Helen of Troy (NASDAQ: HELE) reported Q1 EPS of $2.53, $1.05 better than the analyst estimate of $1.48. Revenue for the quarter came in at $420.84 million versus the consensus estimate of $345.81 million.

Executive Summary – First Quarter of Fiscal 2021

• Consolidated net sales revenue increase of 11.8%, including:
  • An increase in Leadership Brand net sales of 15.7%
  • An increase in online channel net sales of approximately 33%
  • Organic business net sales growth of 11.1%
  • Core business net sales growth of 12.2%
• GAAP operating income of $57.0 million, or 13.5% of net sales, compared to GAAP operating income of $47.2 million, or 12.5% of net sales, for the same period last year
• Non-GAAP adjusted operating income increase of 19.8% to $71.1 million, or 16.9% of net sales, compared to $59.3 million, or 15.8% of net sales, for the same period last year
• GAAP diluted EPS of $2.37, compared to GAAP diluted EPS of $1.61 for the same period last year
• Non-GAAP adjusted diluted EPS increase of 22.8% to $2.53, compared to $2.06 for the same period last year
• Net cash flow provided by operating activities of $92.8 million, compared to $15.7 million for the same period last year
• Non-GAAP free cash flow of $86.4 million, compared to $12.0 million for the same period last year

Julien R. Mininberg, Chief Executive Officer, stated: “We are pleased to announce excellent first quarter results. Our diversified portfolio performed well and again demonstrated its resiliency. I could not be prouder of how our organization adapted quickly to navigate successfully in what is arguably the most challenging business environment most of us have ever seen. During the quarter we delivered consolidated net sales growth of 11.8% and adjusted diluted EPS growth of 22.8%. Our Health & Home segment led the way with sales growth of 29%. Beauty and Housewares both held up very well in the face of many store closures and the unprecedented level of unemployment and personal disruption due to COVID-19. Beauty sales grew 5% including Drybar. Housewares declined only 3% off of a year ago base that grew 23% year over year. International performance was a standout in the quarter, growing faster than consolidated sales. Sales for our Leadership Brands grew 15.7%. Online sales grew significantly to now represent approximately 28% of consolidated sales as so many of the world's consumers shifted more of their purchases from bricks to clicks.”

Mr. Mininberg concluded: “While we are pleased with our first quarter results, the net impact of the pandemic on our consumers and supply is still very fluid and uncertain and, as a result, we will not be providing fiscal 2021 guidance at this time. Despite the uncertainty, we are generally encouraged by the current trends and prospects for our business and are therefore using the strength from the first quarter to lean back in on many of the key initiatives chosen to further help us deliver on our Phase II Transformation goals. We believe we have struck the right balance between the uncertainties of the external environment and our strong commitment to doing what is bold and right for executing the strategic choices underlying our multi-year trajectory of transformation.”

Fiscal 2021 Business Update

Due to the evolving COVID-19 pandemic and related consumer and business uncertainty, the Company is not providing an Outlook for fiscal 2021 at this time. During the first quarter of fiscal 2021, as part of a comprehensive approach to preserve its cash flow and adjust its cost structure to lower expected revenue, the Company implemented a number of temporary precautionary measures in response to the uncertainty from COVID-19. Based on the strong performance in the first quarter, we are now lifting some of these measures, and making selective investments in key Phase II Transformation initiatives and key hires we believe will help drive our value creation flywheel. The Company’s view of the Phase II transformation plan and the longer-term opportunities management sees to further grow its business remains unchanged.

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