing cross-portfolio opportunities, and shaping our long-term strategic agenda. We believe this will result in a company closer to the consumer with sharper ownership, faster decision-making, and the leadership firepower to unlock full potential of our brands. This is the natural next step in the operating model evolution we described last quarter. Second, we're strengthening the fundamentals of our commercial and operational execution. We've identified clear priorities to operate with greater discipline, and we are moving quickly to address them. This starts with pricing discipline. Our previous pricing actions now in place across our major brands are largely holding in the market, though we continue to monitor retailer and consumer response in select areas where elasticity has been higher than expected. A related focus is improving the quality of our revenue, being more deliberate about our product and channel mix, reducing exposure to lower margin channels, and shifting towards higher value products and customers. We are also bringing greater consistency to how we price and promote, ensuring we drive demand in ways that protect brand value. At the same time, we are improving alignment across sales, marketing, and product with a sharper focus on higher impact products and our most important customers. At its core, this work is about bringing greater control and consistency to how we operate across channels and with our customers. In parallel, we're strengthening the core capabilities that enable consistent execution. In e-commerce, we are bringing greater discipline to how we show up across channels, starting with pricing alignment and improving marketplace dynamics. including dressing third-party sellers to create a more consistent presence. We're also continuing to improve our digital shelf and retail media effectiveness, areas where we see meaningful opportunity. In demand planning, we're in the early stages of building a more connected approach to forecasting, improving how we link demand signals, promotional plans, and inventory decisions. And while we're doing all these things every day, we're maintaining a disciplined approach to capital allocation and balance sheet management as we strengthen the foundation of the business. Lastly, we're making progress in how decisions get made. We are simplifying processes, reducing unnecessary complexity, and pushing decision-making closer to the consumer and marketplace. As a result, we're already seeing faster decision-making across the organization. Our brand teams are collaborating more closely on incremental distribution opportunities. Our marketing and product teams are actively deploying test and learn models to try new tactics and measure results before scaling. These changes are fostering a more efficient operating model with clear ownership, one that enables us to act with clarity and control. At the same time, we're continuing to invest our time and resources in growth. Our approach is disciplined. We're targeting areas where we have a clear right to win and where the returns are compelling. A really good or great example of this is in our international business. We plan to accelerate growth by evolving how we go to market, leaning into a more agile, and a hybrid model that pairs strong local partners that know the market with direct consumer engagement with our brands. It's a more flexible approach at helping us move a lot faster, execute better and build stronger connection with consumers as we scale in specific global markets. We'll share more about this later this fall. We're being deliberate in these investments, ensuring that we're aligned with the near-term priorities and our ability to execute. So as we look ahead, our focus remains on execution, on giving you visible markers of progress. We'll have more to share in the coming quarters. To bring it all together, we're encouraged by how the year is starting and the progress we're seeing. Our focus now is staying disciplined, building consistency, and continuing to get better at how we operate. Execution will drive the rest of the year, delivering great problem-solving products, moving on key commercial priorities, and managing through cost volatility. We've still got work to do, but we're headed in the right direction and we're building on a strong foundation to unlock full potential of our portfolio and drive more consistent, long-term growth. With that, I'll turn it over to Brian.