EL PASO, TX – Helen of Troy Limited, a global designer, developer and marketer of branded consumer products for home, outdoor, health, wellness and beauty, based in El Paso, Texas, announced that it expects to reduce its global workforce by up to 10% by 2023.
As part of Pegasus’ focus on streamlining and simplifying the organization, the company announced three major changes to its organizational structure.
The first change is to combine the Beauty and Health & Wellness businesses into a single segment that will be reported and referred to as “Beauty & Wellness.” The second is the creation of a Regional Market Organization for North America, responsible for sales and marketing strategies for all categories and channels in the United States and Canada.
The third restructuring corresponds to a greater centralization of certain functions in shared services, especially in Operations and Finance to better support the business segments and RMOs. The new structure will reduce the size of the global workforce by approximately 10%.
Most of the reduction in functions will be completed by March 1, 2023. In addition, almost all of the remaining function reductions are expected to be completed before the end of fiscal 2024. The company reported that these changes better focus business segment resources on brand development, consumer-focused innovation and marketing, RMOs on sales and go-to-market strategies, and shared services in their respective areas of expertise, while creating a more efficient and effective organizational structure.
Consolidated net sales revenue was $558.6 million, down 10.6% from FY2022, down 12.4% from FY2021 and up 17.7% from FY2020.
Net sales from core activities decreased 10.0% from fiscal 2022, 9.6% from fiscal 2021 and 23.9% from fiscal 2020.
“Although the operating environment remained challenging, our third quarter financial results exceeded our expectations. Gross margin and cash flow improved significantly during the quarter, and our efforts to reduce inventory have resulted in inventory levels that are now below where we ended last fiscal year. So far this fiscal year, core net sales are up 33.1% on a three-year basis over the pre-Covid FY2020 baseline. In those same nine months, core adjusted diluted EPS is up 6.6% on a three-year stack, despite the negative impacts this fiscal year of inflation, higher interest rates and lower operating leverage,” said Julien R. Mininberg, CEO.
Home & Outdoor net sales revenue decreased $17.2 million, or 7.0%, to $228.9 million from $246.1 million. The decline was due to a decrease in the organic business of $57.3 million, or 23.3%, primarily due to lower sales related to lower consumer demand driven by changes in consumer spending patterns and lower retail customer orders due to higher trade inventory levels, the unfavorable comparative impact of earlier-than-usual customer orders in the third quarter of fiscal 2022.
For Health & Wellness, net sales revenue declined $23.4 million, down 11.5%, to $180.5 million from $203.9 million. The decline was due to a decrease in the organic business of $22.0 million, or 10.8%, primarily due to lower sales of thermometrics, seasonal categories, water filtration and air filtration products, primarily due to lower consumer demand, changes in consumer spending patterns and reduced retail customer orders due to higher commercial inventory levels.
Beauty net sales revenue declined $25.7 million, or 14.7%, to $149.2 million from $174.8 million. The decline was due to a decrease in the organic business of $36.2 million, or 20.7%. The decline in the organic business was primarily due to lower sales in the hair appliances category driven by lower consumer demand, changes in consumer spending patterns and reduced retail customer orders due to higher commercial inventory levels, the unfavorable comparative impact of earlier-than-usual customer orders in the third quarter of fiscal 2022 as retailers accelerated orders to try to avoid supply chain disruptions during the prior year’s vacation season, and a decline in non-core business net sales revenue due to the sale of the Personal Care business.
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