Hydro Flask Again Propels Parent Co. to Q1 Earnings Gain
Sales of Hydro Flask products outpaced all results for parent company Helen of Troy Ltd. and helped propel it to another quarterly earnings gain, the company reported today.
Hydro Flask is one of two companies in HOT’s Housewares division, where net sales increased by 18.9%, the company said.
Those results reflect incremental distribution with existing domestic customers, an increase in online sales, new product introductions for both the Hydro Flask and OXO brands, an increase in sales into the club channel, an acceleration of Hydro Flask orders by retailers in advance of the Hydro Flask integration into the Helen of Troy ERP system, and international growth.
Segment net sales also benefited from the favorable impact of net foreign currency fluctuations of approximately $0.4 million, or 0.4%.
These factors were partially offset by lower store traffic and soft consumer spending at certain traditional brick and mortar retailers. GAAP operating margin was 18.9% compared to 18.2%.
The increase in operating margin is primarily due to a higher mix of Hydro Flask sales at a higher operating margin, lower overall advertising expense, improved distribution and logistics efficiency, and the favorable impact of increased operating leverage from net sales growth.
These factors were partially offset by unfavorable margin impact of sales into the club channel and the impact of restructuring charges.
Segment adjusted operating income increased 29.9% to $25.4 million, or 21.7% of segment net sales, compared to $19.6 million, or 19.8% of segment net sales, in the same period last year.
For the quarter, the company also reported:
- Consolidated net sales revenue increase of 9.0%, including:
- An increase in Leadership Brand (including Hydro Flask) net sales of approximately 14.7%
- An increase in online channel net sales of approximately 30.3%
- Core business growth of 7.9%
- GAAP operating income of $43.3 million, or 12.2% of net sales, which includes $1.7 million in restructuring charges, compared to $30.6 million, or 9.4% of net sales, which included $4.0 million in pre-tax non-cash impairment charges, in the same period last year
- Non-GAAP adjusted operating income growth of 30.4% to $55.5 million, or 15.6% of net sales, compared to $42.6 million, or 13.1% of net sales, in the same period last year
- GAAP diluted EPS from continuing operations of $1.43, which includes $0.06 per share of restructuring charges, compared to GAAP diluted EPS from continuing operations of $1.00 in the same period last year, which included $0.13 per share of impairment charges
- Non-GAAP adjusted diluted EPS from continuing operations growth of 32.6% to $1.87, compared to $1.41 in the same period last year
- Net cash provided by operating activities declined $10.9 million primarily due to a $15 million settlement payment made during the quarter
- Repurchased 407,025 shares of common stock in the open market during the quarter for $37.1 million