Q2 2025 Helen of Troy Ltd Earnings Call

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Operator: 1025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

Speaker Change: gradings and welcome to the helen of troy second quarter fiscal two thousand and twenty five earnings call at this time all participants are no listen only mode a question and answer session will follow a formal presentation if any one should require operatorourassistance during the conference please press star zero under telephone key pead as a reminder this conference is being recorded i would now like to turn the conference over to your host mr bina mckkey senior vice president of business development and investor relations thank you you may begin

Operator: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Sabrina Mckee: I would now like to turn the conference over to your host, Mrs. Sabrina McKee, Senior Vice President of Business Development and Investor Relations. Thank you. You may begin.

Sabrina Mckee: Thank you, operator.

Sabrina Mckee: Good morning, everyone. I want to welcome to Helen of Troy's second quarter fiscal 2025 earnings conference call. The agenda for the call this morning is as follows.

Bina Mckkey: Thank you, Operator. Good morning, everyone. Welcome to Helen of Troy's second quarter fiscal 2025 earnings conference call. The agenda for the call this morning is as follows. I will begin with a brief discussion of forward looking statements.

Sabrina Mckee: I will begin with a brief discussion of forward looking statements. Ms. Noelle Jafois, the company CEO, will comment on business performance and then provide some perspective on current trends. Then Mr. Brian Grass, the company CFO, will review the financials in more detail and discuss our outlook.

Bina Mckkey: is Noel Geoffroy, the company CEO will come and don't business performance and then provide some perspective on current trends. Then Mr. Brian Grass, the company CFO, will review the financials and more details and discuss our outlook. Following this, we will open up the call for Q&A.

Sabrina Mckee: Following this, we will open up the call for Q&A. This conference call may contain certain forward-looking statements that are based on management's current expectation with respect to future events or financial performance. Generally, the words anticipate, believes, expects, and other similar words are worth identifying. Forward-looking statements are subject to a number of risks and uncertainties that could cause anticipated results to differ materially from the actual results. This conference call may also include information that may be considered non-GAAP financial information. These non-GAAP measures are not an alternative to GAAP financial information and may be calculated differently than the non-GAAP financial information disclosed by other parties.

Bina Mckkey: This conference call may contain certain forward-looking statements that are based on management's current expectation with respective future events for financial performance.

Bina Mckkey: Generally the words anticipate, believe, expect, and other similar words are words identifying forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties that could cause anticipated results to differ material from the actual results.

Bina Mckkey: This conference call may also include information that may be considered non-gas financial information. These non-gas measures are not an alternative to gas financial information and may be calculated differently than the non-gas financial information disclosed by other parties.

Sabrina Mckee: The company cautions listeners not to place undue reliance on forward-looking statements or non-GAAP information.

Bina Mckkey: The company caution for listeners not to place undue reliance on forward-looking statements or non-gap information.

Sabrina Mckee: Before I turn the call over to Ms. Noelle Jafois, I would like to inform all interested parties that a copy of today's earnings release and related investment deck has been posted to the company's website at www.hellandoftroy.com and can be found by navigating to the Investor Relations section of the site or by scrolling to the bottom of the homepage. The earnings release contains tables that reconcile non-GAAP financial measures to the corresponding GAAP-based measures.

Bina Mckkey: Before I turn the call over to Ms. Joffloff, I would like to inform all interested parties that a copy of today's earnings release and related investment deck has been posted to the company's website at www.helenoftroy.com and can be found by navigating to the investor relations section of the site or by scrolling to the bottom of the homepage. The earnings release contains tables that reconcile non-gas financial measures to the corresponding gap-based measures. The earnings release contains tables that reconcile non-gas financial measures to the corresponding gap-based

Noelle Jafois: I will now turn the conference call over to Ms. Noelle Jafois. Thank you, Sabrina. Hello, everyone, and thank you for joining us today. I am pleased to report second quarter results that were above expectations. During the quarter, we took decisive actions toward our long-term strategic initiatives, including strengthening the core and further shaping our growth portfolio. In addition, despite persistent macro headwinds, we are generating results on our efforts to reset and revitalize our business, which we believe indicates we are on the right path to improve our operating performance. Through our increasingly-dated driven approach, we continue to see improvement in our brand fundamentals.

Speaker Change: I will now turn the conference call over to Ms. Yofa.

Ms. Yofa: Thank you, Sabrina. Hello everyone, and thank you for joining us today. I'm pleased to report second quarter results that were above expectations.

Ms. Yofa: During the quarter, we took the site's actions toward a long-term strategic initiative, including strengthening the core and further shaping our growth portfolio. In addition, despite persistent macro-headwinds, we are generating results on our efforts to reset and revitalize our business, which we believe indicates we are on the right path to improve our operating performance.

Ms. Yofa: Through our increasingly data driven approach, we continue to see improvement in our ramps on the levels.

Noelle Jafois: Project Pegasus continues to be on track and is generating critical fuel for reinvestment in our brands. This fuel, combined with our sharper brand fundamentals, is leading to stronger marketing with new creative, new, more agile media campaigns, better innovation, and better execution. We are also continuing to grow our distribution. This full year today, we meaningfully grew our US weighted distribution by 9% year-over-year, making our brands increasingly available where our shoppers shop. All of these efforts contribute to improve market share performance, with eight of our key categories growing or maintaining share this fiscal year today in our US Desert Channel.

Ms. Yofa: Project Pegasus continues to be on track and is generating critical fuel for reinvestment in our brands.

Ms. Yofa: This fuel, combined with our sharper brands on the metal, is leading to strong remarketing with new creative, new, more agile media campaigns, better innovation and better execution.

Ms. Yofa: We are also continuing to grow our distribution. This year today, we meaningfully grew our U.S. weighted distribution by 9% year over year, making our brands increasingly available where our shop or shop.

Ms. Yofa: All of these efforts contribute to improve market share performance with eight of our key categories growing or maintaining share this fiscal year today and our U.S. measure of channels.

Noelle Jafois: Now to share an update on shaping our portfolio, we have previously shared that we were engaged in an active process to invest in a business. Shortly after the end of the quarter, we opted to pause that process as the office we received are not indicative of the value of the business or its potential. We will continue to consistently evaluate our brands to ensure we position the company for long-term success and growth. Our acquisition strategy remains to look for brands with strong global growth potential. Our financially accretive and meet our better together criteria. We will remain disciplined in our approach to both the investors and acquisition to ensure we are able to deliver on our commitment to increase shareholder value.

Ms. Yofa: Now to share an update on shaping our portfolio, we've previously shared that we were engaged in an active process to develop the business.

Ms. Yofa: Shortly after the end of the quarter, we opted to pause that process as the office we received are not indicative of the value of the business or its potential.

Ms. Yofa: We will continue to consistently evaluate our brands to ensure we position the company for long-term success and growth.

Ms. Yofa: Our acquisition strategy remains to look for brands with strong, global growth potential, our financial e-creatives, and meet our better together criteria. We will remain disciplined in our approach to both debuts to choose and acquisition to ensure we are able to deliver on our commitment to increase shareholder value.

Noelle Jafois: Before I turn to the results for the quarter, I will provide an update on the Cross-Smith and Tennessee distribution center operational issues. As previously discussed, we resolved the cross-Smith ERP integration issues. In the second quarter, we successfully integrated Cross-Smith into our distribution network ahead of plan. With respect to our Tennessee distribution center, I'm pleased to share that we consistently improved our shipping execution and operating efficiency throughout the quarter and have now addressed the root causes of the technology issues we experienced. We are now servicing customers and consumers in line with our expectations and anticipate reaching our productivity goals by the end of the fiscal year, with a continued eye on best-in-class service.

Ms. Yofa: Before I turn to the results for the quarter, I will provide an update on the growth myth and Tennessee Distribution Center operational issues.

Ms. Yofa: As previously discussed, we resolved the cross myth ERP integration issues. In the second quarter, we successfully integrated cross myth into our distribution network ahead of plan.

Ms. Yofa: With respect to our Tennessee Distribution Center, I'm pleased to share that we consistently improved our shipping execution and operating efficiency throughout the quarter, and have now addressed the root cause of the technology issues we experienced.

Ms. Yofa: We are now servicing customers and consumers in line with our expectations, and anticipate reaching our productivity goals by the end of the fiscal year with continued eye on best and class service.

Noelle Jafois: Now let's turn to performance across our portfolio. Overall, we see our home and outdoor performance strengthening; our wellness performance ahead of our expectations; and our international performance remains a bright spot. Our beauty performance was below our expectations for the quarter, but we are taking focused actions to improve the fundamentals of the business and its brands. Starting with Home and Outdoor. Ops of Blue share fiscal year-to-date and core kitchen utensils, a category that we see as largely normalized post-pandemic. The brand achieved strong southward Walmart following the June expansion into 3,200 stores and over five times increased versus the test, with additional distribution coming soon.

Ms. Yofa: Now, it's turned into performance across our portfolio.

Ms. Yofa: Overall, we see our home and outdoor performance strengthening our wellness performance ahead of our expectations and our international performance remains a bright spot. Our beauty performance goes below our expectations for the quarter, but we are taking focused actions to improve the fundamentals of the business and its brand.

Ms. Yofa: Starting with so many outdoor.

Ms. Yofa: Office of British Sheriff fiscal year-to-date in court kitchen utensil, a category that we see as largely normalized post-pandemic.

Ms. Yofa: The brand achieved strong self-aware at Walmart following the Janet Fanchin into 3,200 stores, and over 5 times the increase versus the test, with additional distribution coming soon.

Noelle Jafois: Ops is also gaining momentum in dry food storage with share growth fiscal year-to-date. Ops also continued strong momentum in coffee. Shortly after the end of the quarter, Ops launched our new portable rapid-roar coffee maker, which makes hot coffee or cold brew in five minutes or less. It has already earned positive reviews from Student Line and Consumer Reports. As I will discuss in more detail later, international performance, especially in India, is also strong for OXO. Hi, the class outperformed our expectations and is a key example of brand revitalization across innovation, distribution, and marketing. We still have many areas of opportunity but are encouraged by our meaningful progress across all key focus areas.

Ms. Yofa: Axo is also gaining momentum in dry food storage, which share growth fiscal year today.

Ms. Yofa: After also continued strong lamenting coffee, shortly after the end of the quarter, after launched our new portable rapid-drewer coffee maker, which makes hot coffee or cold brew in five minutes or less. It has already earned positive reviews from food and wine and consumer reports.

Ms. Yofa: As I will discuss the more detail later, international performance, especially in India, it's also strong for oxo.

Ms. Yofa: Hi to this class, I'll perform our expectations and is a key example of brand revitalization across innovation, distribution, and marketing.

Ms. Yofa: We still have many areas of opportunity but are encouraged by our meaningful progress across all keys to this area.

Noelle Jafois: The new travel bottle was launched in the second quarter and provides consumers with the best of both worlds. The utility of fitting in most car cup holders or backpack pockets, and it is leak proof. The new bottle comes with your choice of the HydroQuack slip straw or shoved cap, along with gubbing and carrying straps. Hydroplast also successfully launched into Costco, a key retailer for expanded target consumer. The brand also benefited from strong distribution internationally, with sales up in all key markets. Hydroplast also launched a new brand campaign called "We Make It, UNIT." The campaign celebrates the individuality of the Hydroplast consumer and highlights the broad array of products, configurations, and colors we offer for a wide range of consumer preferences and occasions.

Ms. Yofa: The new travel bottle was launched in the second order and provides consumers with the best of both worlds, utility of sitting in most car cup holders or backpack pockets, and in a leak proof. The new bottle comes with your choice of the Hydroflap Clip Straw or Chubcap, along with the Canadian Karen Straps.

Ms. Yofa: Dr. Grass also successfully launched in the Costco, a key retailer for expanded target consumer. The brand also benefited from strong distribution internationally with sales up in all key markets.

Ms. Yofa: Hi-Grofts also launched a new brand campaign called WeMakeIt, U-O-Met. The campaign celebrates the individuality of the HydroFast consumer, and highlights the broad array of products, configurations, and colors we offer for a wide range of consumer preferences and occasions.

Noelle Jafois: The brand also shows great consumer obsession and marketing agility this quarter by being a part of two relevant cultural moments, Brad Summer and the MTV Video Music Awards. Music artists Charlie XCX launched a Brad album in June with an iconic blind green album cover, leading Gen Z to Chris in the summer as the Brad Summer, which was typified by cool girl style and blind green everything. Hydroplast quickly created a Brad Summer water bottle that we promoted on our social media accounts. Our Instagram post achieved Hydroplast's highest year-to-date engagement rate during a double digit lift and sailed around the post and gained the attention of Charlie XCX, leading to a new partnership for her current concert tour and great overall exposure for the brand.

Ms. Yofa: The brand also shows great consumer obsession in marketing agility this quarter by being a part of two relevant cultural moments. Grab summer and the MTV Video Music Awards.

Ms. Yofa: Music artists, Charlie XCX launched a brat album in June with an iconic line-green album cover, leading Gen Z to Chris and the Summer as the brat summer, which was typified by Cool Girl Style and Line-Green Everything.

Ms. Yofa: HydroFuff quickly created a brass thermal water bottle that we promoted on our social media account.

Ms. Yofa: Our Instagram post achieved Tiger Fath's highest year-to-date engagement race, drove a double digit lift and sailed around the post, and gained the attention of Charlie XDX, leading to a new partnership for her current concert tour, and great overall exposure for the brand.

Noelle Jafois: Our second cultural moment came in late summer when the VMA's Best New Artist winner walked the red carpet and sat in front row with a custom Hydroplast in hand. Social engagement on that post has now eclipsed our Brad Summer post. These are two great examples of moving at the speed of culture, which is critical to driving relevance with our target consumer.

Ms. Yofa: Our second cultural nomad came in late summer when the VMAs best new artist's winner walked the red carpet and sat the front row with a custom hydroflask in hand.

Ms. Yofa: Those who will engage in on that pose to now eclipse our brass summer post. These are two great examples of moving at the speed of culture, which is critical to driving relevance with our target consumer.

Noelle Jafois: Turning to Osprey, the brand is maintaining this leading share in US technical even as that category is often. Osprey continues to extend in exciting new adjacencies. A great example that is rooted in consumer obsession is Osprey's new photography accessory line. After years of consumers asking us for photography gear and extensive research and testing by Osprey, we launched our new photography accessories line in July. The line is built around the an innovative padded camera case to support active photographers and content creators and designed to replace the removable top lid on those backpacks while also offering accessible and protected storage for photo gear.

Ms. Yofa: Turning to Offspray, the brand is maintaining its leading share and US technical path, even out of that category's thought of. Offspray continues to extend in exciting new adjacencies. A great example that is rooted in consumer obsession is Offspray's new photography accessories line.

Ms. Yofa: After years of consumer's asking us for photography gear, an extensive research and testing by Off-Rag, we launched our new photography accessories line in July.

Ms. Yofa: The line is built around the photo lid, an innovative, padded camera case to support access to photographers and content creators, and design and replace the removable top lid on those fat paths while also offering accessible and protective storage for photo gear.

Noelle Jafois: The new line has received strong consumer engagement and a tremendous response from the industry, earning Gear Junkies Best in Show award from the Outdoor Market Alliance Show. In everyday and lifestyle packs, Osprey is having strong success with its daylight line, which is driven by new color designs, Osprey's high-quality materials and durability, and an affordable price point that caters to consumers in the current economic environment. This line continues to offer extended distribution opportunities for the brand.

Ms. Yofa: The new line has received strong consumer engagement and a tremendous response from the industry, earning year-junk youth best and show award from the Outdoor Market Alliance show.

Ms. Yofa: In every day in lifestyle packs, Oxford is having strong success with its daylight line, which is driven by new color design, Oxford is high-quality materials and durability, and an affordable price point that caters to consumers in the current economic environment.

Ms. Yofa: This line continues to offer extended distribution opportunities for the brand.

Noelle Jafois: Now turning to beauty and wellness. Our wellness business performed above our expectations with particular strengths in fans and thermometry. As widely noted by the media, illness rates in the US increased through July and much of August, and both brawn and mixed thermometers saw higher POS. This school year today, while the thermometry category overall has remained relatively flat, Brawn and Vicks have outperformed and gained share. They were made the number one and number two brands in the US, respectively. We also gained new or expanded distribution on Brawn thermometers of CDF, Costco, and Walmart in addition to Brawn blood pressure monitors in Walmart.

Ms. Yofa: Now starting to beauty and wellness.

Ms. Yofa: Our welcome business performed above our expectations with particular strengths and stance and thermometry. As widely noted by the media, illness rates in the US increased through July and much of August, and both brought in next thermometers saw higher POS.

Ms. Yofa: This school year today, while the thermometer category overalls at the main relatively flat, Brian Invicts have out-reformed and gained share. They were made the number one and number two grants in the U.S. respectively.

Ms. Yofa: We also gained new or expanded distribution on bronze monitors at CBS, Costco, and Walmart in addition to bronze blood pressure monitors in Walmart.

Noelle Jafois: In humidification, a lot of category remains soft. The existence maintains its number one share position, and we enter the peak cost, cold, and flu season. Our inventory is well positioned to serve customers and consumers as the season progresses. We also recently added new leadership and fresh perspective to help set this business up for long-term success. I mentioned the new drive our marketing campaign last quarter as an example of where we are evolving our marketing content and targeting with the support of our Marketing Center of Excellence. We began the roll out of that new drive our polyglamorous campaign in July.

Ms. Yofa: In unification, a lot of category remains soft, the existing contains its number one share position. As we enter the peak cough cold and flu season, our inventory is well positioned to serve customers and consumers as the season progresses.

Ms. Yofa: In Waterfield Tradition, we are also seeing positive POS for pure at Walmart where the brand has been growing its presence.

Ms. Yofa: For beauty, we continue to see software POS across the Bramford Folio and are taking actions to revitalize the brand and lean in where we see meaningful opportunities leveraging consumer insights and our new brand building frameworks.

Ms. Yofa: We also recently added new leadership and fresh perspective to help set this business up for long-term success.

Ms. Yofa: I mentioned the new drive-on marketing campaign last quarter as an example of where we are evolving our marketing content and targeting with support of our marketing center of excellence.

Noelle Jafois: This is a bold and fun repositioning of the brand that focuses on drivers more than 80 hair styling products and complementary tools that allow consumers to dabble, tease, and play. The campaign has been very well received, with social media engagement over twice the historic rate. We continue to see market opportunity for our hair products. We are pleased that Curlsmith is gaining market share in the fast-throwing prestige hair liquid category fiscal year to date. This quarter, Curlsmith launched Shake and Shine refreshment, which is crafted to refresh, moisturize, and define curls to extend the result of a wash day.

Ms. Yofa: We began the roll-out of that new drive-our polyglamorous campaign in July. This is a bold and fun refositioning of the brand that focuses on drive-arms more than 80 hair styling products and complementary tools that allow consumers to dabble, tease and play.

Ms. Yofa: The campaign has been very well received with social media engagement over twice the historic race.

Ms. Yofa: We continue to see market opportunity for our shared products. We are pleased the growth of this gaining market share in the fast growing prestige care liquids categories that school year today.

Ms. Yofa: This quarter, Pearl Smith launched Jake and Chine Refresh Myth, which is crafted to refresh, moisterized, and defined Pearl to extend the results of a wash day. In addition, Pearl Smith earned an allure, Beth Beauty of 2024 award for Fritz Control Clemser and Duo Conditioner.

Noelle Jafois: In addition, Curlsmith earned an award-best Beauty of 2024 award for Fris Control Cleanser and Duo Conditioner. Last quarter, we extended our popular drive our liquid glass product line, and we followed that up to this quarter with additions to our thickening line drive our big group. Revlon remains the unit share leader and hot air stylist to school year today, and we have sold three times more Revlon one step volumeizers in the next largest competitive item. This month, we launched a new marketing campaign to appeal to savvy consumers who want salon-quality results without breaking the bank. The value reframe highlights that, on average, Revlon retails for a tenth of the price of a prestige competitor for similar results.

Ms. Yofa: Last quarter, we extended our popular drive-art listen glass product line, and we followed that at this quarter with the dishes to our thickening line drive-art bay through.

Ms. Yofa: Web Lomb remains the unit share leader in hot air files to school year-to-date, and we have filled three times more Revolved on one step line-miders in the next largest competitive item.

Ms. Yofa: This month, we launched a new marketing campaign to appeal to savvy consumers who wants the lawn quality results without breaking the bank. The value-reframe highlights that on average, Revlon Retails were a tenth of the price of a prestige competitor for similar results.

Noelle Jafois: We also continue to see strong momentum with the Revlon portfolio at Walmart, where consumers appreciate great care tools and accessible price points.

Ms. Yofa: We also continue to see strong momentum with the Revlon Profolio at Walmart or consumers appreciate great care tools and accessible price points.

Noelle Jafois: Internationally, our businesses performed well, with sales up on this 5% and all key regions contributing to the positive growth. Home and outdoor outperformed our expectations and grew in all key international markets driven by expanded distribution and greater collaboration between the brand and sales teams. In the UK, you'll find a drive our pop-up not only in boost battery in London, but also on board the hair tour bus as part of an exclusive multi-branded campaign or consumers retreated to a styling. Curlsmith launched and select Sephora and Boot stores in the UK and HydroFlast expanded into Go Outdoors flagship stores.

Ms. Yofa: Internationally, our businesses performed well, will sales up on the 5% and all key regions contributing to the positive growth.

Ms. Yofa: So, many of you are out-performing our expectations and grew in all key international markets driven by expanded distribution and greater collaboration between the brand and sales teams.

Ms. Yofa: In the UK, you'll find the drive-arm pop-up, not only in boot spatter-c in London, but also on board the Herod's tour bus, as part of an exclusive multi-branded campaign, or consumers retreat into a styling.

Ms. Yofa: Curl Smith launched in selects Sephora and boot stores in the UK, and Hyderph Flap expanded into Go Outdoors flagship stores.

Noelle Jafois: Oxo has expanded at John Lewis Leeds in the UK, has a beautiful pop-up in B.H.D. Mahay, one of Paris's most famous department stores in the heart of the city, and expanded its retail footprint in Japan. Osprey is well represented in Germany with a large display of sports hooster, Munich's leading sporting goods retailer. These are just a few examples of how we are facing our global footprint.

Ms. Yofa: Also has expanded at John Lewis Leaves in the UK, has a beautiful pop-up in BHD MAI, one of Paris's most famous department stores in the heart of the city, and expanded its retail footprint in Japan.

Ms. Yofa: Offspray is well represented in Germany with a large display of sports juicer, meaning it's leading, sporting goods retailer. These are just a few examples of how we are increasing our global footprint.

Noelle Jafois: Stepping back, I remain confident that the reset and revitalized building blocks we discussed last quarter will prove to be a solid foundation for the future, but we know that change of this magnitude takes time. We remain committed to our strategic choices, whirling our portfolio through consumer obsession, being and winning where our shopper shop, fully leveraging our scale and assets, and embracing net-level data and analytics in everything we do. We are making significant progress on the road back to sustainable long-term top-line growth, and you heard evidence about today. I want to thank our exceptional Global Associate of Crosse, Helen of Troy, for their dedication and passion for our company and brand.

Ms. Yofa: Depping back, I remain confident that the reset and revitalized building blocks we discussed last quarter will prove to be a solid foundation for the future. But we know that change of this magnitude takes time.

Ms. Yofa: We were made committed to our strategic choices, whirling our portfolio through consumer obsession, being and winning where our shop for shop, fully leveraging our scale and asset, and embracing net-level data and analytics in everything we do.

Ms. Yofa: We are making significant progress on the road back to sustainable long-term top line growth and you heard evidence of that today.

Speaker Change: I want to thank our exceptional global associate's of CROP, Helen of Troy, for their dedication and passion for our company and brains. Now I will turn it over to Brian.

Brian Grass: Now I will turn it over to Brian. Thank you, Noel. Good morning, everyone. I'm pleased to report second quarter results that were slightly above the high end of our expectations for net sales, adjusted ETFs, and adjusted EBITDA. As Noel mentioned, we substantially completed the remediation efforts related to the automation system at our Tennessee distribution facility with minimal impact to sales in the quarter. We believe that we are now in a position to achieve targeted efficiency levels by the end of fiscal 25. We also right sides are cost structure in line with our fiscal 25 net sales expectations while maintaining our planned and incremental growth investment, an increase of approximately 165 basis points year over year in the second quarter.

Brian: Thank you Noel, good morning, everyone. I'm pleased to report second quarter results that were slightly above the high end of our expectations for net sales, the just DTS, and the just of EBITDA.

Brian: As Noel mentioned, we substantially completed the remediation efforts related to the automation system at our Tennessee Distribution Facility with minimal impact of sales in the quarter.

Brian: We believe that we are now in a position to achieve targeted efficiency levels by the end of fiscal 25.

Brian: We also write times or costs structure in line with our fiscal 25 nest sales expectations while maintaining our planned incremental growth investment, an increase of approximately 165 basis points year over year in the second quarter.

Brian Grass: While we know we have more work to do to achieve our long-term goals, we believe these results represent solid progress considering the executional challenges we overcame in the quarter. On that move, on to a more detailed discussion of our second quarter results. Consolidated net sales declined 3.5 percent, slightly ahead of our expectations, as the second quarter sales impact for automation challenges at our Tennessee Distribution Facility were less than originally expected. The sales decrease was primarily due to a decline in beauty and wellness, reflecting lower sales of hair appliances, hair purifiers, and humidifiers, primarily driven by software consumer demand, reduced replenishment from retail customers in a strong competitive environment in hair appliances and hair purification.

Brian: While we know we have more work to do to achieve our long-term goals, we believe these results represent solid progress considering the executional challenges we overcame in the quarter.

Brian: On that move on to a more detailed discussion of our second order results.

Brian: Consolidated net sales decline 3.5% flight me ahead of our expectations of the second quarter sales impact for automation challenges that our Tennessee distribution facility were less than originally expected.

Brian: The selfie crease was primarily due to a decline in beauty and wellness, reflecting lower sales of hair plantas, air purifiers, and humidifiers.

Brian: primarily driven by software consumer demand, reduced replenishment from retail customers in a strong competitive environment in rare appliances and air purification.

Brian Grass: Foment outdoor growth was 1 percent year over year, primarily due to improving trends and also in Hydroplask, partially offset by a slight decline in offspring. Our international business continues to perform well, with sales growth of almost 5 percent. Consolidated growth profit margin was 45.6 percent. The 110 basis point decrease was primarily due to less favorable profits and customer mix within home and outdoor, an unfavorable inventory off the mountain to expand year-over-year. Peter. These factors were partially offset by lower commodity and product costs, partly driven by project Pegasus. The app operating margin for the quarter of 7.3% compared to 9.5% of the same period last year.

Brian: Bowman outdoor group's 1% year-over-year primarily due to improving trends and also in hydroplask, partially offset by flight decline and operating.

Brian: Are you international business continues to perform well with sales growth and almost 5%.

Brian: Consolidated growth process margin was 45.6%. The 110 basis point decrease was primarily due to a less favorable product and customer mix within a home and outdoor and unfavorable inventory of some lessons to expand year over year.

Brian: These factors were partially offset by lower commodity and product costs, partly driven by project segments.

Brian: Got operating margin for the quarter of 7.3% compared to 9.5% in the same period last year.

Brian Grass: On an adjusted basis, operating margin decreased 290 basis points to 9.8%. The decrease was primarily driven by the planned incremental growth investment of 165 basis points I referred to earlier, and to estimate the 85 basis point impacts from additional costs associated with automation start-up issues in our new distribution facility. The coin also reflects the lower growth profit margin and the impact of unfavorable operating leverage. These factors were partially offset by lower overall personnel expense and the lower commodity and product costs I referred to earlier. On a segment basis, Home and Outdoor adjusted operating margin decreased 270 basis points to 15%, primarily due to unfavorable distribution center expense, a less favorable product and customer mix, and planned incremental growth investment.

Brian: On an adjusted basis, operating margin decrease, 290 basis points to 9.8%.

Brian: The decrease was primarily driven by the planned incremental growth investment of a 165-based point, so I refer to earlier, and to next to me that 85-based point impacts from additional cost associated with automation started issues in our new distribution facility.

Brian: The crime also reflects a lower growth profit margin in the impact of unfavorable operating leverage.

Brian: These factors were partially offset by lower overall personnel expense and the lower commodity in product costs are referred to earlier.

Brian: On a segment basis, home and outdoor adjustment operating margin decreased 270 basis points to 15% primarily due to unfavorable distribution center expense, a less favorable product and customer mix, and planned incremental growth investment.

Brian Grass: Adjusted operating margin for beauty and wellness decreased 350 basis points to 4.4%, primarily due to planned incremental growth investment, unfavorable inventory loss and expense year-over-year, and the impact of unfavorable operating leverage. For tax rate, the second quarter was 22%, compared to 17.9% last year. The year-over-year increase was primarily due to the impact of our data tax legislation enacted during the first quarter of fiscal 25, just in the mix of income in our various tax jurisdictions and an increase in tax expense for discrete items. That income was $17 million or $74 cents per diluted share. Non-GAAP adjusted diluted EPS was $1.21 cents per share, reflecting lower adjusted operating income and an increase in the adjusted effective tax rate, partially offset by lower weighted average diluted shares outstanding and a decrease in interest expense.

Brian: Adjusted the operating margin for beauty and wellness, decreased 350 basis points to 4.4% primarily due to planning and criminal growth investment on favorable inventory oscillations expands year over year in the impact of unfavorable operating leverage.

Brian: We're touched by the second quarter of a 22% compared to 17.9% last year.

Brian: The year over your increase was primarily due to the impact of our data tax legislation in active during the first quarter of fiscal 25. Ships in the mix of income in our various tax jurisdictions and an increase in tax expense for discrete items.

Brian: Getting a $17 million or $7.74 per diluted share.

Brian: 9Gap Adjusted Deluded VPS was a dollar and 21 cents per share reflecting over adjusted operating income in an increase in the adjusted effects of tax rate, partially offset by lower weighted average diluted shares outstanding in a decrease in interest expense.

Brian Grass: Pre-cast low was $39.7 million, an increase of $11.7 million year-over-year, but slightly below our expectations for the quarter due to higher working capital needs. We ended the second quarter with total debt of $713 million, a sequential decrease of $35 million compared to the first quarter. Our net leverage ratio was 2.34 times compared to 2.37 times at the end of the first quarter.

Brian: 3 cash flow was 39.7 million and increase up 11.7 million year over year, but slightly below our expectations for the quarter due to higher working capital needs.

Brian: We ended the second quarter with total debt, 713 million, a sequential decrease of 35 million compared to the first quarter.

Brian: Our net leverage ratio was 2.34 times compared to 2.37 times at the end of the first quarter.

Brian Grass: At the end of the second quarter, our board authorized to repurchase the $500 million of our outstanding stock in keeping with our intention to return capital to shareholders, not otherwise deployed for poor business growth or strategic acquisitions. The authorization was approved as part of the board's regular process reviewing their capital allocation and existing authorization.

Brian: At the end of the second quarter, a board off-rise, the repurchase of $500 million of our outstanding stock. In keeping with our intention to return capital to shareholders, not otherwise deployed for four business growth or strategic acquisitions.

Brian: The authorization was approved as part of the board's regular process of reviewing her capital allocation and existing authorization.

Brian Grass: Turning now to our outlook for fiscal 25, we're maintaining our expectations for consolidated net sales, adjusted EPS, and adjusted EBITDA, and have updated our expectations for sales by segment, pre-cast low, and ending net leverage ratio. We remain cautious as external headwinds of increased promotional activity, softer and more variable retail replenishment, and macropressure and uncertainty remain. While the Federal Reserve's move to begin lowering interest rates will likely provide relief for some, we believe that the benefit will take some time to cycle through to many consumers. We also expect a year-over-year headwind from a shorter holiday shopping season between Thanksgiving and Christmas this year.

Brian: Turning now for our outlook for fiscal 25, we're maintaining our expectations for consolidated net sales, adjusted EPS, and adjusted EBITDA, and have updated our expectations for sales by segment, free cash flow, and ending net leverage ratio.

Brian: We remain cautious of external headwinds of increased promotional activity, thought through a more variable retail replenishment and macropressure and uncertainty remain.

Brian: While the Federal Reserve's move to the again lowering interest rates will likely provide relief for some. We believe that the benefit will take some time to cycle through to many consumers.

Brian: We also expect the year over your headmen from a shorter holiday shopping season between Thanksgiving and Christmas this year.

Brian Grass: We continue to expect net sales between 1.885 billion and 1.935 billion, which implies the decline of 6 to 3.5%. This includes the unfavorable impacts and net sales of approximately 8 million due to the shipping disruption from the automation startup issues that are distribution facility in the Christmas ERP integration challenges in the first quarter. In terms of net sales doubled by segment, we now expect a home and outdoor decline of 2.3% to growth of 1.4%, which includes the impact of shipping disruption in our Tennessee distribution facility during the first quarter, and a beauty and wellness decline of 9 to 7.5%, which continues to include a year-over-year headwind of approximately 1% related to the expiration of an out-licensed relationship with respect to one of our wellness brands.

Brian: We continue to expect net sales between 1.885 billion and 1.93 billion, which implies the decline of 6 to 3.5%.

Brian: This includes the unfavorable impact in F-Fails or approximately 8 million due to the shipping disruption from the automation start-up issues that are distribution facility in the Krol Smith ERP integration challenges in the first quarter.

Brian: In terms of our net sales level by segment, we now expect a home and outdoor decline of 2.3% to growth of 1.4%. Which includes the impact of shipping disruption and our Tennessee distribution facility during the first quarter.

Brian: and a beauty and wealthless decline of 9-7.5%, which continues to include a year over a year headwind of approximately 1% related to the exploration of an out-licensed relationship with respect to one of our wellness brands.

Brian Grass: We continue to expect Gap saluted EPS $4.69 to $5.45 for the full year, and non-Gap adjusted saluted EPS in the range of $7 to $7.50, which implies an adjusted saluted EPS decline of 21.4% to 15.8%. We continue to expect full year-adjusted EBITDA of 287 to 297 million, which implies margin compression of approximately 150 to 160 basis points year-over-year, with approximately 50 basis points coming from the automation startup issues that are distribution facility. We continue to incrementally invest back into product innovation and marketing for the long-term health of our business and our brands, and continue to plan for a year-over-year increase in growth investment spending of roughly 100 basis points.

Brian: We continue to expect Yat and move it EPS, $4.69 to $5.45 for the following year.

Brian: and non-gap adjust the validity of EPS in the range of $7 to $7.50 which implies an adjusted validity of EPS decline, a 21.4% to 15.8%.

Brian: We continue to expect full-year adjusted EBITDA of a 287-297 million, which implies marketing compression of approximately 150 to 160 basis points year over year. With approximately 50 basis points coming from the automation startup issues that are distribution facility.

Brian: We continue to incrementally invest back into product innovation and marketing for the long-term health of our business and our brands. We continue to plan for a year-over-year increase in growth and investment spending of roughly 100 basis points.

Brian Grass: We continue to expect some growth margin compression, given our expectation of a more promotional environment and a less favorable sales mix. However, we still expect to expand growth margin year-over-year due to Project Pegasus. Finally, we anticipate lower operating leverage from the decline in revenue, which we expect to be offset by the right side of our cost structure that we began to implement in the second quarter. Our first quarter interest expense outlook included the expectation of two 25 basis point reductions for the remainder of fiscal 25, which now largely aligns with the Fed's 50 basis point reduction in September, and we have assumed no further rate reductions for the remainder of fiscal 25.

Brian: We continue to expect some of those marketing compression given our expectation of a more promotional environment and a less favorable sales mix.

Brian: So ever we still expect to expand those margin year over a year due to project Pegasus.

Brian: Finally, we anticipate lower operating leverage from the decline in revenue, which we expect to be offset by the right side of the New York cost structure that we began to implement in the second quarter.

Brian: The first quarter interest expense outlook included the expectation of 225 basis point reductions for the remainder of fiscal 25, which now largely aligns with the fed 50 basis point reduction in September. And we have assumed no further rate reductions for the remainder of fiscal 25.

Brian Grass: As such, our full-year interest expense expectations remain unchanged. We expect a gap effective tax rate range of 27.3% to 29.5% for the full fiscal year, and a non-gap adjustment effective tax rate range of 20.7% to 21.3%. We now expect capital and intangible asset expenditures of between 32 and 37 million for fiscal 25, which includes remaining equipment and technology of 11 to 12 million associated with our Tennessee distribution facility. We now expect free cash load range of 180 to 200 million, which implies a free cash load yield of 12.7 percent to 14.1 percent using Monday's closing share price.

Brian: That's such, or fully your interest expense expectations remain unchanged.

Brian: We expect a gap affected tax rate range of 27.3% to 29.5% for the full fiscal year and a non-gap except the effect of tax rate range of 20.7% to 21.3%.

Brian: We now expect capital and intangible asset expenditures of between 32 and 37 million for fiscal 25 which includes remaining equipment and technology of 11 to 12 million associated with our Tennessee distribution facility.

Brian: We now expect free cash flow to range up to 180 to 200 million which implies a free cash flow yield of 12.7% to 14.1% using Monday's closing share price.

Brian Grass: Our lower free cash load expectations for fiscal 25 reflect the slower start to the year and revised estimates for working capital and cap tax needs to support the continued improvement in our operating trends and opportunities we see for the remainder of the year. We now expect net leverage ratio, as defined in our credit agreement, to be between 1.9 times and 1.8 times by the end of fiscal 25. In terms of cadence for the third quarter of fiscal 25, we expect a net sale decline in a range of 4.5 percent to 1 percent year over year and adjusted diluted EPS decline in the range of 10 percent to 3 percent year over year.

Brian: Our lower-free cash flow expectations for fiscal 25 reflect the slower start to the year and revised estimates for working capital and tax needs to support the continued improvement and our operating trends and opportunities we see for the remainder of the year.

Brian: We now speak net matter to our show as defined in our credit agreement to be between 1.9 times and 1.8 times by the end of fiscal 25.

Brian: In terms of cadence for the third quarter of fiscal 25, we expect to net sell decline in the range of 4.5% to 1% year over year and adjusted the looted EPS decline in the range of 10% to 3% year over year.

Brian Grass: As we looked toward fiscal 26, we bought it beneficial to provide an update on our efforts to diversify our production outside of China and mitigate the impact of potential incremental tariffs in the future. With the first step of this strategy, we have reduced our exposure to incremental tariffs to a range of 25 to 30 percent of consolidated cost of goods sold. We are now launching the second step of our strategy, which targets a further reduction to our exposure by the end of fiscal 26. We plan to share more of the best-important initiative when we provide our fiscal 26 outlook that is coming equal.

Brian: As we look towards fiscal 26, we bought it beneficial to provide enough data on our efforts to diversify our production outside of China and mitigate the impact of potential incremental tariffs in the future.

Brian: With the first step of this strategy, we have reduced our exposure to incremental tariffs to arrange 25 to 30% of consolidated cost-good souls.

Brian: We are now launching the second step of our strategy, which targets a further reduction to our exposure by the end of fiscal 26.

Brian: We plan to share more of this important initiative and we provide our fiscal 26th album as coming April.

Brian Grass: Finally, I would like to update you in the process to divest one of our businesses. After a thorough and rigorous process that included both strategic and private equity bidders, we have decided to put the process on hold until further notice. We feel the valuation and structure of the offers we received were not reflective of the current health of the brand and future potential of the business. Year-to-date, the business has performed largely in line with expectations. We believe there is potential to further improve its performance. We intend to continue to consistently evaluate our portfolio to ensure our assets position us for long-term success.

Brian: Finally, I'd like to thank you and the process to develop one of our businesses.

Brian: After a thorough rigorous process that included both strategic and private equity bidders, we have decided to put the process on hold until further notice.

Brian: We feel the valuation and structure of the offers we received were not reflective of the current health of the brand and future potential of the business.

Brian: You're the date that business has performed largely in line with expectations. We believe there's potential that further improve its performance.

Brian: We intend to continue to consistently evaluate our portfolio to ensure our assets, positionals for long-term success.

Brian Grass: I am pleased with the progress we are making to reset and revitalize our business in fiscal 25. I believe this will position us well to improve our core and achieve our long-term objectives. Our project Pegasus initiatives are on track and are fueling a step-level increase in brand and innovation investment. We have invested more in data-driven decision-making and capabilities to leverage that investment more efficiently. We will continue to use our free cash load as employee capital using a balanced approach, which we believe can drive significant accretion whether we pay down debt, we purchase our shares, or make strategic acquisition.

Brian: In closing, I am pleased with the progress we are making to reset and revitalize our business in fiscal 25 and believe this will position us well to improve our core and achieve our long-term objectives.

Brian: Project Pegasus Missiones are on track and are fueling a step-level increase in brand and innovation investment. And we have invested more in data-driven decision-making and capabilities to leverage that investment more efficiently.

Brian: We will continue to use our free cash load as a play capital using a balanced approach which we believe can drive significant appreciation whether we pay down debt, we purchase our shares or make strategic acquisition.

Brian Grass: With that, I will turn it back to the operator. Thank you.

Brian: and with that, I'll turn it back to the operator.

Operator: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question. Thank you. You may press star two if you'd like to remove your question from the queue.

Speaker Change: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: In order to allow for as many questions as possible, we ask that you each keep to one question and one follow-up. Thank you.

Speaker Change: In order to allow for as many questions as possible, we ask that you each keep to one question and one follow-up. Thank you.

Peter Grom: Our first question comes from the line of Peter Grom with UBS. Please proceed with your question. Thanks, operator, and good morning, everyone. Hope you're doing well.

Speaker Change: Our first question comes in line of Peter Gromp with UBS. Please proceed with your question.

Peter Gromp: Thanks operator and good morning everyone and hope you're doing well. Maybe my first question was just, you know, I wanted to ask about kind of the quarter and the path from here. You know, maybe just to start, you both outline a lot of great things that are going on across the portfolio. But when you think about the upside in the quarter, is there a way to parse out how much of that was?

Peter Grom: Maybe my first question was just, you know, I wanted to ask about kind of the quarter and the path from here. You know, maybe just to start, you both outlined a lot of great things that are going on across the portfolio. But when you think about the upside in the quarter, is there a way to parse out how much of that was the category coming in better versus maybe some of the actions and innovation you outlined. And then, as we look ahead, you know, what's really embedded from a category perspective it last quarter. I think it was, or it seems you more or less were anticipating what you saw in May was going to hold.

Peter Gromp: The category coming in better versus maybe some of the actions and innovation you outlined. And then as we look ahead, you know, what's really embedded from a category perspective at last quarter.

Peter Gromp: I think it was sort of seemed you more or less weren't anticipating what you saw in May was going to hold. Do you maybe share what's kind of embedded in the outlook today from the category standpoint?

Peter Grom: Can you maybe share what you what's kind of embedded in the outlook today from a category standpoint.

Noelle Jafois: Yeah, hey, thanks, Peter. Great to hear from you. You know, so I would say overall, as we look at kind of the balance of the year and the impact of our performance versus the categories. There's, you know, there's a little bit of both, but I would say, as I highlighted in my remarks, I'm really pleased with some of the performance that we're seeing on some of our brands. You know, we've been hard at work putting brand building frameworks in place, you know, really understanding our target consumer, putting the incremental investment behind the brands. You're seeing a lot of new products come out that I touched on today from the Heiderflask travel bottle, the rapid brewer from OXO, big brew extensions that are performing well, Cross Myth, new products that are coming out to really across the portfolio.

Speaker Change: Yeah, hi, thanks Peter. Great to hear from you. You know, so I would say overall, as we look at kind of bound for the area and the impact of our performance versus the category.

Speaker Change: There's a little bit of those, but I would say as I highlighted in my remarks, I'm really pleased with some of the performance that we're seeing on some of our brands, you know, we've been hard at work, putting grambles in frameworks in place.

Speaker Change: You know, really understanding our target consumer, putting in from that little investment behind the brands, you're seeing a lot of new products come out that I touched on today from the height of five.

Speaker Change: Travel Bottle, the rapid brewer from OXO, big brew extensions that are the performing loud, pro-smiths, new products that are coming out to really crop the portfolio. We've got a lot of new products.

Noelle Jafois: We've got a lot of new products, and they're making an impact, distribution gains or another. I talked about Heiderflask performing and doing well in Costco. We continue to be really pleased with the performance of Oxo and Walmart. And so, you know, I'm pleased that, you know, that we're seeing the results start to come through from the work we've been doing, you know, across all of our portfolio category-wise. You know, I would say it's a mixed bag. We play across a lot of categories.

Speaker Change: and they're making an impact. Distribution gains are another I talked about hydroflask performing in doing well in Costco. We continue to be really pleased with the performance of Oxow and Walmart.

Speaker Change: And so, you know, I'm...

Speaker Change: Please, that, you know, that we're seeing the results start to come through from the work we've been doing.

Speaker Change: You know across all of our portfolio category wise, you know, I would say it's a mixed bag. We play across a lot of categories so we've got some categories where we still see a little bit of softness like a dry food storage, for example, some of the flat down like kitchen utensils, the monitors that mentioned my remarks about a little bit of softness still in technical packs. I would say the outdoor kind of the core outdoor category is still a little bit soft, but we're holding. We're going to share there on your share in technical packs.

Noelle Jafois: So we've got some categories where we still see a little bit of softness, like drive food storage, for example, some of flat down, like kitchen utensils, the monitors that mentioned my remarks, flat down, a little bit of softness still in technical packs. I would say the outdoor kind of the core outdoor category is still a little bit soft, but we're holding share there or leadership share in technical packs. So, you know, if I was going to attribute it to anything, I'd say, you know, our performance is improving.

Speaker Change: So, you know, if I was going to attribute it to anything, I'd say, you know, our performance is improving.

Brian Grass: Nice to start, Peter, that in terms of assumptions for the remainder of the year, we do attempt to update our category view every quarter. And we did do that, but I would say it was very similar to the view that we have, you know, last quarter. So no, I'd say no major change being driven from category assumptions.

Speaker Change: And I just sat Peter at that in terms of assumptions for the remainder of the year. We do attempt to update our category view every quarter and we did do that. But I would say it was very similar to the view that we had, you know, at the last quarter. So no, I'd say no major change being driven from category assumptions.

Peter Grom: Okay, that's super helpful.

Brian Grass: And then just on the buyback, and I apologize if I missed this, but just any thoughts on how you're thinking about timing. Is this something you're looking to complete in a relatively short time frame here, or is this more of a longer term program? Now I say there's no views on it really; this was really just good housekeeping of the board, refreshing our authorization because it was expiring at the end of August. So it was really a refresh of our authorization and getting it back to the level that we kind of have historically set them at, and then we'll look to execute those as we see opportunities going forward.

Speaker Change: Okay, that's super helpful. And then just on the buyback, and I apologize if I missed this, but just any thoughts on how you're thinking about timing, is this something you're looking to complete in a relatively short time frame here, or is this more of a longer term program?

Speaker Change: No, I'd say there's no views on it really, this was really just good housekeeping of the board refreshing our authorization because it had it was.

Speaker Change: expiring at the end of August, and so it was really a refresh of our authorization and getting it back to the level that we kind of have historically set them at, and then we'll look to execute those as we see opportunities going forward. So no burning fuse and really just good housekeeping.

Peter Grom: So no burning views and really just good housekeeping. Got it, thanks so much.

Peter Grom: I'll pass it on. Thanks, Peter.

Speaker Change: Got it. Thanks so much. I'll pass it on.

Rupesh Parikh: Thank you. Our next question comes from the line of Rupesh Parikh with Oppenheimer Company. Please proceed with your question. Good morning, and thanks for taking my question. So I just wanted to go back to the implied outlook for the back after the year. Given the Q2B, it would imply that maybe the back cap is slightly softer on sales and EPS; they just want to get a sense of whether, you know, what's driving or maybe it's just embedding more conservatism. Yeah, we're passionate to hear from you. So, you know, when we looked at quarter two, we thought the last of a revenue impact from the Tennessee distribution, son of the way anticipated, as Brian called out in his remarks.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question comes from the line of Rupesh Puriq with Open Hymer Company. Please proceed with your question.

Speaker Change: Good morning, and thanks for taking my question. So I just wanted to go back to the implied outlook for the backup of the year. You know, given the Q2B, it would imply that maybe the backup is slightly softer on sales and EPS, they just want to get a sense of whether, you know, what's driving or maybe if it's just embedding more conservatism.

Speaker Change: Yeah, we're touched with the hear from you. So, you know, when we looked at quarter two, we thought a last of a revenue impact from the Tennessee Distribution Center that we anticipated as Brian called out his remarks. And you know, so that helped us in the quarter and then we didn't...

Brian Grass: And you know, so that helps us in the quarter, and then we didn't feel as if it was enough to flow through from there. That's really the difference.

Brian Grass: Brian, anything you want to have? Yeah, I would say we really seeded our the high end of our expectations by about $4 million, and we had planned for approximately $5 million of disruption from the distribution center. So I would say all in we kind of felt like it was more of a net expectation than that regard and really not enough for us to consider, you know, raising our guidance for the second half.

Speaker Change: Beal it with enough to flow through from there. That's really the difference.

Speaker Change: Brian anything you want to have? Yeah, let's say we really seeded the high end of our expectations by about $4 million and we had planned for approximately $5 million of disruption from the distribution center. So I would say all in we kind of felt like it was more of a net expectations in that regard and really not enough for us to consider raising our guidance for the second half.

Rupesh Parikh: Ray, and then maybe just my follow-up question. Just as we look at the beauty category, clearly it's gotten more competitive out there. Maybe some, you know, there's also some macro head ones with the consumer there. You know, what would you say are the key efforts to drive that category back to growth? And, you know, how do you guys think about timing? It's just something that could take it be quarters to drive me improvements. I just had any more colleagues there. It was an effort and potential timing of a turn in the beauty category. Yeah, I would say in beauty, you know, a few things.

Speaker Change: Ray, and then maybe just my follow-up question. Just as we look at the beauty category, it's got a more competitive out there. Maybe some, you know, there's also some macro headwinds with the consumer there. What would you say are the key efforts to drive that category back to growth? And, you know, how do you guys think about timing, like if there's something that could take a few quarters to drive an improvement, so just any more color there. And potential timing of a turn in the beauty category. All right.

Noelle Jafois: One, you know, it started for me what's really doing the foundational brand building framework for that we did, including that detailed quantitative category segmentation of consumers. So we really understand who the consumers are, what our segments are, and how do we position our portfolio brands against those different consumer segments. And so that foundation, you know, we completed kind of at the start of the year, and now the brands are using those frameworks and using all of that insight. So, you know, to build their plans and kind of continue to move forward. We did bring in some new leadership in beauty and wellness for some fresh perspective.

Speaker Change: Yeah, I would say in beauty, you know, a few things. You know, it started for me what's really doing the foundational brand building framework or if that we did, including that detailed quantitative category segmentation of consumers. So we really understand.

Speaker Change: Who the consumers are, what our segments are, and how do we position our portfolio brands against those different consumer segments? And so that foundation, you know, we completed kind of at the start of the year and now the brands are using those frameworks and using all of that insight to, you know, to build their plans and kind of continue to move forward. We did bring in some new leadership in beauty and wellness for some fresh perspective. We've had a lot of meetings with some of our key retailers, so we're getting customer and buyer input on [inaudible]

Noelle Jafois: We've had a lot of meetings with some of our key retailers, and we're getting customer and buyer input on what they're seeing, what they're looking for. And I think you're already seeing some of the fruits of all that labor come into the market that I talked about today. Curl Smith, the real bright spot, you know, really pleased with how that performing grow share and a growing, you know, high growing category. A lot of new products that are really hitting the market and the war and getting a lot of positive consumer feedback. And drive our the liquid, you know, our, some of the liquid extensions are bright spot, my big group that I comment on really hitting on that consumer insight of spending here with the power claim of 150%.

Speaker Change: What they're seeing, what they're looking for, and I think you're already seeing some of the fruits of all that labor come into the market that I talked about today. Crawl Smith, a real bright spot, you know, really pleased with how that's performing grown share in a growing, you know, a high-growing category, a lot of new products that are really hitting the market, getting the war and getting a lot of positive consumer feedback. [inaudible]

Speaker Change: Some of the liquid extensions are a bright spotlight big groove that I comment on really hitting on that consumer insight of thinning hair with the power claim of 150%.

Noelle Jafois: Falling in producing with big groups of that standing out. The Rev on bymiser, we just, you know, launched some value reframing, which came directly from that variable in framework. You know, understanding that there's a group of consumers out there who are value-seeking right now, right? Then want that great song quality performance, but they don't want it to break the bank. So they're looking for a product like a Rev on one step. It's still the, you know, Rev on to the share leader in, in hot air, silos and, in that particular item still sells more three times more than the next largest competitor.

Speaker Change: Ahm!

Speaker Change: Volume Producing with Big Brew, so that's standing out. The Revlon Volumizer, we just launched some value reframing, which came directly from that brand building framework, you know, understanding that there's a group of consumers out there who are value seeking right now, right? Then want that great song quality performance, but they don't want it to break the bank, so they're looking for a product like a Revlon one step. It's still the Revlon's the share leader in hot air stylers and that particular item still sells more three times more than the next largest competitor, so it's...

Noelle Jafois: So it's, you know, really putting our, our marketing out there. So the consumer can choose us more often. So there will be the things that we continue to do. We've got some more innovation in the pipeline.

Speaker Change: You know, really putting our marketing out there, so the consumer can choose us more often. So there'll be the things that we continue to do. We've got some more innovation in the pipeline. I think there's something we're excited about towards the end of the year that'll come out from a new product standpoint. But those are those are going to be the steps, right? It's the marketing, it's the new product that's positioning our brands in the marketplace with a retail partner effectively.

Noelle Jafois: I think, you know, there's something we're excited about towards the end of the year that will come out from a new product standpoint. But those are those are going to be the steps, right? It's the marketing; it's the new products that's positioning our brands in the marketplace with our retail partners.

Rupesh Parikh: Great, thank you for all the color and best of luck.

Rupesh Parikh: Thanks, Rupesh. Thank you.

Speaker Change: Great, thank you for all the color, best of luck.

Speaker Change: Thanks for the passion.

Bob Libick: Our next question comes from the line, Bob Libak with CJS Securities. Please pursue with your question. Good morning. Thanks for taking our questions. I wanted to kind of follow up on what you were just saying there. You've increased brand investment, but you've also increased investment in data and analytics capabilities.

Speaker Change: Thank you. Our next question comes from the line of Bob LeBec with CJS Security. Please proceed with your question.

Speaker Change: Good morning, thanks for your questions.

Bob LeBec: I wanted to kind of follow up on what you were just saying there. You've increased brand investment, but you've also increased investment in data and analytics capabilities. Can you tell us what are the key learnings from this increased data and analytics so far? And what have you done? What have you changed in your processes or your outlook, investment, et cetera, as a result of the learnings from the data and analytics capabilities you now have? [inaudible]

Noelle Jafois: Can you tell us what are the key learnings from this increased data and analytics so far? And what have you done? What have you changed in your processes or your outlook, investment, et cetera, as a result of the learnings from the data and analytics capabilities you now have? Yeah, thanks, Bob. That's been a really big focus for me. I really felt that we will be better by using data and analytics to inform everything we do. And so it started with the foundational consumer segmentation and understanding in the brand building framework so that we're really clear going into our planning, who we're looking to reach and who is sort of a high growth prospect consumer segment by brand.

Speaker Change: Yeah, thanks, Bob. That's been a really big focus for me. I really felt that we will be better by using data and analytics to inform everything we do. So it started with the foundational consumer segmentation and understanding in the brand building framework so that we're really clear going into our planning, who we're looking to reach and who is sort of a high growth prospect, consumer segment by brand. And then as we're allocating the incremental media that Project Pegasus helped generate, it's using that insight to go after the right target audience. And then we did a very robust first time ever marketing next model that allowed

Noelle Jafois: And then, as we're allocating the incremental media that Project Pegasus helped generate, it's using that insight to go after the right target audience. And then we did a very robust first time ever marketing mix model that allows us to understand our return on ad spend across all the brands in our portfolio, but also, importantly, every single tactic that we use. So we're able to optimize our spend across the brand portfolio, but also, importantly, across the tactics, so we can look across upper and lower funnel and really optimize against that return on investment and the reach that we're looking to get.

Speaker Change: Joseph to understand our return on ad spend across all the brands in our portfolio, but also importantly every single tactic that we use. So we're able to optimize our spend across the brand portfolio, but also importantly across the tactics so we can look across upper and lower funnel and really optimize against that return on investment and the reach that we're looking looking to get. So it's really a completely new way of going to market for up for Helen of Troy, who we're talking to and then how we're measuring the impact of that spend.

Noelle Jafois: So it's really a completely new way of going to market for Helen Detroit, who we're talking to, and then how we're measuring the impact of that spend. Okay, great.

Brian Grass: And then Brian, I think you touched on the shorter holiday season, I guess, and later Thanksgiving and stuff. Could you give us a sense of how the retail environment is setting up right now versus, I guess, expectations versus prior years? Yeah, I mean, there is an expectation of the software environment, which I would say we kind of had for the remainder of the year before we really got to the holiday season. So I would say the expectations are more value oriented and maybe a little bit softer, but I feel like we had that embedded in our expectations already.

Speaker Change: Okay, great, and then Brian, I think you touched on the shorter holiday season, I guess, and later Thanksgiving and stuff. Could you give us a sense of how the retail environment is setting up right now versus, I guess, expectations and versus prior years?

Speaker Change: Yeah, I mean, there is an expectation of the softer environment, which I would say we, you know, kind of hat for the remainder of the year, before we, you know, really got to the holiday season, so I would say the expectations are more value oriented and maybe a little bit softer, but I feel like we had that embedded in our expectations already.

Bob Libick: Okay, great.

Bob Libick: Thank you.

Bob Libick: Thanks, Bob.

Speaker Change: Okay, great, thank you.

Olivia Tongue: Thank you. Our next question comes from the line of Olivia Tongue with Raymond James. Please proceed with your question. Great. Thanks. Good morning. You had mentioned that several categories have been normalizing now, for example. So can you talk about how, how do you expect that to manifest? Are you advertising more behind them? Is there more shelf space? Either in brick-and-mortar or more focus online on those categories? And how do we think about that in light of the more challenging macros, particularly as it relates to promotional levels in your key categories and whether retailers are going to be tighter on it?

Speaker Change: Thanks for watching!

Speaker Change: Thank you. Our next question comes from the line of Olivia Tong with Raymond James. Please proceed with your question.

Olivia Tong: Great, thanks. Good morning. You had mentioned that several categories have been normalizing now, for example. So can you talk about how you expect that to manifest? Are you advertising more behind them? Is there more shelf space? Either in brick and mortar or more focus online on those categories? And how do we think about that in light of the more challenging macros, particularly as it relates to promotional levels in your key categories and whether retailers are going to be tighter on inventory near term?

Noelle Jafois: and Troy Ltd.

Noelle Jafois: Yes, thanks, Olivia. You know, I would say when it comes to the normal life in categories, those are really the ones that were impacted by COVID. So if you think about kitchen utensils, you know, we were still kind of continuing to see that category in decline, as we were coming off of the COVID, you know, kind of the COVID surge of that particular product. I now say it's acting more normally on a go-forward base of a category like kitchen utensils, and really a lot of ox, so we get stirred up by new home formation, you know, back to school, whole meal prep, how they meal prep, things like that.

Speaker Change: Yes, thanks Olivia. You know, I would say when it comes to the normal life in categories, those are really the ones that were impacted by COVID. So if you think about kitchen utensils.

Speaker Change: We were still continuing to see that category in decline.

Speaker Change: as we are coming off in the Covid.

Speaker Change: You know kind of the COVID surge of that particular product. I now would say it's acting more normally on a go-forward basis a category like kitchen utensils and really a lot of oxo gets driven by new new own formation, you know back to school meal prep holiday meal prep things things like that it becomes you know more of those normal activities. I will say right now, you know we're also impacted on oxo by eating in or dining out, you know how consumers you know choose choose to kind of spend their money that way so as consumers are being a little bit more you know diligent about how they're spending if they choose to eat out a bit less and in a more that's that's a positive for for a brand like oxo

Noelle Jafois: It becomes, you know, more of those normal activities. I will say right now, you know, we're also impacted on ox, so by eating in or dining out, you know, how consumers, you know, choose to kind of spend their money that way. Those consumers are being a little bit more, you know, diligent about how they're spending. If they choose to eat out of that last and in and out more, that's like that's a positive for a brand like Ox, so the momitor is another one, you know, that had a big normalization, air purifier, the big normalization post COVID.

Speaker Change: The monitor was another one, you know, that had a big normalization, air purifier, the big normalization posts COVID. So I think, you know, a couple of them are still normalizing, I would say air is still a little bit a little bit.

Noelle Jafois: So I think, you know, those, you know, a couple of them are still normalizing. I would say air is still a little bit normalization; have a fully occurred yet. Similar on dry food storage, that's another one from a category standpoint that's still normalizing. I think in terms of retail inventory. I mean, look, we don't see anything hugely unusual right now for retail inventory standpoint. The thing that we see is the retailers who are maybe performing a little bit less well in the marketplace are, you know, using different techniques to manage their inventory, you know, quarter quarters, so we've got a little bit less visibility than maybe we have in the past. They tend to manage it at a total store level versus category by category.

Speaker Change: Normalization has a fully occurred yet similar on dry food storage, that's another one from a category standpoint that's still normalizing.

Speaker Change: I think in terms of retail inventory, I mean, we don't see anything hugely unusual right now for a retail inventory standpoint, the thing that we see.

Speaker Change: is the retailers who are maybe performing a little bit less well in the marketplace are...

Speaker Change: You know, using different techniques to manage their inventory, you know, quarter quarters, so we've got a little less visibility than maybe we have in the past they tend to manage it at a total store level.

Noelle Jafois: So those are things that we see from time to time that impact is that can be a little bit surprising that that, otherwise I don't see huge inventory issue in the retail marketplace right now.

Speaker Change: versus Category by Category, and so-

Speaker Change: Those are things that we see from time to time that in practice it can be a little bit surprising about.

Speaker Change: Another why I don't see huge inventory issue in the retail marketplace right now.

Olivia Tongue: That's helpful, and then just thinking about, you know, the guide, and maybe you can help us understand sort of the building blocks to get from one end of the range to the other now that you are. You're at the halfway point of the year; likely you have some fairly reasonable visibility to holiday, recognizing, of course, is short and holiday period this year versus last year, but just any, you know, sort of building blocks around one end to the other. Thanks. So you're talking about what would change between the high end and the low end of our guidance, Olivia.

Speaker Change: And then just thinking about the guide and maybe you can help us understand sort of the building blocks to get from one end of the ranchier there now that you are at the halfway point of the year. Like we, you have some fairly reasonable visibility to holiday, recognizing of course is short and holiday period this year versus last year. But just any sort of building blocks around one end to the other. Thanks.

Speaker Change: So you're talking about what's which change between the high end and the low end of our guidance, Olivia.

Brian Grass: Basically just trying to understand, you know, what the parameters are to get to the high end of the outlook versus the lower end of your outlook. Given that. Okay. That helps. Yeah. I would say that the building blocks on the high end of our guidance would be what we have a clear line of fight to. And, and as we said before, we've taken a hard look at PLS trends and tried to assume that the current trends not tried to assume that current trends would remain. Consistence throughout the remainder of the year. I would really say the big thing that would change from there would be PLS trends declining.

Olivia Tong: basically just trying to understand what the parameters are to get to the high end of the outlook versus the lower end of your outlook. Given that's okay. Presumably that's the know-how the outlook looks like already in a couple of other things.

Speaker Change: Okay, that's all. Yeah, I would say that the building blocks on the high end of our guidance would be...

Speaker Change: What we have clear line of fight to, and as we said before, we've taken a hard look at PLS trends and tried to assume that current trends, not tried to assume that current trends would remain consistent throughout the remainder of the year. I would really say the big thing that would change from there.

Brian Grass: So if PLS trends were to decline from where they were, then that would be a factor that would put us more towards the lower end of the range. But that's really it. I would say we would not lean forward on opportunities that we didn't have line of fight on, with respect for high end of our outlook. So that that's there in the PLS, we've assumed current PLS trends. If they were slightly lower or lower, that would pull us down closer towards the lower end of the range. But that's really it because we haven't really made.

Speaker Change: would be POS trends declining. So if POS trends were to decline from where they were, then that would be a factor that would put us more towards the lower end of the range, but that's really it. I would say we've not leaned forward on opportunities that we didn't have line of sight on with respect to our high end of our outlook so that that's there in the POS. We've assumed current POS trends, if they were slightly lower or lower, that could pull us down closer towards the lower end of the range, but that's really it because we haven't really made

Brian Grass: Leaning court assumptions with respect to the incremental building blocks such as distribution gains or new product innovation or even our return on investment from our marketing spend. We feel good about the data we have to support that, and so we think that's tangible building blocks. So I think it really have to be a major change in trend or major change in the macro environment. I know all of you want to add anything. No, I think that's right. And as we've said before, the biggest tangible building block in the back half distribution, followed by, I would say, some.

Speaker Change: Leaning court assumptions with respect to the incremental building blocks such as distribution gains or new product innovation or even our return on investment from our marketing spend. We feel good about the data we have to support that, and so we think that's tangible building block.

Speaker Change: So, I think it really has to be a major change in trend or a major change in the macro environment. But Noel can be one of anything. No, I think that's right. And as we've said before, the biggest tangible building block in the back cap is distribution, followed by, I would say, some incremental innovation and then the marketing spend.

Noelle Jafois: from incremental innovation and then the marketing stand.

Olivia Tongue: Thank you so much.

Speaker Change: John, thank you so much.

Linda Bolton-Wyzer: Thank you. Our next question comes from the line of Linda Bolton-Wyzer with DA Davidson. Please proceed with your question. Yes, I thank you. So I think originally, if we go back to this original, original expectations about the cadence of growth or decline or whatever, the original, I guess, idea was that you had gained a lot of distribution in the second half of 2024 and that that benefit would carry on into the first half. Is there any way to quantify, despite all this other noise that occurred from the DC implementation, is there any way to quantify that distribution benefit in the first half of your fiscal and then is the distribution benefit in the second half, kind of going to be bigger or smaller than what you've already had if you can understand what I'm asking.

Speaker Change: Thank you. Our next question comes from the line of Linda Bolton-Wiser with DA Davidson. Please proceed with your question.

Linda Bolton-Wiser: Well, if I thank you, so I think originally, if we go back to this original, original expectations about the cadence of growth or decline or whatever, the original, I guess idea was that you had gained a lot of distribution in the second half of 2024 and that that benefit would carry on into the first half.

Speaker Change: Is there any way to quantify, you know, despite all this other noise that occurred from the DC implementation? Is there any way to quantify that distribution benefit in the first half of your fiscal and then is the distribution benefit in the second half?

Speaker Change: Kind of going to be bigger or smaller than what you've already had if you can understand what I'm asking. Thank you.

Linda Bolton-Wyzer: Thank you.

Brian Grass: Yeah, I just answered a second question first. The distribution gains we are getting in the second half of this year should be bigger than the carry forward gains from the prior year that impacted the first half of this year. So we have secured incrementally more distribution, I would say, that will apply new distribution that will apply to fiscal year 25 than we had secured in fiscal year 24. And we haven't really sized it. So I would not, you know, be comfortable giving that right now. We haven't really sized it publicly. And so, you know, we have talked about the dimensionality of the new distribution that we have for fiscal year 25, but with respect to 24 and carry over impacts on fiscal 25, we haven't really disclosed that.

Speaker Change: Yeah, I just danced for a second question first.

Speaker Change: The distribution gains we are getting in the second half of this year should be bigger than the carry forward gains from the prior year that impacted the first half of this year. So we have secured incrementally more distribution, I would say, that will apply new distribution that will apply to fiscal year 25 than we had secured in fiscal year 24.

Speaker Change: and we haven't really sized it, so I would not be comfortable giving that right now, we haven't really sized it publicly, and so we have talked about the dimensionality of the new distribution that we have for Fizzle Year 25, but with respect to 24 and its carry over impact on fiscal 25, we haven't really disclosed that.

Brian Grass: But I will try to say that the fiscal 25 gains are bigger than fiscal 24. Okay, thank you. That's helpful.

Speaker Change: But then I will tell you that the fiscal 25 games are bigger than fiscal 24.

Linda Bolton-Wyzer: And then I was curious about in our store checks when we checked at the all taught within Target, you know, it's sort of a limited selection of brands. It's not a huge array, like a regular alpha store. But we did notice that your driver in your Christmas had very nice shelf space there. So can you talk about that. And is that like a benefit to the whole growth rate. I mean, does it move the needle at all, or just can you talk about sort of that positioning within alpha and target. Thanks. Yeah, thanks, Linda. You know, I would say, you know, look, I'm physical availability.

Speaker Change: Okay, thank you, the helpful. And then, um...

Speaker Change: I was I was I was curious about in our store checks when we checked at the Alta within target. You know, it's sort of a limited selection of brands. It's not a huge array like a regular Alta store, but we did notice that your drive our in your Christmas had very nice shelf space there. So can you talk about that and is that like a benefit to the whole growth rate. I mean does it move the needle at all or just can you talk about sort of that positioning with an Alta in target. Thanks.

Speaker Change: Thanks for the, you know, I would say, you know, look, I'm...

Noelle Jafois: So having our brands is widely available in front of as many shoppers as possible is a benefit in my view. So I think, you know, the old and target helps to do that. It brings some of our premium prestige liquids like Christmas and drive our even in the limited assortment that's there, as you mentioned. And I see there's a positive thing. You know, there's just, there's a lot of people. A lot of football going through target. And so having that stores and store there and being part of that assortment is a positive. You know, whether or not it's a needle mover.

Speaker Change: physical availability, so having our brands is widely available in front of many shoppers as possible, is a benefit in my community.

Speaker Change: The ultimate target helps to do that. It brings some of our, you know, premium prestige liquids like Grossmet and drive are even in the limited assortment that's there as you mentioned. I see there's a positive thing. You know, there's just, there's a lot of people, a lot of football going through target and so having that stores and store there and being part of that assortment is a positive. You know, whether you're not into a needle mover.

Noelle Jafois: You know, I don't know that we break it out in a way to be able to see specifically that, you know, what's coming from one versus the other. It's all it's all for us. But I just subjectively would say, you know, I think it's a great thing for our brands, and as allows, you know, a brand-like Croathlete to be in front of shopper that at Target, was in that store within store.

Speaker Change: You know, I don't know that we break it out in a way to be able to see specifically that you know what's coming from one versus the other it's all it's all all tough for us but but I just subjectively would say you know I think it's a it's a great thing for our brand and it allows you know brand like Christmas to be in in front of shoppers at target within that store so all positive from my perspective and similarly the to for within cold you know that's a more idea

Noelle Jafois: So, all positive for my perspective, and similarly, the Sephora within holes, you know, it's a more idea. So, thank you.

Speaker Change: Thank you.

Linda Bolton-Wyzer: Thank you.

Susan Anderson: Our final question comes from the line of Susan Anderson, with category Genuity.

Speaker Change: Thank you. Our final question comes from the line of Susan Anderson with Category Genuity. Please proceed with your question.

Susan Anderson: Please first you with your question. I think through taking my question, a little bit maybe you can give some thoughts just kind of going into the holiday season, how you're expecting consumer spending. You expect them to, you know, spend on discretionary items, and then also maybe if you could just talk about the promotional cadence, you're over year that you're expecting and just how you're planning for the season. Thanks. Yeah. Thanks, Susan.

Susan Anderson: Hi, thanks for taking my question. I was wondering if maybe you can give some thoughts just kind of going into the holiday season, how you're expecting consumer spending, do you expect them to, you know, do you expect it to be similar to what we saw all year on spend on discretionary items. And then also maybe if you could just talk about the promotional cadence you're a year that you're expecting and just how you're planning for the season. Thanks.

Noelle Jafois: You know, it was saying general holidays; we talked about there's, you know, one last week. I think, you know, primed days are happening kind of right now. So, I think that's going to give us some indication. It's a little bit about run up to the holidays to see, you know, where consumers are leaning in and what they're looking at. You know, continue to think everything we hear is the consumer balance sheet continues to be challenged. And so I think consumers are spending, but they're being cheesy on where and how they spend their money. And I think it'll be similar in the holidays season.

Speaker Change: Yeah, thanks, Susan. You know, I would say in general on holidays, we talked about there's, you know, one last week, I think, you know, prime days are happening kind of right now. So I think that's going to give us some indication. It's a little bit of a run up to the holidays to see, you know, where consumers are leaning in and what they're looking at, you know, I, you know, continue to think everything we hear is the consumer balance she continues to be challenged. And so I think consumers are spending, but they're being cheesy on where and how they spend their money. And I think it will be similar in the holiday season. They're going to look for, you know, items that really meet some specific need or items that they're, you know, really think we'll bring, you know, delight to, you know, to who...

Noelle Jafois: They're going to, you know, look for items that really meet a specific need or items that they're, you know, really think we'll bring, you know, delight to, you know, to who they're giving the gifts to. And so that's, I think that kind of macro sentiment is going to carry over into the holidays. I think promotion was, again, consumers are looking for value. What I really see is where consumers are shopping. So, you know, you're seeing customers and retailers like Walmart, Costco doing really well. And those are the retailers that consumers think of when they think, I'm getting a good value when I'm shopping in those places.

Speaker Change: are giving the gifts too. And so that's, I think that kind of macro sentiment is going to carry over into the holiday. I think promotion was, again, similar to looking for value, what I really see is, is.

Speaker Change: Where consumers are shopping? So, you know, you're seeing customers and retailers like Walmart, Costco doing really well And those are the retailers that consumers think of when they think I'm getting a good value when I'm shopping in those places Or they're interested in events like Prime Day and things like that

Noelle Jafois: Or they're interested in events like Prime Day and things like that.

Noelle Jafois: When it comes to our promotional planning, you know, we have promotional plans for all of our brands across the year coming into the year. And those key-tempful events and those key windows are things that will continue to support. I don't see us doing anything dramatically different in terms of depth of discount. You know, I would say, for example, in the prime days right now, our breadth of performance is a little bit broader than what we've done in the past. So, offerings participating for the first time. But a lot of that is more because of offerings diversifying into adjacent categories like the day pass, the everyday lifestyle pack.

Speaker Change: When it comes to our promotional planning, we have promotional plans for all of our brands across the year coming into the year and to those key-tempful events and those key windows, are things that will continue to support. I don't see us doing...

Speaker Change: doing anything dramatically different in terms of depth of discount. I would say, for example, in the prime days right now our breath of assortment is a little bit broader than what we've done in the past, so Osprey is participating for the first time, but a lot of that is more because Osprey is diversifying into adjacent categories like the day packs, the everyday lifestyle packs, and so we've got items that make sense to participate there, and it's an important temple of that, so I see us.

Noelle Jafois: And so we've got items that make sense to participate there, and it's an important temple event. So I see us, you know, continuing to look at, you know, as our brands expand into these categories, where there are opportunities to participate in 10 full events. But I don't see us doing major depth discount, you know, in light of where the consumer is right now. Okay, great. That was very helpful. Maybe second is to add one more.

Speaker Change: Continuing to look at, you know, as our brands expand into these categories, where their opportunities to participate in 10 pull-backs, but I don't see us doing major death discount, you know, in light of where the consumer ends right now.

Speaker Change: Okay, great. That was very helpful. Maybe second to say one more, if you could talk about the cadence of growth's margin, I guess between the third and fourth quarter in the back half, are you expecting any differences there? Maybe you could just talk about the put in tape, also versus the first half. Thanks.

Brian Grass: If you could talk about the cadence and growth margin. I guess between the third and fourth quarter and the back half, are you expecting any differences there? Maybe you could just talk about the put-and-taste also versus the first half. Thanks. Yeah, I would say just if you compare Q2, our growth margin was below our expectations, and there were a couple, you know, things going on there that we wouldn't necessarily expect to repeat like year-over-year inventory off lessons, and then a little bit of margin compression that we did get seen Q2 because we launched a Costco, we had a lower DTC, which I think it's going to normalize, and then we had a little bit higher clothes out, so those all weighed in the margin on the margin, but I expect that to normalize and get back more towards prior year and maybe slightly above prior year in the second half.

Speaker Change: Yeah, I would say just if you compare Q2, it's our growth margin was below our expectations and there were a couple, you know, things going on there that we wouldn't necessarily expect to repeat like you're over your inventory off the lessons.

Speaker Change: and then a little bit of March and compression that we did get seen too because we launched a COPSO.

Speaker Change: We had lower DTC, which I think is going to normalize and then we had a little bit higher close-out, so those all weighed in the margin, but I expect that to normalize and get back more towards prior year and maybe slightly above prior year in the second half.

Brian Grass: And sorry, what was the second question? That was it. Well, I guess the difference between the first half and then the third and fourth quarter as well. Okay, yeah, I think they're in fourth quarter, very similar and both pretty consistent with prior year, maybe slightly above. Okay, great. Thanks so much. Good luck the rest of the year.

Speaker Change: and sorry, what was the second question?

Speaker Change: That was it. Well, I guess just the difference between the first half and then the third and fourth quarter as well.

Speaker Change: Okay, yeah, I've taken a four-quarter very similar and both a pretty consistent with prior year, maybe slightly above.

Noelle Jafois: Thank you.

Speaker Change: Okay, great. Thanks so much. Good luck the rest of the year.

Noelle Jafois: Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to management for any final comments.

John Grass: Hello, I'm John Grass.

Speaker Change: Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to management for any final comments.

Noelle Jafois: Thank you all for joining us today as we share the significant progress we are making to reset and revitalize our business this fiscal year. We believe we're taking the right steps on the path to sustainable long-term top line growth, and we really look forward to updating you all on our progress and future calls. Thanks so much. Thank you.

Speaker Change: Thank you all for joining us today as we share the significant progress we are making to reset and revitalize our business fiscal year. We believe we're taking the right steps on the past sustainable long-term top-line growth and we really look forward to updating you all on our progress and future calls. Thanks so much.

Operator: This concludes today's conference call. You may disconnect your lines at this time. Thank you for your part.

Speaker Change: Thank you. This concludes today's conference. Call you me disconnect your lines at this time. Thank you for your participation.