Helen of Troy, the parent of Osprey and Hydro Flask, is undergoing three organizational changes and shrinking its global workforce by about 10 percent, with most staff reductions completed before March 1. Most notably, the group has decided to merge its Health & Wellness and Beauty segments, centralize its global shared services for operations and finance, and create a North American regional market organization. 

In the third quarter ended Nov. 30, the Home & Outdoor segment sales declined by 7 percent to $228.9 million year-over-year despite a $43.3 million quarterly contribution from Osprey that had strong results across Europe. The backpack brand is forecast to generate $180 to $185 million in annual sales this FY. Hydro Flask, meanwhile, retained its top position at a large online retailer where its sales nearly doubled during the Black Friday to Cyber Monday (Nov. 25 to 28) period but had a broad point-of-sale decline in brick-and-mortar stores. 

For the entire Helen of Troy group, second-quarter revenues fell by 10.6 percent to $558.6 million from $624.9 million. Operating income declined by 14.3 percent to $77.2 million from $90.0 million as the gross margin rose by 210 basis points to 45.9 percent from 43.8 percent. Net income slid by 31.5 percent to $51.8 million from $75.7 million. 

The group’s current FY23 outlook estimates a consolidated net sales range of $2.025 to $2.050 billion, suggesting a year-over-year decline of 7.8 to 8.9 percent. Home & Outdoor annual net sales are forecast to expand by 2.5 to 3.5 percent, with Osprey contributing $180 to $185 million to the total. 

“[…] We see Fiscal ’24 as a transition year,” CEO Julien Mininberg told analysts. “From a macro standpoint, we see a very challenging near-term economic backdrop. […]The faster we secure our [Pegasus] efficiencies, the more that we can invest in accelerating revenue growth and building market share for our most promising brands.” Helen of Troy announced a restructuring plan called Project Pegasus in August 2022 that calls for annualized savings of $75 million to $85 million.