Q4 2023 Helen of Troy Limited Earnings Call
Speaker 1: Before I turn the call over to Mr. Minnenberg, I would like to inform all interested parties that a copy of yesterday's earnings release has been posted to the investor relations section of the company's website at www.HelenofTroy.com. The earnings release contains tables that reconcile non-GAAP financial messages and
Speaker 2: Thank you, Jack. Good morning, everyone, and thank you for joining us. We have a lot to share with you today. I will start with a few comments on the CEO succession plan for 2024 and recent changes at the CFO level, then turn to the business results we posted yesterday.
Speaker 2: we are making on Project Pegasus, provide more detail on segment performance, and touch on how we are approaching our next multi-year strategic plan. Brian will comment on our fourth quarter results, financial position, and on our fiscal 24 outlook.
Speaker 2: February 2024 when the term of my employment agreement is set to expire.
Speaker 2: The board has appointed Noelle Jafois to succeed me as CEO .
Speaker 2: This timing provides continuity through the end of this fiscal year.
Speaker 2: MARC 2024 will mark the end of Phase 2 of Helen of Troy's transformation plan, as well as 10 years in the CEO role, and 34 years in the consumer products industry.
Speaker 2: It will be my turn to slow down, at least a bit, spend more time with my family, and focus on some personal priorities.
Speaker 2: I will be working closely with Noel as we execute our transition plan.
Speaker 2: As it relates to my board service, the nominating committee will finalize the full slate of nominees for public disclosure when our proxy is filed in June .
Speaker 2: I do expect to stand for re-election at our annual general meeting of shareholders, which is in August .
Speaker 2: My 2020 employment agreement calls for my resignation upon retirement for standard practice.
Speaker 2: There is no current plan beyond that date.
Speaker 2: The board and I believe the company will be in excellent hands under Noelle's leadership. She has proven herself as COO, including her leadership of Pegasus, and is already providing a further step up in our brand building and go-to-market capabilities.
Speaker 2: Over the past year, she has also overseen the work of our Business Segment Presidents.
Speaker 2: C-level operations and IT leaders, and has been learning all aspects of Helena Proy's day-to-day business.
Speaker 2: She brings more than 25 years of outstanding experience across several consumer products businesses and multinational organizations, including Sanofi Consumer Health, Kellogg's, Heinz, and Procter & Gamble. She also brings a track record of creating growth and driving operational excellence in matrix organizations like ours.
Speaker 2: and a passion for building world-class consumer-centric brands.
Speaker 2: She has a reputation as an inspirational leader, making her a natural fit with Helen of Troy's culture.
Speaker 2: Noelle will become the third ever CEO in Helen of Troy's 55 year history when she takes the reins next year.
Speaker 2: The company is well positioned to deliver the next era of sustained growth. Noel is leading the development of the strategic plan for that era.
Speaker 2: As previously announced, we are pleased to welcome back Brian Graff as our interim CFO .
Speaker 2: As many of you will remember, Ryan has made significant contributions to the success of our company, not only during his seven years as CFO , but also throughout his 15-year tenure with Helen of Troy. His leadership, strategic thinking, and outstanding oversight of our finances were highly valued during his many years with the company.
Speaker 2: We welcome having his business insights and leadership back at Helen of Troy while we search for a permanent CFO .
Speaker 2: CFO Matt Osbert for his leadership and contributions to the company during his time as CFO as well as for his service as SVP of Finance.
Speaker 2: strengthened our finance department into an even more capable global shared services team that will continue supporting the company moving forward. Turning now to our business results, we reported better fourth quarter performance than we expected in what has been one of the most unpredictable and challenging years in memory.
Speaker 2: and accelerated our debt pay down.
Speaker 2: With Fiscal 23 marking the fourth year of Phase 2, I believe it is helpful to give some long-term perspective. In song, We Are Proud by The
Speaker 2: Our core net sales grew at a 9.1% KGAR since the phase 2 starting point in fiscal 2019, well ahead of the target set.
Speaker 2: Core adjusted EPS grew at a 6.8% K-Guard during the same period, despite the many challenges of profitability within our industry and in the broader macro environment.
Speaker 2: In fiscal 23, we largely completed our new 2 million square foot state-of-the-art distribution facility in Tennessee. It is now open and has begun shipping to customers.
Speaker 2: Because of its size, its expected efficiency, and its substantial new capabilities, it provides an opportunity to reduce other parts of our distribution center footprint while still providing ample capacity for organic revenue growth and acquisition.
Speaker 2: Its completion will also allow us to return to a more normalized level of capital expenditure in fiscal 24, which we expect will further accelerate our free cash flow and our debt pay down.
Speaker 2: Turning now to Project Pegasus, we acted quickly and well beyond a belt tightening exercise.
Speaker 2: We did this to improve efficiency and address the impacts from the major macro trends of inflation, higher interest rates, and historic levels of retailer inventory rebalancing that challenge fiscal 23.
Speaker 2: Pegasus is on track to deliver its savings objectives.
Speaker 2: Beyond the cost savings from Pegasus, we see the new organizational structure and capabilities we announced in our January call as strategic benefits that will serve as an accelerator to top and bottom line growth.
Speaker 2: I would now like to turn the conversation over to Noel.
Speaker 3: Thank you Julian. I would like to take this opportunity to thank the company's board, Julian, the global leadership team, and our worldwide associates for their confidence, trust, and support. I am deeply honored to become Helen of Troy's next CEO in 2024 with an outstanding portfolio of leadership brands, a passionate team, and many successes during the company's transformation.
Speaker 3: I believe we have a strong foundation for sustainable, profitable growth and long-term value creation. I look forward to working with Julian during the remainder of his tenure to foster a seamless transition.
Speaker 3: Beginning with Project Pegasus, I am pleased with the progress to date across all the workstreams.
Speaker 3: While Pegasus is a multi-year initiative, we expect significant savings benefits to begin in fiscal 24, helping us offset some of our anticipated cost headwinds.
Speaker 3: The new capabilities from Pegasus and go-to-market structure, analytics, operations, and finance are also helping us improve our top line and simplify how we work in Fiscal 24.
Speaker 3: The largest portion of Pegasus savings is scheduled for realization in fiscal 25, and we intend to use that fuel to drive our value creation flywheel by investing in brilliant marketing and innovation to delight consumers, and further enhancing the efficiency and effectiveness of our regional market organizations and global shared services. We continue to look for ways to accelerate the savings that we can reinvest in growth and
Speaker 3: in January , which was to create a North American Regional Market Organization, or NARMO. It captures the benefits of increased focus on sales and go-to-market in the United States and Canada across our full portfolio of brands.
Speaker 3: During the short time since its inception, this newly formed team has identified and in some cases secured significant new distribution across the company's diversified portfolio.
Speaker 3: The NARMO team will continue to identify and capture white space distribution opportunities, leverage our scale and joint business planning, and enhance our ability to win with winning customers.
Speaker 3: The second workstream, WIN, further builds excellence and standardization across our organization by centralizing all aspects of operations under our chief of global operations.
Speaker 3: He now leads all sourcing and supplier relationships across the company and has created a center of excellence with a single approach to demand and supply planning to help improve forecast accuracy and inventory management.
Speaker 3: With inventory reduction a key priority for us in fiscal 23, we exceeded our expectations.
Speaker 3: Continuing to lower inventory in Fiscal 24 will allow us to pay down our debt faster and also help us move more quickly on optimizing our distribution facility footprint.
Speaker 3: Third, we completed a comprehensive bottom-up analysis focused on optimizing our SKU offerings to meet consumer needs while improving profitability and reducing complexity.
Speaker 3: Through this process, we rationalized about 18% of our total SKUs, which we expect to enable us to reduce inventory of less profitable and less productive items, simplify our supply chain and redeploy resources to other opportunities.
Speaker 3: Importantly, we have developed an aligned methodology and automated tools to institutionalize this discipline via an enhanced annual review within our business planning cycle. We have been very careful to balance these benefits with the impact on revenue and market shares.
Speaker 3: Our Fiscal 24 outlook already includes the expected revenue impact this year, and SKU rationalization is one of the drivers of the expected Fiscal 24 margin improvement.
Speaker 3: Fourth, as part of our comprehensive Pegasus plan, we are working to reduce complexity by completing our consolidation, renovation, and warehouse management system upgrades.
Speaker 3: facilities. We expect the new Tennessee distribution facility to progressively take on a larger concentration of our volume throughout fiscal 24.
Speaker 3: It is being built to leverage the successes of the transformation and add new elements.
Speaker 3: We see considerable opportunity to grow the business by further sharpening and investing in our diversified portfolio of brands, enhance our analytical capabilities, leverage the shared services and regional market organizations we have built around the world, and use the new efficiencies and capabilities from Pegasus.
Speaker 3: Allen of Troy, an employer of choice.
Speaker 3: I am leading its development with input and guidance from Julian, and we expect to share it with you before the end of this calendar year.
Speaker 3: I would like to now turn to our fourth quarter business results. Coronet sales declined 16.2% and Cora adjusted diluted EPS declined 19.9% in the fourth quarter. Starting with home and outdoor, total sales were up 0.5% in the quarter ahead of our expectations.
Speaker 3: This included a full three-month contribution from Osprey compared to two months in the prior year period.
Speaker 3: For both the quarter and the full fiscal 23, Osprey outperformed our expectations.
Speaker 3: The brand benefited from strong e-commerce replenishment after the holiday period, the rebound in travel, and good international growth compared to the prior year period. We caught up on inventory and are now much more able to meet demand compared to the fourth quarter of last year, when COVID-related factory closures curtailed our supply.
Speaker 3: POS trends for Osprey were positive in the quarter, and we anticipate that our better inventory position will positively impact the brand's performance in the three key categories of technical packs, travel packs, and everyday packs in fiscal 24.
Speaker 3: levels as the overall home category continued to slow.
Speaker 3: Key drivers of this were normalization of demand from COVID highs and inflationary shifts in consumer spending toward necessities and services.
Speaker 3: Importantly, Total POS for OXO remains solidly ahead of pre-pandemic levels, highlighting the continued desirability of the brand.
Speaker 3: Inventory in the trade is healthier with weeks on hand down significantly from a year ago for those retailers where we have visibility.
Speaker 3: We have a strong pipeline of innovation supported by engaging marketing to drive incremental sales from new categories in Fiscal 24. One example is our new refrigerator organization system designed to bring order to your fridge with smart shelf enhancers and clear modular bins.
Speaker 3: to let you find food items easily so you can enjoy them before they spoil. With food prices what they are, finding more ways to save money is really resonating with consumers. Hydroflask takes pressure in the quarter from overall softness in the insulated bottles category. Consumer preferences are critical for times when workers and customers experience health conditions.
Speaker 3: shifted away from bottles where Hydro Flask is by far the leader to tumblers where the brand has a smaller presence.
Speaker 3: Similar to OXO, inventory in the trade is now healthier. Looking ahead, we see a number of opportunities to drive sales in Fiscal 24 and beyond.
Speaker 3: The automation in our new DC gives us significantly more capabilities to customize Hydroflask bottles, mugs, and other items for direct-to-consumer as well as corporate promotion and gifting.
Speaker 3: Consumers will also see new collections as well as new colors and limited-edition bottles.
Speaker 3: The soft coolers category also provides a growth opportunity for us. We are leveraging the strong consumer reception to Hydroplastic in that category to gain additional distribution at key retailers and expect us to drive incremental sales in fiscal 24.
Speaker 3: The rulers category also provides a growth opportunity for us. We are leveraging the strong consumer reception to hydroplastic in that category to gain additional distribution at key retailers and expect this to drive incremental sales in fiscal 24. Coming now to beauty and wellness.
Speaker 3: In our beauty portfolio, we continue to retain our strong market share position amidst the broader category decline in hair care appliances, widely reported by retailers and syndicated market measurement data.
Speaker 3: Prestige Beauty remained a strong suit for us, with top customer point-of-sale data showing growth on CurlSmith and Drybar appliances and liquids during the quarter.
Speaker 3: Curlsmith contributed sales of $9 million in line with raised expectations for the fourth quarter and the full year we mentioned in the January call.
Speaker 3: We expect to see continued growth in these Prestige brands in fiscal 24 behind new products like Drybar Curl Party Heated Curling Round Brush, Final Call Frizz, and Static Control Mist, as well as Effortless Wave from Curlsmith.
Speaker 3: We have also enhanced our investment and proven in-store events and education across both brands.
In addition, we recently announced our Hot Tools brand is expanding into liquids with its new Protect and Style collection that just launched at Ulta in fiscal 24. Heat protection and styling aids are both top consumer needs, especially for those using hair appliances.
This initiative is a great example of platforming as the Hot Tools product formulation leveraged capability from our already established Prestige liquid team.
Turning to our wellness portfolio, we faced a tough comparison to strong thermometer and humidifier category demand driven by last year's Omicron surge and post-COVID normalization.
The elevated demand we discussed in January softened as the season peaked earlier than we have seen historically.
Despite overall category declines, Helen of Troy's U.S. market shares remain strong in thermometers, inhalants, and humidifiers, with the number one position among branded products in all three of these categories.
over the 12 month period covering our fiscal 23. VIX is number one in total thermometry and in digital thermometry, and is also number one in the high margin and hailing category. Braun is number two in total thermometry and number one in both ear and non-invasive thermometry.
Last, on the international front, we achieved growth in net sales driven primarily by the contribution of OXO and Osprey as replenishment orders in select brick and mortar partners made progress towards normalizing in line with POS.
Braun outperformed our expectation as we were able to partially overcome continued supply shortages to help meet the increased thermometer demand in EMEA and Asia.
Let me now turn the call back to Julian to discuss our Fiscal 24 key themes and outlook.
We now turn the call back to Julian to discuss our Fiscal 24 key themes and outlook. Thank you, Noel.
Two of the most important pieces of news in the Fiscal 24 outlook we introduced today are that we expect to deliver adjusted EPS growth in the back half of Fiscal 24 and also deliver a major increase in key free cash flow.
We expect to use that cash flow to accelerate debt repayment and reduce our net leverage ratio to two turns or less by the end of fiscal 24. We believe this amount of deleveraging so soon after acquiring Osprey and Curlsmith and so soon after building the new distribution center would be a tremendous testimony to our value creation model.
We also expect to deliver other significant wins in fiscal 24, including operational earnings growth, expanded gross margins, and expanded adjusted operating margins.
As our acquisitions and Pegasus pick up steam, we expect our gross margins to increase significantly in fiscal 24. We believe this will come from sweetening our mix with more sales from Hydroplast, Vix Inhalants, and Prestige Beauty Liquids, in addition to the benefits from lower freight rates and SKU rationalization.
consumers and several of our categories will continue to experience considerable macro financial pressure. Our sales assume inflation and higher interest rates will continue to challenge consumers, resulting in continued softness in many of the categories where we compete.
Finally, in Fiscal 24, we will continue to advance our ESG priorities and initiatives.
We have now completed key objectives under the first stage of our ESG roadmap, including setting our emission reduction targets.
These have been approved by the Science-Based Targets Initiative. To support our environmental and social commitments, we are members of key packaging and recycling organizations such as the New Plastics Economy and How to Recycle, as well as supplier engagement organizations such as CDP's Supply Chain Program. In addition to our corporate initiatives, our brands continue to distinguish themselves on environmental stewardship.
Those initiatives, as well as others, will be detailed in our third annual ESG report, which we expect to release in June .
And now, I would like to turn the call over to Brian . Thank you, Julian. Good morning, everyone. It's great to be back with everyone today. I'm looking forward to reconnecting with many of you over the coming days and weeks.
I'm grateful for the opportunity to come back to Helen of Troy and work with such a dedicated team of associates and friends.
I'm also grateful for the opportunities that I see in front of the company, and I intend to do everything I can to maximize them during my time here. I will touch on some of these opportunities later in my discussion of our outlook for Fiscal 24 and beyond. We just navigated a difficult year, but I believe we have emerged an even stronger, better structured, and more integrated operating company poised to reaccelerate the flywheel.
Before I begin, I want to recognize and thank Matt Osberg for all he has done for the company over the last seven years and for helping me transition back into the interim role. Matt, it's hard for me to express how much I've appreciated your support then and now. You will be missed, but I'm proud of you and I'm happy for you and your family.
With that, I would like to start with an overview of our fourth quarter results.
With that, I would like to start with an overview of our fourth quarter results, then provide an update on Project Pegasus.
and then discuss our outlook for Fiscal 24 and beyond. Before I do, please note that in line with the changes in our business structure and our financial reporting, I will be discussing results for our two reportable segments, beauty and wellness and home and outdoor. You can find recast quarterly historical financial information for the past three fiscal years on a two segment basis in the earnings release we issued after the market closed yesterday. As Julian mentioned, the fourth quarter was above our sales and earnings expectation.
into the fourth quarter of last year as retailers accelerated orders in advance of price increases.
These factors were partially offset by an increase in prestige, personal, and hair care sales, customer price increases related to rising freight and product costs, as well as one additional month of Osprey sales, and a three-month contribution from the Curl Smith acquisition.
Stepping back to look at the full year, fiscal 23 core business revenue is significantly higher than our pre-COVID base with a 3-year CAGR of 8.7%.
While this includes some impact from acquisitions, it also includes remarkable macro challenges and shifts in the consumer landscape. We believe that with the work we have done related to acquisitions, divestitures, distribution capability investments, portfolio enhancement, and organizational restructuring over the last three years.
People position us to use all the levers of our flywheel once again with an underlying engine that has greater horsepower. Gap consolidated operating margin for the quarter was 11.1 percent of net sales compared to 8.7 percent in the same period last year.
We were pleased to expand adjusted operating margin by 130 basis points to 13.8% despite unfavorable operating leverage.
The primary drivers of this improvement were a decrease in incentive compensation expense.
lower outbound freight costs, the favorable impact of the Crowsmith acquisition,
rate costs, the favorable impact of the Crowsmith acquisition, and decreased marketing expense.
These factors were partially offset by the unfavorable operating leverage I just mentioned, higher inventory reserves, a less favorable product and channel mix within home and outdoor, and a less favorable product mix in wellness. On a segment basis, the
Home and outdoor adjusted operating margin increased 400 basis points to 17.1%, reflecting the impact of pricing actions, lower incentive compensation expense, and lower inventory reserves.
declines similar to the overall segment.
Net income was $36.2 million or $1.50 per diluted share. non-GAAP adjusted diluted EPS decreased 19.9% to $2.01 per diluted share primarily due to higher interest expense and lower adjusted operating income.
a significant improvement both sequentially and year-over-year.
demand, significant retailer inventory corrections, and our acquisitions of Osprey and Curlsmith. We expect a further lower inventory to $400 million or below by the end of Fiscal 24. On a full year basis, we generated operating cash flow of $208.2 million.
and CapEx toward our new distribution facility, which is now in operation.
We ended the fiscal year with total debt of $934.4 million, a sequential decline of approximately $146 million.
In fiscal 23, our debt covenants allowed for up to $363 million of additional debt. However, a key focus for fiscal 24 is to continue to reduce inventory, fine tune other working capital components, and use our strong cash flow to further pay down our debt.
As of the end of fiscal 23, we have significantly reduced our exposure to interest rate volatility by swapping $425 million of our outstanding variable rate debt to fixed rates that are favorable to current market rates.
I will cover our Fiscal 24 Free Cash Flow, Debt, and Leverage expectations later in my discussion of our outlook.
As Noel shared earlier, we made good progress on our Pegasus initiatives. We are using Pegasus to create greater operating efficiency.
a more effective go-to-market structure, expand our margins, and provide a platform to fund step-level increases in growth investments and better leverage our scale.
We remain on track to achieve our Fiscal 24 total savings and timing targets with significant additional savings expected from lower inbound freight costs.
Now, turning to our outlook for fiscal 24.
We expect consolidated sales between $1.965 billion and $2.015 billion in fiscal 24.
This implies a decline of 5.2% to 2.8%, which includes a year-over-year decline of $35 million, or 1.7% from the removal of Bed Bath and Beyond revenue from our outlook.
and a similar size reduction from our Pegasus SKU rationalization initiative, primarily impacting beauty and wellness.
Our sales outlook reflects what we believe will be a continued slower economy and uncertainty in consumer spending patterns as shoppers seek to prioritize value, especially for discretionary categories in this inflationary environment. The likelihood, timing, and potential impact of a significant or prolonged...
We do not anticipate a repeat of the significant de-stocking that took place last year and anticipate that sell-in will more closely match sell-through this fiscal year. Before I go into the segment expectations, I mentioned earlier that we removed any risk related to bed bath and beyond from our revenue outlook.
As it relates to our balance sheet, our current accounts receivable balance is approximately $2.9 million, and our preliminary estimate of what might be considered preferential payments is approximately $1 to $1.5 million.
Turning back to our net sales outlook by segment, we expect a home and outdoor decline of 1.7% to growth of 1% and a beauty and wellness decline of 8% to 5.8%.
We expect consolidated gap diluted EPS of $3.98 to $4.84, which includes estimated restructuring charges of $2.75 to $2.43. We expect consolidated non-gap adjusted diluted EPS in the range of $8.50.
to $9, which implies a consolidated decline of 10.1% to 4.8%. Our adjusted diluted EPS outlook includes an increase in interest in depreciation expense totaling approximately $0.91 net of tax or a 9.6% growth headwind. At the high end of our range, we expect gross margin to expand approximately...
expected to grow 2.6% and margin is expected to expand by 80 basis points.
Consolidated Adjust Adiba does, expected to grow 6.3% and margin is expected to expand 150 basis points at the high end of our range, despite incremental incentive compensation expense of approximately $27 million year over year.
which represents an 8.2 percent growth headwind and 135 basis point margin headwind. Our outlook for operational earnings growth is driven by a better overall margin mix, lower commodity and inbound freight costs, and cost savings from Pegasus. We expect Pegasus to be a force multiplier.
with benefits in Fiscal 24 to include initial cost savings, organizational and go-to-market effectiveness, more efficient and effective marketing spend, and the optionality to consider opportunistic incremental growth investments during the year. We continue to expect Pegasus to generate savings of approximately $20 million in Fiscal 24.
with additional savings expected from lower inbound freight and commodity costs. The benefits from inbound freight and commodity costs are generally expected to be realized in the second half of our fiscal year as we move through the cycle of turning inventory through cost of goods sold. As previously discussed, the Pegasus savings will partially offset several structural headwinds in the next few months.
expected expense at target performance and higher interest expense of approximately $15 million before tax as we annualize the increase in interest rates in fiscal 23.
This includes our expectation of an incremental rate increase of 100 basis points in fiscal 2024.
We expect a fiscal 24 gap effective tax rate of 19 to 21 percent and an adjusted effective tax rate of 13.1 percent to 13.2 percent.
We do not expect a meaningful impact in fiscal 24 from currently proposed tax legislation changes by the Biden administration or international regulators.
At this stage, it is still unclear what domestic and global tax laws will be passed, in what form and on what timing.
We will continue to assess the impacts as proposed legislation is considered and keep you updated. In terms of the quarterly cadence, we expect the majority of our net sales growth to be concentrated in the third quarter of fiscal 24.
We expect net sales to decline approximately 9% to 7% in the first quarter and 7% to 5% in the second quarter.
We expect adjusted diluted EPS growth to be concentrated in the third and fourth quarters of Fiscal 24, as we benefit from lower inbound freight and commodity costs, as I mentioned earlier. We also expect to realize the benefits of debt deleveraging more fully in the second half of the year. Accordingly, we expect a decline in adjusted diluted EPS growth to be concentrated in the third quarter of the year.
million for the completion of our new distribution facility and the full installation of the state-of-the-art automation equipment.
We continue to expect that the final cost of the facility and its equipment will be within our original expectations.
With lower CapEx needs in fiscal 24, we expect free cash flow to be in the range of 250 to 270 million, and our net leverage ratio, as defined in our credit agreement, is expected to end fiscal 24 in the range of 2 times to 1.85 times.
With the opening of our new distribution facility, we are in a position to further optimize our footprint, which we believe could unlock an additional $100 to $125 million of cash flow that is not currently included in our outlook.
Looking beyond fiscal 24, we believe we can drive further meaningful performance improvement. Starting with Pegasus, the bulk of the savings are expected to further expand margin and fuel significant growth investments.
Our new organizational structure is designed to increase focus on additional retail distribution, new product innovation, and new product innovation.
distribution facility footprint optimization, and enhanced direct-to-consumer capability. We believe our strong cash flow will allow us to continue to reduce our debt leverage and provide capital deployment optionality.
In summary, turning back to Fiscal 24, we are pleased to provide an outlook that we believe is accretive to our evaluation with strong free cash flow, operational earnings growth and margin expansion, despite unfavorable operating leverage and a challenging consumer environment.
Our adjusted EBITDA outlook at the high end of the range implies an EV to forward EBITDA multiple of 8.4 times using Tuesday's market capitalization and our outstanding debt at the end of fiscal 23. Our free cash flow outlook at the high end of the range implies a forward free cash flow yield.
Thank you.
As I mentioned in the remarks, we're looking forward to the work on the next chapter of the OGSN that I'll be leading. We've got some time together as a leadership team coming up very soon. But as I look at the next multiyear plan for Colin of Troy, I see a lot of the work that
great long-term growth ambitions. You know, it starts with building on the foundations that were set during the transformation. We've got incredible brands. I look forward to working with the team to further sharpen and strengthen the position on each of those brands. I look forward to the fuel that Pegasus is creating to invest even more in new product development and brilliant market.
and the shared services globally. So all of those areas I think will be important drivers of that next chapter and it'll all be built on the outstanding culture and passionate associates that Helena Troy is known for.
Okay, super. And then just one big picture question. I'll jump back in queue as asked. But thinking globally about fiscal 24, obviously some nice guidance there. The question is, you discussed this a little, but I'll try to parse it out. Where are we as it relates to normal?
Whatever that actually is and I'm asking in terms of like revenue headwinds Margin headwinds, you know, we're facing a bunch of each and in little ways I think you said revenue should more closely track POS, but maybe that's a little later So, you know, where are we as it relates to normalization? How long does it take to get there and kind of one other steps are necessary either?
externally, meaning some of your customers, inventories or freight to get back to normal or whatever or whatnot, just in terms of revenue and margins.
Yeah, let's do the parsing thing. I think that's the best way because normal these days is awfully hard to say. I think the simplest way to look at is pre-COVID based because that's when you have a time when there was no pandemic disruption of normalization.
the supply chain disruption, the inflation, the interest rate, those are all things that need to be normalized. So if you start with the pre-COVID phase, as was said in our prepared remarks, if you go back to the beginning of phase two...
You'll see where we started, that's fiscal 19, or Brian gave CAGR's on a three-year basis, which is literally the start of COVID in March of 2020. So as you look at the consumers, as we mentioned in our remarks, we're assuming that the categories will continue to come down towards that trend line. And Noelle in her remarks mentioned the specific categories. So for example, the wellness.