Q2 2027 Helen of Troy Ltd Earnings Call

October 8, 2026

Speaker #1: Greetings and welcome to the Helen of Troy Ltd. second quarter 2027 earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation.

Operator: Greetings, and welcome to Helen of Troy Limited's Q2 2027 earnings conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Anne Rakunas, Senior Director, IR and Corporate Communications. Thank you. You may begin.

Operator: Greetings, and welcome to Helen of Troy Limited's Q2 2027 earnings conference call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Anne Rakunas, Senior Director, IR and Corporate Communications. Thank you. You may begin.

Speaker #1: If anyone requires operator assistance during the conference, please press *0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Anne Rakunas, Senior Director, IR and Corporate Communications.

Speaker #1: Thank you. You may begin.

Speaker #2: Thank you, operator. Good morning, everyone. Welcome to Helen of Troy's second quarter fiscal 2027 earnings conference call. The agenda for the call this morning is as follows.

Anne Rakunas: Thank you, operator. Good morning, everyone. Welcome to Helen of Troy's Q2 fiscal 2027 earnings conference call. The agenda for the call this morning is as follows. I will begin with a brief description of forward-looking statements. Scott Uzzell, our CEO, will then share his thoughts on progress in the quarter. Brian Grass, our CFO, will provide an overview of our financial performance in Q2 and our revised expectations for the full year fiscal 2027. Following our prepared remarks, 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 "anticipates," "believes," "expects" 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 materially from the actual results.

Speaker #2: I will begin with a brief description of forward-looking statements. George Uzzell, our CEO, will then share his thoughts on progress in the quarter, and Brian Grass, our CFO, will provide an overview of our financial performance in the second quarter and our revised expectations for the full year fiscal 2027.

Speaker #2: Following our prepared remarks, we'll open up the call for Q&A. This conference call may contain certain forward-looking statements that are based on management's current expectations with respect to future events or financial performance.

Speaker #2: Generally, the words "anticipates," "believes," "expects," 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 materially from actual results.

Speaker #2: 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.

Anne Rakunas: 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. The company cautions listeners not to place undue reliance on forward-looking statements or non-GAAP information. Before I turn the call over to Scott, I would like to inform everyone that a copy of today's earnings release can be found on the investor relations section of our website by scrolling to the bottom of the homepage. The earnings release contains tables that reconcile non-GAAP financial measures to their corresponding GAAP-based measures. We have also posted an investor presentation to our website. I will now turn the call over to Scott.

Anne Rakunas: 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. The company cautions listeners not to place undue reliance on forward-looking statements or Non-GAAP information. Before I turn the call over to Scott, I would like to inform everyone that a copy of today's earnings release can be found on the investor relations section of our website by scrolling to the bottom of the homepage. The earnings release contains tables that reconcile Non-GAAP financial measures to their corresponding GAAP-based measures. We have also posted an investor presentation to our website. I will now turn the call over to Scott.

Speaker #2: The company cautions listeners not to place undue reliance on forward-looking statements or non-GAAP information. Before I turn the call over to Scott, I would like to inform everyone that a copy of today's earnings release can be found on the investor relations section of our website by scrolling to the bottom of the homepage.

Speaker #2: The earnings release contains tables that reconcile non-GAAP financial measures to their corresponding GAAP-based measures. We've also posted an investor presentation to our website. Now, I'll turn the call over to Scott.

Speaker #3: Thank you, Anne. Good morning, everyone. Thank you for joining us. When we spoke in July, I shared that we were focused on strengthening the critical fundamentals of our company.

Scott Uzzell: Thank you, Anne. Good morning, everyone. Thank you for joining us. When we spoke in July, I shared that we were focused on strengthening the critical fundamentals of our company. We continue to make progress to become a better Helen of Troy, on the road to becoming a bigger Helen of Troy. Our Q2 results reflect continued execution against the priorities outlined in our multi-year roadmap. Our Q2 sales were in line with our outlook, and our adjusted diluted EPS came in ahead. As I stated over the last several quarters, our recovery will not be linear. In fiscal 2027, we are squarely focused on demonstrating markers of progress to set us up for sustained and repeat strong performance over many years to come. It is about brand growth, driving sales growth through disciplined investment in brands and categories where we believe we have a clear path to win.

Speaker #3: We continue to make progress to become a better Helen of Troy, and we are on the road to becoming a bigger Helen of Troy. Our Q2 results reflect continued execution against the priorities outlined in our multi-year roadmap.

Speaker #3: Our Q2 sales were in line with our outlook, and our adjusted diluted EPS came in ahead. But as I stated over the last several quarters, our recovery will not be linear.

Speaker #3: In fiscal 2027, we are squarely focused on demonstrating markers of progress to set us up for sustained and repeat strong performance over many years to come.

Speaker #3: It's about brand growth—driving sales growth through disciplined investment in brands and categories where we believe we have a clear path to win. It's about marketplace execution, realizing the value of our brands through premium positioning and strong market execution to continue strengthening our gross margin.

Scott Uzzell: It is about marketplace execution, realizing the value of our brands through premium positioning and strong market execution to continue strengthening our gross margin. It is about balance sheet productivity, paying down debt further. We are pursuing these priorities through three foundational pillars, paired with continued balance sheet discipline. We continue to execute against all these areas. We are two quarters into our plan to making a better Helen of Troy, and we are making progress. The operating environment continues to be dynamic, but I truly believe what we need to do to reach our aspiration is in our control, and we are encouraged by what we see across several areas of the business. I want to highlight a few Q2 examples. We grew sales year-over-year across all three Home and Outdoor brands.

Speaker #3: And it's about balance sheet productivity—paying down debt further. We're pursuing these priorities through three foundational pillars, paired with continued balance sheet discipline. We continue to execute against all these areas.

Speaker #3: We are two quarters into our plan to make a better Helen of Troy, and we are making progress. The operating environment continues to be dynamic, but I truly believe that what we need to do to reach our aspiration is within our control. We are encouraged by what we see across several areas of the business.

Speaker #3: I want to highlight a few Q2 examples. We grew sales year over year across all three HELEN outdoor brands. Osprey led growth again this quarter, reflecting strong consumer and category performance.

Scott Uzzell: Osprey led growth again this quarter, reflecting strong consumer and category performance, new product introductions, continued improvement in our international distribution network. OXO benefited from targeted actions to improve inventory composition, net distribution gains, and new product introductions. Hydro Flask was aided by targeted actions to improve inventory composition, new product innovation, and partial recapture of tariff-related disruption within the corporate channel. Wellness grew, driven primarily by growth in Vicks and Braun, reflecting net distribution gains and lapping tariff-related items and new product introductions. Olive & June produced another solid quarter, reflecting strong consumer demand, higher replenishment orders, and new and expanded distribution. In the rest of Beauty, new product innovations are contributing to sales, although some brands continue to experience softer demand. We know we have more work to do on our commercial execution and demand creation to fully capitalize on our opportunities.

Speaker #3: New product introductions, continued improvement in our international distribution network. OXO benefited from targeted actions to improve inventory composition, net distribution gains, and new product introductions.

Speaker #3: Kaiser Flash was aided by targeted actions to improve inventory composition, new product innovation, and partial recapture of tariff-related disruption within the corporate channel. Wellness grew, driven primarily by growth in Vicks and Braun, reflecting net distribution gains and lapping tariff-related items, as well as new product introductions.

Speaker #3: Olive & Juniper produced another solid quarter, reflecting strong consumer demand, higher replenishment orders, and new and expanded distribution. In the rest of Beauty, new product innovations are contributing to sales, although some brands continue to experience softer demand.

Speaker #3: We know we have more work to do on our commercial execution and demand creation to fully capitalize on our opportunities. International was another bright spot.

Scott Uzzell: International was another bright spot, with sales growing 3.7% in the quarter, led by Hydro Flask, OXO, and Osprey, reflecting new products, expanded distribution, improving execution in select markets. Our new distributor in Australia is one of our examples of more agile go-to-market approach we discussed last quarter. Importantly, in terms of North American point of sale, Beauty and Wellness showed noticeable improvement in Q2 relative to our longer trends, reflecting continued strength from Olive & June and Braun, along with improving trends across several of our more pressured businesses, including Revlon, Hot Tools, Honeywell, and Curlsmith. For the H1 of the fiscal year, we generated free cash flow of $38 million, and as of August, we improved our net leverage ratio to 3.0 times, down from 3.5 times at the end of Q1, continuing our multi-quarter trend of debt reduction.

Speaker #3: Sales grew 3.7% in the quarter, led by Hydro Flash, Oxo, and Osprey. This growth reflects new products, expanded distribution, and improved execution in select markets. Our new distributor in Australia is one example of the more agile go-to-market approach we discussed last quarter.

Speaker #3: Importantly, in terms of the North American port of sale, beauty and wellness showed noticeable improvement in Q2 relative to our longer trends. This reflects continued strength from Olive & Juniper and Braun, along with improving trends across several of our more pressured businesses, including Revlon, Hot Tools, Honeywell, and Curl Smith.

Speaker #3: For the first half of the fiscal year, we generated free cash flow of $38 million. As of August, we improved our net leverage ratio to 3.0 times.

Speaker #3: Down from 3.5 times at the end of Q1, continuing our multi-quarter trend of debt reduction. We also made progress normalizing our channel inventory, with aggregate retail inventory coverage for our brands improving compared to a year ago.

Scott Uzzell: We also made progress normalizing our channel inventory, with aggregate retail inventory coverage for our brands improving compared to a year ago. We continue to address pockets of elevated inventory for certain brands within select channels. That improvement reflects targeted closeout and liquidation efforts to clear slower-moving stock. This is the kind of disciplined execution we mean when we talk about editing and amplifying our highest impact priorities, focusing our resources where we see the greatest opportunity to strengthen our brands and improve our performance. As I mentioned last quarter, our work continues to be guided by 3 pillars: consumer-first innovation, commercial and operational excellence, and people and culture. Under consumer-first innovation, we are becoming more deliberate about our products and platforms we prioritize. Across the portfolio, we are focusing resources on the most differentiated consumer opportunities and supporting those opportunities with the right distribution, inventory, and media plans.

Speaker #3: We continue to address pockets of elevated inventory for certain brands within select channels. That improvement reflects targeted closeout and liquidation efforts to clear slower-moving stock.

Speaker #3: This is the kind of disciplined execution we mean when we talk about editing and amplifying our highest-impact priorities—focusing our resources where we see the greatest opportunity to strengthen our brands and improve our performance.

Speaker #3: As I mentioned last quarter, our work continues to be guided by three pillars: consumer-first innovation, commercial and operational excellence, and people and culture. Under consumer-first innovation, we're becoming more deliberate about the products and platforms we prioritize.

Speaker #3: Across the portfolio, we're focusing resources on the most differentiated consumer opportunities and supporting those opportunities with the right distribution, inventory, and media plans. In Health & Home, OXO expanded its entry into the pet category this quarter.

Scott Uzzell: In home and outdoor, OXO expanded its entry into pet category this quarter. After a limited release launch during Prime Day, the full line officially launched across all channels in August. This was supported with fully integrated campaign across media, digital, e-commerce, influencers, sampling, and experiential events designed to build awareness and connect with pet parents. Osprey is also expanding further into travel with the launch of the Ozone Hardside. It is an ultra-lightweight, 4-wheel luggage collection that brings Osprey's expertise in lightweight, durable design to the largest segment of the travel market. These are great examples of further extending brands in attractive adjacencies with additional products and expanded distribution opportunities. Hydro Flask Micro Hydro continues to perform well, driven by wider retail placement and more sizes.

Speaker #3: After a limited release launched during Prime Day, the full line officially launched across all channels in August. This was supported with a fully integrated campaign across media, digital, e-commerce, influencers, sampling, and experiential events.

Speaker #3: Designed to build awareness and connect with pet parents, Osprey is also expanding further into travel with the launch of the Ozone Hard Side. It's an ultra-lightweight, four-wheel luggage collection that brings Osprey's expertise in lightweight, durable design to the largest segment of the travel market.

Speaker #3: These are great examples of further extending brands and attractive adjacencies, with additional products and expanded distribution opportunities. Hydro Flash and Micro Hydro continue to perform well.

Speaker #3: Driven by wider retail placement and more sizes, the brand recently launched new innovations including Lunch Totes, Bags, and Soft Coolers, as well as limited edition Daydream Bottle and Lunchbox Collection in time for Back to School.

Scott Uzzell: The brand recently launched new innovations, including lunch totes, bags, and soft coolers, and limited edition Its Daydream Bottle and Lunchbox collection in time for back to school. In beauty and wellness, I am excited about PUR's latest industry milestone this quarter, becoming the only water filter certified to reduce lead, microplastics, and total PFAS in both pitcher and dispenser formats, addressing 3 contaminants that consumers say concern them most in their drinking water. Olive & June continued to strengthen its cultural relevance with its first exclusive influencer collaboration at Ulta Beauty, partnering with a digital creator, Avery Woods, to bring fresh, trend-driven offerings to consumers. The brand also celebrated its 10th Allure Best of Beauty award, with its gel mani system earning the prestigious honor for the second consecutive year, reinforcing Olive & June's leadership in at-home nails.

Speaker #3: In Beauty and Wellness, I'm excited about PUR's latest industry milestone this quarter—becoming the only water filter certified to reduce lead, microplastics, and total PFAS in both pitcher and dispenser formats.

Speaker #3: Addressing three contaminants that consumers say concern them most in their drinking water. Olive & Juniper continued to strengthen its cultural relevance with its first exclusive influencer collaboration at Ulta Beauty.

Speaker #3: Partnering with digital creator Avery Woods to bring fresh, trend-driven offerings to consumers. The brand also celebrated its 10th Allure Best of Beauty Award.

Speaker #3: With its gel mani system earning the prestigious honor for the second consecutive year, reinforcing Olive & June's leadership in at-home nails, Olive & June continues to be a great addition to the Helen of Troy portfolio.

Scott Uzzell: Olive & June continues to be a great addition to the Helen of Troy portfolio. Innovation is just the first step. We must sharpen the full commercial process around it. That brings me to the second pillar, commercial and operational excellence. I have shared our intent to be closer to our consumer and move with the speed of the marketplace. We are making this a reality. Last quarter, I introduced our new general manager structure. As we fill these roles, we are moving the strategy and decision-making closer to the consumer, the brand, and the marketplace. We have made progress establishing that structure during the quarter, including putting currently planned leaders in place and clarifying accountability and creating closer alignment around our growth priorities. While this work is still in the early stages, we are seeing benefits from faster decision-maker and greater cross-functional collaboration.

Speaker #3: Innovation is just the first step. We must sharpen the full commercial process around it. That brings me to the second pillar: commercial and operational excellence.

Speaker #3: I've shared our intent to be closer to our consumer and move with the speed of the marketplace. We are making this a reality. Last quarter, I introduced our new general manager structure.

Speaker #3: As we fill these roles, we're moving the strategy and decision-making closer to the consumer, the brand, and the marketplace. We've made progress establishing that structure during the quarter.

Speaker #3: Including putting currently planned leaders in place, clarifying accountability, and creating closer alignment around our growth priorities. While this work is still in the early stages, we're seeing benefits from faster decision-making and greater cross-functional collaboration.

Speaker #3: Over time, we believe this structure will strengthen our ability to respond to changing market conditions and improve execution across our portfolio. We are already seeing early evidence of this in our Helen Outdoor business, where sales and brand teams are working more closely together.

Scott Uzzell: Over time, we believe this structure will strengthen our ability to respond to changing market conditions and improve execution across our portfolio. We are already seeing early evidence of this in our home and outdoor business, where sales and brand teams are working more closely together, evaluating distribution, customer relationships, and capacity earlier in the product development process. This closer alignment is also accelerating how we share consumer and retailer insights to further improve the development process and respond quicker to promotional programs. We continue to sharpen our pricing, promotion, channel management, digital shelf, retail media, and demand planning capabilities, meeting consumers on a modern shopping journey through stronger omni-channel capabilities. We are using current point-of-sale and inventory signals to update our assumptions more quickly. Our incremental investment is more selective, with clear expectations of measurable results. This discipline is particularly important in the current environment.

Speaker #3: Evaluating distribution, customer relationships, and capacity earlier in the product development process. This closer alignment is also accelerating how we share consumer and retailer insights to further improve the development process and respond quicker to promotional programs.

Speaker #3: We continue to sharpen our pricing, promotion, channel management, digital shelf, retail media, and demand planning capabilities—meeting consumers on a modern shopping journey, and journeying through stronger omnichannel capabilities.

Speaker #3: We're using current point-of-sale and inventory signals to update our assumptions more quickly. Our incremental investment is more selective, with clear expectations of measurable results.

Speaker #3: This discipline is particularly important in the current environment. I am pleased with how our teams are managing through geopolitical, cost, and supply chain challenges.

Scott Uzzell: I am pleased how our teams are managing through geopolitical cost and supply chain challenges, with the impacts we anticipated largely tracking in line with our expectations. Our third pillar is people and culture. Building a stronger company starts with building a stronger organization. Throughout the year, we continue to simplify how we operate, strengthen ownership, and ensure our teams are focused on opportunities with the greatest potential to create value. As a part of that work, we recently appointed a new leader for our beauty and wellness business. This is an important step in strengthening our leadership and accountability within this segment as we work to build on improving trends we are seeing and accelerate the actions needed across the brands where we still are working to stabilize performance.

Speaker #3: With the impacts we anticipated largely tracking in line with our expectations, our third pillar is people and culture. Building a stronger company starts with building a stronger organization.

Speaker #3: Throughout the year, we continue to simplify how we operate, strengthen ownership, and ensure our teams are focused on opportunities with the greatest potential to create value.

Speaker #3: As part of that work, we recently appointed a new leader for our Beauty and Wellness business. This is an important step in strengthening our leadership and accountability within this segment as we work to build on improving trends we're seeing, and accelerate the actions needed across the brands where we are still working to stabilize performance.

Speaker #3: We're also continuing to cascade our culture work throughout the organization, helping to create a common set of behaviors, expectations, and ways of working that support our strategy and position us for long-term success.

Scott Uzzell: We are also continuing to cascade our culture work throughout the organization, helping create a common set of behaviors, expectations, and ways of working that support our strategy and position us for long-term success. I am encouraged by the focus, urgency, and collaboration I see across the organization. To bring it all together, Q2 was another step in our journey to become a better Helen of Troy before becoming a bigger Helen of Troy. Continued balance sheet productivity, alongside the progress we have made across the portfolio, gives us more flexibility to keep investing in our brands and position our company for sustained long-term growth. Our priorities for the rest of the year are clear: accelerating the brands showing the strongest consumer momentum, building on improving trends across beauty and wellness, and taking targeted actions where performance remains under pressure.

Speaker #3: I am encouraged by the focus, urgency, and collaboration I see across the organization. To bring it all together, Q2 was another step in our journey to become a better Helen Outdoor.

Speaker #3: Before becoming a bigger Helen Outdoor. Continued balance sheet productivity, alongside the progress we've made across the portfolio, gives us more flexibility to keep investing in our brands and position our company for sustained, long-term growth.

Speaker #3: Our priorities for the rest of the year are clear: accelerating the brands showing the strongest consumer momentum, building on improving trends across beauty and wellness, and taking targeted actions where performance remains under pressure.

Speaker #3: We know there is more work ahead, but I believe we have the right talent and strategies in place. We will continue to invest with discipline and execute with focus.

Scott Uzzell: We know there is more work ahead, but I believe we have the right talent and strategies in place, and we will continue to invest with discipline and execute with focus. With that, I want to turn it over to Brian.

Speaker #3: With that, I want to turn it over to Brian.

Speaker #2: Thank you, Scott, and good morning, everyone. Our second quarter was another step in the right direction, with results at the better end of expectations.

Brian Grass: Thank you, Scott, and good morning, everyone. Our Q2 was another step in the right direction, with results at the better end of expectations, reflecting improving business fundamentals and continued progress against our strategic priorities, even as we navigate a challenging environment with a lot of moving parts. Sales were in line with our outlook, while adjusted diluted EPS, adjusted EBITDA, and free cash flow were ahead of our expectations for the base business, which does not include the net benefit from tariff refunds. On the subject of tariff refunds, our results for the Q2 include gross pre-tax tariff refunds of approximately $26.9 million. As stated last quarter, we intend to reinvest a large portion of the gross tariff refund benefit back into the business.

Speaker #2: Reflecting improving business fundamentals and continued progress against our strategic priorities, even as we navigate a challenging environment with a lot of moving parts. Sales were in line with our outlook, while adjusted diluted EPS, adjusted EBITDA, and free cash flow were ahead of our expectations for the base business, which does not include the net benefit from tariff refunds.

Speaker #2: On the subject of tariff refunds, our results for the second quarter include gross pre-tax tariff refunds of approximately $26.9 million. As stated last quarter, we intend to reinvest a large portion of the gross tariff refund benefit back into the business.

Speaker #2: After reinvestment, we realized a net pre-tax benefit of approximately $4 million and an after-tax diluted EPS benefit of approximately $0.12, using our estimated annual adjusted effective tax rate.

Brian Grass: After reinvestment, we realized a net pre-tax benefit of approximately $4 million and an after-tax diluted EPS benefit of approximately $0.12 using our estimated annual adjusted effective tax rate. Our outlook for the full year now includes a gross tariff refund benefit for the full amount of IEEPA tariffs paid of $80.5 million, as well as our intended reinvestment in the range of $66.5 to $70.5 million, leaving an estimated net pre-tax benefit in the range of $10 to $14 million, and a net benefit to diluted EPS in the range of $0.30 to $0.45. In our earnings release, in the investor presentation posted to our website this morning, we are providing the net tariff benefit separately from our base business for the Q2 and intend to do so for the remainder of the year.

Speaker #2: Our outlook for the full year now includes a gross tariff refund benefit for the full amount of IEPA tariffs paid of $80.5 million, as well as our intended reinvestment in the range of $66.5 to $70.5 million.

Speaker #2: Leaving an estimated net pre-tax benefit in the range of $10 million to $14 million, and a net benefit to diluted EPS in the range of $0.30 to $0.45.

Speaker #2: In our earnings release and the investor presentation posted to our website this morning, we are providing the net tariff benefit separately from our base business for the second quarter, and intend to do so for the remainder of the year.

Speaker #2: It's important to note that while tariff refunds are providing a fiscal '27 benefit that we are largely reinvesting, we have not been made whole from the cumulative tariff impacts to our business.

Brian Grass: It is important to note that while tariff refunds are providing a fiscal 2027 benefit that we are largely reinvesting, we have not been made whole from the cumulative tariff impacts to our business. We have paid tariffs that have not been refunded, we have incurred operating and capital expenditures to diversify our supply base and absorb longer lead times. We have seen certain revenue bases disrupted and not fully recovered, and we have incurred higher interest expense on the cash tariff outlay.

Speaker #2: We've paid tariffs that have not been refunded. We've incurred operating and capital expenditures to diversify our supply base and absorb longer lead times. We've seen certain revenue bases disrupted and not fully recovered, and we've incurred higher interest expense on the cash tariff outlay.

Speaker #2: We are also experiencing product cost inflation due to escalating gas and diesel prices, commodities, currency, and supply scarcity. Despite the overall disruption in the environment and the unfavorable impact to our revenue and cost structure, we continue to view the refunds as an opportunity to improve the health of our business. I'm proud of the organization's agility to mobilize thoughtful and disciplined investment in a very short period. In the presentation, we've included a slide that illustrates the nature of the investments we intend to make for the full fiscal year.

Brian Grass: We are also experiencing product cost inflation due to escalating gas and diesel prices, commodities, currency, and supply scarcity. Despite the overall disruption in the environment and the unfavorable impact to our revenue and cost structure, we continue to view the refunds as an opportunity to improve the health of our business, and I am proud of the organization's agility to mobilize thoughtful and disciplined investment in a very short period of time.

Brian Grass: In the investor presentation, we have included a slide that illustrates the nature of the investments we intend to make for the full fiscal year. Turning to financial highlights for the Q2, consolidated sales increased 2.1%, in line with our outlook. For Home and Outdoor, sales increased 9.2%, with growth across all three brands. For Beauty and Wellness, sales declined 4.5%, reflecting growth in wellness and nail care, which was more than offset by a decline in the remainder of beauty. Consolidated gross profit margin increased 800 basis points to 52.2%, reflecting the favorable impact of tariff refunds, net of higher tariff costs, totaling approximately 560 basis points, and lower overall retail trade and promotional expense year-over-year. These factors were partially offset by inflationary product cost pressures due to commodities, fuel prices, freight, currency, and supply scarcity, and less favorable inventory obsolescence year-over-year.

Speaker #2: Turning to financial highlights for the second quarter, consolidated sales increased 2.1%, in line with our outlook. For Home and Outdoor, sales increased 9.2%, with growth across all three brands.

Speaker #2: For Beauty and Wellness, sales declined 4.5%, reflecting growth in Wellness and Nail Care, which was more than offset by a decline in the remainder of Beauty.

Speaker #2: Consolidated gross profit margin increased 800 basis points to 52.2%, reflecting the favorable impact of tariff refunds, net of higher tariff costs, totaling approximately 560 basis points, and lower overall retail trade and promotional expense year over year.

Speaker #2: These factors were partially offset by inflationary product cost pressures due to commodities, fuel prices, freight, currency, and supply scarcity, as well as less favorable inventory obsolescence year over year.

Speaker #2: SG&A ratio increased 540 basis points to 46.4%, primarily reflecting our stated intention to reinvest tariff refunds, as well as base business investments in the organization, go-to-market structure, and brands.

Brian Grass: SG&A ratio increased 540 basis points to 46.4%, primarily reflecting our stated intention to reinvest tariff refunds, as well as base business investments in the organization, go-to-market structure, and brands. The increase also reflects higher packaging costs related to legislation enacted by several US states and foreign geographies to reduce single-use plastics and establish regulatory requirements, which include programs designed to transfer the cost of packaging disposal from municipalities to producers of consumer packaged goods. While we expect this to be a continuing trend, we intend to use tariff refunds as an opportunity to offset some of our initial disposal costs, but more proactively, to take a fresh look at our packaging and design it to be more environmentally friendly and more appealing to our consumers and retailers.

Speaker #2: The increase also reflects higher packaging costs related to legislation enacted by several U.S. states and foreign geographies to reduce single-use plastics and establish regulatory requirements, which include programs designed to transfer the cost of packaging disposal from municipalities to producers of consumer packaged goods.

Speaker #2: While we expect this to be a continuing trend, we intend to use tariff refunds as an opportunity to offset some of our initial disposal costs, but more proactively, to take a fresh look at our packaging and design it to be more environmentally friendly and more appealing to our consumers and retailers.

Speaker #2: Finally, SG&A includes divestiture litigation costs related to the divestiture of our North American Personal Care business that occurred over five years ago. For a further description of these costs, please refer to today's earnings release.

Brian Grass: Finally, SG&A includes divestiture litigation costs related to the divestiture of our North American personal care business that occurred over five years ago. For a further description of these costs, please refer to today's earnings release. Adjusted EBITDA increased $13.2 million, and adjusted EBITDA margin improved by 280 basis points, primarily driven by the favorable impact of tariff refunds, net of higher tariff costs, lower overall retail trade and promotional expense, and the impact of favorable operating leverage, partially offset by an increase in personnel expense, higher packaging-related costs, inflationary product cost pressure, increased marketing expense, and less favorable inventory obsolescence expense year-over-year. Due to strong cash flow and a cash benefit from net tariff refunds, we are ahead of our debt paydown expectations at this point in the year, contributing to an interest expense decrease of $3.3 million.

Speaker #2: Adjusted EBITDA increased by $13.2 million, and adjusted EBITDA margin improved by 280 basis points, primarily driven by the favorable impact of tariff refunds, net of higher tariff costs, lower overall retail trade and promotional expense, and the impact of favorable operating leverage.

Speaker #2: Partially offset by an increase in personnel expense, higher packaging-related costs, inflationary product cost pressure, increased marketing expense, and less favorable inventory obsolescence expense year over year.

Speaker #2: Due to strong cash flow and a cash benefit from net tariff refunds, we are ahead of our debt paydown expectations at this point in the year, contributing to an interest expense decrease of $3.3 million.

Speaker #2: Our GAAP effective tax rate was 66.4%, and our adjusted effective tax rate was 34.1%, primarily due to an increase in tax jurisdictions with losses, which are excluded from the estimated annual effective tax rate calculation per U.S. GAAP.

Brian Grass: Our GAAP effective tax rate was 66.4%, and our adjusted effective tax rate was 34.1%, primarily due to an increase in tax jurisdictions with losses, which are excluded from the estimated annual effective tax rate calculation per US GAAP. We expect our tax rate to normalize in the remainder of the year, resulting in an estimated adjusted effective tax rate of 24% to 27% for the full year. Moving on to balance sheet highlights and free cash flow performance. Inventory ended at $480 million, a $49 million decrease from the same period last year. We also improved the health of our inventory, increasing the overall percentage of active inventory by seven percentage points during the first half of the year.

Speaker #2: We expect our tax rate to normalize in the remainder of the year, resulting in an estimated adjusted effective tax rate of 24% to 27% for the full year.

Speaker #2: Moving on to balance sheet highlights and free cash flow performance, inventory ended at $480 million, a $49 million decrease from the same period last year.

Speaker #2: We also improved the health of our inventory, increasing the overall percentage of active inventory by 7 percentage points during the first half of the year.

Speaker #2: We reduced our total debt to $673 million at the end of the second quarter, a reduction of $221 million compared to the same period last year, and $108 million since the beginning of the fiscal year.

Brian Grass: We reduced our total debt to $673 million at the end of the Q2, a reduction of $221 million compared to the same period last year, and $108 million since the beginning of the fiscal year. Our net leverage ratio decreased to 3x, compared to 3.5x at the end of the Q1, well ahead of our original target for this point of the year. Cash flow from operations was $56.5 million, and free cash flow was $38 million for the H1 of the year. Turning to our full-year fiscal 2027 outlook. We are narrowing the range of our net sales expectations slightly to $1.768 billion to $1.822 billion, with Home and Outdoor net sales of $851 million to $876 million, and Beauty and Wellness net sales of $917 million to $946 million.

Speaker #2: Our net leverage ratio decreased to 3.0 times, compared to 3.5 times at the end of the first quarter, well ahead of our original target for this point of the year.

Speaker #2: Cash flow from operations was $56.5 million, and free cash flow was $38 million for the first half of the year. Turning to our full-year fiscal 2027 outlook, we are narrowing the range of our net sales expectations slightly to $1.768 billion to $1.822 billion, with Home and Outdoor net sales of $851 million to $876 million, and Beauty and Wellness net sales of $917 million to $946 million.

Speaker #2: We are maintaining our adjusted EBITDA expectations for the base business of $193 million to $196 million and raising our consolidated EBITDA expectations to $203 million to $210 million.

Brian Grass: We are maintaining our adjusted EBITDA expectations for the base business of $193 million to $196 million and raising our consolidated EBITDA expectations to $203 million to $210 million to reflect the estimated net pre-tax tariff refund benefit in the range of $10 million to $14 million. We are slightly narrowing our adjusted EPS expectations for the base business to a range of $3.30 to $3.70 and raising our consolidated adjusted EPS expectations to a range of $3.60, $4.15 to reflect the estimated after-tax net tariff refund benefit in the range of $0.30 to $0.45. We are raising our free cash flow expectations to a range of $120 million to $140 million, while increasing our planned capital expenditure range by $9 million. Our revised consolidated full-year outlook reflects the estimated unfavorable impact from product cost inflation and potential supply disruption, largely driven by the conflict in the Middle East.

Speaker #2: To reflect the estimated net pre-tax tariff refund benefit in the range of $10 million to $14 million. We are slightly narrowing our adjusted EPS expectations for the base business to a range of $3.30 to $3.70, and raising our consolidated adjusted EPS expectations to a range of $3.60 to $4.15.

Speaker #2: To reflect the estimated after-tax net tariff refund benefit in the range of $0.30 to $0.45, we are raising our free cash flow expectations to a range of $120 to $140 million, while increasing our planned capital expenditure range by $9 million.

Speaker #2: Our revised, consolidated full-year outlook reflects the estimated unfavorable impact from product cost inflation and potential supply disruption, largely driven by the conflict in the Middle East; management's view of continued inflationary pressures, including escalating fuel and diesel prices; higher interest and mortgage rates; softness in discretionary categories; conservative retailer inventory management; and an increasingly competitive and promotional landscape.

Brian Grass: Management's view of continued inflationary pressures, including escalating fuel and diesel prices, higher interest and mortgage rates, softness in discretionary categories, conservative retailer inventory management in an increasingly competitive and promotional landscape. Our plans for a higher concentration of foundational and longer-term tariff refund investments, for which we do not expect an immediate return, and an assumed return on shorter-term investments offset by pressure on the consumer and overall price elasticity, as well as the assumed impact of increased investment from the competitive set, and an increase in estimated diluted shares outstanding to 24.2 million for the full year and 24.5 million for the H2 of the year, primarily due to the increase in share price. In terms of quarterly cadence, we expect net sales in the range of $478.3 million to $504.5 million for Q3 of fiscal 2027.

Speaker #2: Our plans for a higher concentration of foundational and longer-term tariff refund investments, for which we do not expect an immediate return, and an assumed return on shorter-term investments, are offset by pressure on the consumer and overall price elasticity, as well as the assumed impact of increased investment from the competitive set, and an increase in estimated diluted shares outstanding to 24.2 million for the full year and 24.5 million for the second half of the year, primarily due to the increase in share price.

Speaker #2: In terms of quarterly cadence, we expect net sales in the range of $478.3 million to $504.5 million for the third quarter of fiscal 2027.

Speaker #2: In terms of adjusted EPS, we expect a higher net tariff refund benefit in the third quarter, as we expect the remaining IEPA gross tariff refunds of $51.8 million to be fully recognized in the third quarter. Meanwhile, a portion of our planned strategic reinvestment is expected to fall in the fourth quarter, which will effectively lift third quarter adjusted EPS and compress fourth quarter adjusted EPS.

Brian Grass: In terms of adjusted EPS, we expect a higher net tariff refund benefit in Q3 as we expect the remaining IEEPA gross tariff refunds of $51.8 million to be fully recognized in Q3, while a portion of our planned strategic reinvestment is expected to fall in Q4, which will effectively lift Q3 adjusted EPS and compress Q4 adjusted EPS. As a result, for Q3 of fiscal 2027, we expect consolidated adjusted EPS in the range of $2.05 to $2.40, which includes a net after-tax tariff refund benefit in the range of $0.66 to $0.77 and applies adjusted EPS for the base business in the range of $1.39 to $1.63. In closing, we believe our Q2 results demonstrate continued progress, but they also reinforce the need to remain disciplined and appropriately cautious in a very dynamic environment.

Speaker #2: As a result, for the third quarter of fiscal 2027, we expect consolidated adjusted EPS in the range of $2.05 to $2.40, which includes a net after-tax tariff refund benefit in the range of $0.66 to $0.77, and implies adjusted EPS for the base business in the range of $1.39 to $1.63.

Speaker #2: In closing, we believe our second-quarter results demonstrate continued progress, but they also reinforce the need to remain disciplined and appropriately cautious in a very dynamic environment.

Speaker #2: We are encouraged by the performance of our strongest brands, as well as improving fundamentals across the balance of the portfolio, continued international growth, and the effectiveness of our sourcing and supply chain mitigation actions.

Brian Grass: We are encouraged by the performance of our strongest brands, as well as improving fundamentals across the balance of the portfolio, continued international growth, and the effectiveness of our sourcing and supply chain mitigation actions. We are also encouraged by the progress we have made to improve the health of our inventory through the H1 of the year and are targeting a 12 percentage point improvement in our active inventory composition by the end of the year, which we believe sets us up for success in fiscal 2028. We are ahead of schedule in terms of debt paydown due to strengthening cash flow, and we now expect a net leverage ratio of 2.7x or lower by the end of fiscal 2027.

Speaker #2: We're also encouraged by the progress we've made to improve the health of our inventory through the first half of the year, and we're targeting a 12 percentage point improvement in our active inventory composition by the end of the year, which we believe sets us up for success in fiscal '28.

Speaker #2: We are ahead of schedule in terms of debt paydown due to strengthening cash flow, and we now expect a net leverage ratio of 2.7 times or lower by the end of fiscal '27.

Speaker #2: At the same time, we see opportunities for more consistent performance across our portfolio. We have meaningful work ahead to stabilize our more pressured brands, rebuild the organization, and further strengthen the underlying earnings profile of the business.

Brian Grass: At the same time, we see opportunities for more consistent performance across our portfolio, and we have meaningful work ahead to stabilize our more pressured brands, rebuild the organization, and further strengthen the underlying earnings profile of the business. We will continue to allocate our resources toward the highest priority opportunities to feed the flywheel while maintaining flexibility to adjust as demand conditions evolve. Our focus remains on delivering consistent results, further improving working capital efficiency, and building the capabilities required to support sustainable growth over time. With that, I will turn it back to the operator for Q&A.

Speaker #2: We will continue to allocate our resources toward the highest-priority opportunities to feed the flywheel, while maintaining flexibility to adjust as demand conditions evolve.

Speaker #2: Our focus remains on delivering consistent results, further improving working capital efficiency, and building the capabilities required to support sustainable growth over time. And with that, I'll turn it back to the operator for Q&A.

Speaker #1: Thank you. The floor is now open for questions. If you would like to ask a question, please press star 1 on your telephone keypad at this time.

Operator: Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. We do ask that you please limit yourself to one question and one follow-up, and you may re-queue for any additional questions after that. Again, that is star one to register a question at this time. Today's first question is coming from Peter Grom of UBS. Please go ahead.

Speaker #1: A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker #1: For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. We ask that you please limit yourself to one question and one follow-up, and you may re-queue for any additional questions after that.

Speaker #1: Again, that's star 1 to register a question at this time. Today's first question is coming from Peter Graham of UBS. Please go ahead.

Speaker #3: Great. Thank you. Good morning, everyone. I hope you're doing well. So maybe just a bigger picture question to start. I wanted to ask on kind of the consumer and just the macro backdrop, and you kind of talked about how choppy it's been.

Peter Grom: Great. Thank you. Good morning, everyone. Hope you are doing well. So maybe just a bigger picture question to start. I wanted to ask on the consumer and just the macro backdrop, and you talked about how choppy it has been. So curious if you can provide a view on what you are seeing from your core consumer. Have you seen any shifts in behavior of late? Then I guess related, you talked about input cost pressures. So can you maybe just unpack your broader cost basket and how you see inflation trending from here?

Speaker #3: I’m curious if you can provide a view on what you’re seeing from your core consumer. Have you seen any shifts in behavior of late?

Speaker #3: And then, I guess related, you talked about input cost pressures. So can you maybe just unpack your broader cost basket and how you see inflation trending from here?

Speaker #4: Hey, Peter. Good morning. This is Scott and team. Good to hear from you. I'll just step back, and I'll answer your question around the consumer.

Scott Uzzell: Hey, Peter. Good morning. This is Scott and team. Good to hear from you. I will just step back, and I will answer your question around the consumer. As I have always said, and we continue to believe, that 80% of our opportunity is related to things that we control within our building, and 20% are the things that are happening around the world and around the consumer. I will start with us a little bit. We shared that we are focused on kind of-

Speaker #4: As I've always said, and we continue to believe, that 80% of our opportunity is related to things that we control within our building, and 20% are the things that are happening around the world and around the consumer.

Speaker #4: I'll start with us a little bit. We shared that we're focused on three fundamental phases of building our business, and phase one in FY27 is getting our foundation right, which is about investing in our brands, standing up an operating model that makes us closer to the consumer in the marketplace, and driving balance sheet productivity.

Scott Uzzell: Three fundamental phases of building our business, phase 1 in FY27 is getting our foundation right, which is around investing in our brands, standing up an operating model that makes us closer to the consumer in the marketplace, and driving balance sheet productivity. That is what we are focused on right now, that is kind of agnostic to the consumer. We believe that is about making a better Helen of Troy. As we look at the work that we have done in Q2 and Q1 and year to date, we continue to invest in our brands. We are focused on building our commercial muscle, our commercial discipline muscle, to execute in the marketplace, upping our ability to execute as a company, and driving balance sheet productivity, all of which we have made some progress in Q2.

Speaker #4: And that's what we're focused on right now, and that's kind of agnostic to the consumer. We believe that's about making a better Helen of Troy.

Speaker #4: As we look at the work that we've done in Q2 and Q1, and year-to-date, we continue to invest in our brands. We're focused on building our commercial discipline muscle to execute in the marketplace, upping our ability to execute as a company, and driving balance sheet productivity, all of which we've made some progress in during quarter two.

Speaker #4: In the 20% at the part that's out there, outside of the realm of Helen of Troy, I do believe the consumer is under pressure, whether it be fuel prices, interest rates, or just the cost of living for the middle market consumer, specifically in North America.

Scott Uzzell: The 20%, the part that is out there outside of the realm of Helen of Troy, I do believe the consumer is under pressure, whether it be fuel prices, interest rates, just the cost of living for the middle market consumer, specifically in North America. It is definitely more challenging this year than it was last year. But for companies that deliver amazing innovation, that tell great stories, that execute well, the consumer is still showing up. I also will say from a retailer standpoint, broadly, it is definitely a much more promotional environment than it has been in the past, but it is one that we believe that we can continue to compete in. Brian, anything you want to add?

Speaker #4: It's definitely more challenging this year than it was last year, but for companies that deliver amazing innovation, tell great stories, and execute well, the consumer is still showing up.

Speaker #4: I also will say, from a retailer standpoint broadly, it’s definitely a much more promotional environment than it’s been in the past, but it’s one that we believe we can continue to compete in.

Speaker #4: Brian, anything you want to add?

Speaker #2: Yeah. I would say, Peter, we did our we made our very best attempt to estimate inflationary costs last quarter. So when we gave you the outlook last quarter, we had made a full-sum effort to make an estimate of what we thought those all those inflationary cost movements would mean.

Brian Grass: Yeah, I would say, Peter, we made our very best attempt to estimate inflationary costs last quarter. So when we gave you the outlook last quarter, we had made a fulsome effort to make an estimate of what we thought all those inflationary cost movements would mean. I would say while the conflict in the Middle East is still not resolved, costs have largely stabilized as compared to our original estimates. So we are not changing our view of the way we estimated the cost to play out, versus what we provided in Q1. I will point out that the outlook we gave in Q1 did not have the full tariff refund benefit, but it was our intention for it to include the full inflationary cost impact in the outlook, and that remains the same. So those costs are included in our base business, not in the tariff refund benefit.

Speaker #2: I would say, while the conflict in the Middle East is still not resolved, the costs have largely stabilized as compared to our original estimates.

Speaker #2: So, we're not changing our view the way we estimated the cost to play out versus what we provided in Q1. And I'll point out that the outlook we gave in Q1 did not have the full tariff refund benefit, but it was our intention for it to include the full inflationary cost impact in the outlook, and that remains the same.

Speaker #2: So, those costs are included in our base business, not in the tariff refund benefit.

Speaker #3: That's very helpful. And then just one follow-up on just the illness incident. So I think previously, the expectation was would be that it would be in line.

Peter Grom: That is very helpful. Then just one follow-up on just the illness incidence. So I think previously the expectation would be that it would be in line with the prior 3 years. I think it is now expected to be slightly below. What is driving that? Is that just simply being more conservative, or is that something you are seeing more real time that is kind of driving that view?

Speaker #3: With the prior three years, I think it's now expected to be slightly below. Is that what's driving that? Is that just simply being more conservative, or is that something you're seeing in real time that's kind of driving that view?

Speaker #2: Yeah, I would just say initial indications are that it's trending to be lower, so we're just going to take that as a cue and be a little bit more conservative and not have an outlook that's depending on the strength of a cold and flu season.

Brian Grass: Yeah, I would just say initial indications are that it is trending to be lower, so we are just going to take that as a cue and be a little bit more conservative and not have an outlook that is depending on strength of a cold flu season.

Speaker #3: Great. Well, thank you so much. I'll pass it on.

Peter Grom: Great. Well, thank you so much. I will pass it on.

Speaker #2: Thank you, Peter.

Scott Uzzell: Thank you, Peter.

Speaker #1: Thank you. Our next question is coming from Bob Leybek of CJS Securities. Please go ahead.

Operator: Thank you. Our next question is coming from Bob Labick of CJS Securities. Please go ahead.

Speaker #5: Hi, good morning. Thanks for taking our questions.

Bob Labick: Hi. Good morning. Thanks for taking our questions.

Speaker #4: Bob. Good morning, Bob.

Scott Uzzell: Hey, Bob.

Brian Grass: Good morning, Bob.

Speaker #5: Hi, yeah, I wanted to discuss—can you talk about, I guess specific to Helen of Troy, your brands, your volume and pricing in the quarter, and then kind of category demand—where you're gaining share and losing share? And then, I guess, finally, what does it take to get consistent growth in beauty and wellness going forward?

Bob Labick: Hi. I wanted to discuss, can you talk about, I guess, specific to Helen of Troy and to your brands, your volume and pricing in the quarter, and then kind of category demand, where you are gaining share and losing share. Then, I guess finally, what does it take to get consistent growth in beauty and wellness going forward?

Speaker #4: Yeah, I'll kick off here. So I'd say this: you asked—the first part was where are we gaining share and where we see strength.

Scott Uzzell: Yeah, I will kick off on there. I would say this. You asked the first part was, where are we gaining share and where we see strength. I can tell you where we see strength. We definitely see strength in many pockets of our Home & Outdoor business, specifically OXO and Osprey. We see strength in our Olive & June, our nail business.

Speaker #4: I can tell you where we see strength. We definitely see strength in many pockets of our Home and Outdoor business, specifically OXO and Osprey.

Speaker #4: We see strength in our Olive and Juniper nail business. We see strength in our Bronze business, and many categories that we're in. From a beauty and wellness standpoint, it's a complicated category that's a prestige as well as a mass business at the same token.

Scott Uzzell: We see strength in our Braun business and many categories that we are in. From a Beauty & Wellness standpoint, it is a complicated category that is a prestige as well as a mass business at the same token. What I would say, here are the steps that we are taking. As I step back to FY27, I know you and I spent time together, that we are focused on getting the fundamentals right across our business by showing you markers of progress. Those markers of progress really fall into four buckets.

Speaker #4: But what I'd say here are the steps that we're taking. It's like, step back to FY '27. I know you and I spent time together, that we're focused on getting the fundamentals right across our business by showing you markers of progress.

Speaker #4: And those markers of progress really fall in four buckets. How do we begin to drive brand momentum? Because we fundamentally believe a better Helen of Troy is one that's built where brands are growing.

Scott Uzzell: How do we begin to drive brand momentum? Because I fundamentally believe a better Helen of Troy is one that is built where brands are growing. Second, how do we drive better commercial discipline? That is how we show up in the marketplace and follow the consumer shopping journey. How do we execute our capabilities across our enterprise better and more seamless? Then how do we drive balance sheet productivity? As we are 2 quarters into FY27 and 2 quarters into our comeback, we are making progress, but it is not even across our whole portfolio, as you can see in our performance, whether it be our Home & Outdoor had a very strong quarter. We had several brands within our Wellness portfolio that advanced. We had our international business make an advance.

Speaker #4: Second, how do we drive better commercial discipline? That's how we show up in the marketplace and follow the consumer shopping journey. How do we execute our capabilities across our enterprise better and more seamlessly?

Speaker #4: And then, how do we drive balance sheet productivity? As we're two quarters into FY27 and two quarters into our comeback, we're making progress, but it's not even across our whole portfolio.

Speaker #4: As you can see in our performance, whether it be our Home and Outdoor, we had a very strong quarter. We had several brands within our Wellness portfolio that advanced.

Speaker #4: We had our international business making advances. But when we get to beauty and wellness, which I believe I have aspirations for in the future, we're focused on a couple of things.

Scott Uzzell: When we get to Beauty & Wellness, which I believe I have aspirations for in the future, we are focused on a couple things. Getting the right people leading the business. We have made some critical changes there, and I am excited about the team that we have in place. Second, the strategy. We have got some good work going on in strategy on how do we participate in the market and engage both prestige and mass in the right way. Next, how do we pull new product development forward so we can bring it in front of the consumer at a more rapid pace? Then lastly, how do we bring omnichannel capabilities to market so that the consumer can follow us in the journey? All of those are under construction. I knew this year was going to be still a continued challenge year for our Beauty business.

Speaker #4: Getting the right people leading the business—we've made some critical changes there, and I'm excited about the team that we have in place. Second, the strategy.

Speaker #4: We've got some good work going on in strategy—on how we participate in the market and engage both prestige and mass in the right way.

Speaker #4: Next, how do we pull new product development forward so we can bring it in front of the consumer at a more rapid pace? And then lastly, how do we bring omnichannel capabilities to market so that the consumer can follow us in the journey?

Speaker #4: All of those are under construction. I knew this year was going to be a continued challenge for our beauty business, but I can tell you we're doing the work to set ourselves up for the future.

Scott Uzzell: I can tell you we are doing the work to set ourselves up for the future.

Speaker #2: I would just add a little bit, Bob, that dollars are better than units for us. But I would say that that's true of the market, largely in our category.

Brian Grass: I would just add a little bit, Bob, that dollars are better than units for us, but I would say that that's true of the market largely in our category. Not unusual with what the market trend is. We are looking at our price in a few areas to see if we need to recalibrate, and I think we will probably make some adjustments there.

Speaker #2: So, not unusual with what the market trend is. We are looking at our price in a few areas to see if we need to recalibrate, and I think we will probably make some adjustments there.

Speaker #2: But we're showing we're not where we want to be, but we're showing improving trends I'd say across the portfolio. I'd say beverage wear, hair care, and water filtration are areas where we weren't we didn't do so well in the quarter, but again, we see some indications of improvement, kind of across the portfolio.

Scott Uzzell: But we're not where we want to be, but we're showing improving trends, I'd say across the portfolio. I'd say beverageware, haircare, and water filtration are areas where we didn't do so well in the quarter, but again, we see some indications of improvement kind of across the portfolio.

Speaker #5: Okay, great. And then just kind of on my follow-up, you've talked about it a little bit, and I think you have a nice slide—looks like slide nine.

Bob Labick: Okay, great. And then just, kind of on my follow-up, you've talked about it a little bit, and I think you have a nice slide, looks like slide 9, in terms of where you're reinvesting the kind of tariff refund. I know you paid out more than you're getting back, but it's still new money right now. I was hoping you could kind of just dig a little deeper and summarize and elaborate for us on the reinvestment and really where and when kind of you expect to see benefits from that reinvestment kind of going forward.

Speaker #5: In terms of where you're reinvesting the kind of tariff refund—and I know you paid out more than you're getting back—but it's still new money, right now.

Speaker #5: And I was hoping you could kind of just dig a little deeper and summarize and elaborate for us on the reinvestment, and really where and when you expect to see benefits from that reinvestment going forward.

Speaker #4: Bob, great question. Yeah, and I know Brian and I will tag-team this. I go back to our strategy that I've been talking about for the last several quarters, that our path to where we are as a company did not happen overnight, and we needed to get back to basics.

Scott Uzzell: Oh, great question. Yeah. I know Brian and I will tag team this. I go back to our strategy that I've been talking about for the last several quarters, that our path to where we are as a company, it did not happen overnight and we need to get back to basics on making a better Helen of Troy. As we looked at the opportunity of regaining the tariffs, even although not all of them that we paid in, we really just said, "How do we make critical investments to do the fundamentals and the foundational elements of our business around brand investment, packaging, product development, the things that are going to not only pay dividends this year, but play for many years to come?" That's where we made our investment, while also giving some of it to pre-tax earnings.

Speaker #4: On making a better Helen of Troy. So, as we looked at the opportunity of regaining the tariffs, even though not all of them that we paid in, we really just said, "How do we make critical investments to do the fundamentals and the foundational elements of our business around brand investment, packaging, product development—the things that are going to not only pay dividends this year but pay for many, many years to come?" And that's where we made our investment, while also giving some of it to pre-tax earnings.

Speaker #4: What Brian will do is give you a little bit more specificity, but the tariff refunds are really around accelerating the work to build the foundational elements for Helen of Troy to make us better for the future.

Scott Uzzell: What Brian will do is give you a little bit more specificity, but the tariff refunds are really around accelerating the work to build the foundational elements for Helen of Troy to make us better for the future.

Speaker #2: Yeah, Bob, I kind of view it as an investment, and the expression I often use is 'putting problems behind us.' If there were things in the past with your organic business that were harder to digest, I view the tariff refund benefit as an opportunity to digest those costs and put them behind us. Things like cleaning up inventory, the packaging—if we can pull things forward, things that we had on the roadmap that we already know we need to do—if we can pull them forward into this tariff refund period, that's what we're trying to do.

Brian Grass: Yeah, Bob, I kind of view it as investment and, an expression I often use, putting problems behind us. If there were things that, in the past with the organic business that were harder to digest, I view tariff refund benefit as an opportunity, digest those costs, put it behind us. Things like cleaning up inventory, the packaging. If we can pull things forward, things that we had on the roadmap that we already know that we need to do, if we can pull them forward into this tariff refund period, that's what we are trying to do. And then there is all of the things Scott was talking about, brand investment and even the creating content.

Speaker #2: And then there are all the things Scott was talking about—brand investment, and even creating content. You can phase that out over time, or you can pull that forward and do it in a period, get that out of the way, and then you’ve got your content developed and can go forward with it.

Brian Grass: You can phase that out over time or you can kind of pull that forward and do it in a period and get that out of the way, and then you have got your content developed, and you can go forward with it. So, I kind of think of it as it is an investment and it is traditional and you get an ROI and all that kind of stuff, but I also view it as trying to be clean going into FY28. We want our inventory to be clean. We want to pull forward as much cost as possible so that we do not have to bear the cost in FY28. So there is a blend, and we try to break it into kind of four buckets of what we call foundational investment.

Speaker #2: So, I kind of think of it as an investment. It's traditional, and you get an ROI and all that kind of stuff, but I also view it as trying to be clean going into fiscal '28.

Speaker #2: We want our inventory to be clean. We want to pull forward as much cost as possible so that we don't have to bear the cost in fiscal 2028.

Speaker #2: So there's a blend that we try to break it into kind of four buckets of what we call foundational investment. That's just investment that you need to do before you can do kind of the high-return media spending.

Brian Grass: That is just investment that you need to do before you can do kind of the high return media spending. You have got to have your foundation correct, and that relates to consumer insights and things like that. Growth strategy, we invested in our growth strategy as a part of this. So the weight of the two buckets that will not have an immediate return are kind of the foundational bucket and the longer-term bucket on the slide that I think we do get a huge benefit for and set us up for success in FY28, but are not going to provide an immediate return. And then there is kind of a near-term bucket that will have a FY27 ROI, and that is about 25% of the spend, and then the remainder goes to pre-tax earnings.

Speaker #2: You’ve got to have your foundation correct, and that relates to consumer insights and things like growth strategy. We invested in our growth strategy as a part of this.

Speaker #2: And so the weight of the two buckets that won't have an immediate return are kind of the foundational bucket and the longer-term bucket on the slide, that I think we do get a huge benefit for and set us up for success in fiscal '28, but aren't going to provide an immediate return. And then there's kind of a near-term bucket that will have a fiscal '27 ROI, and that's about 25% of the spend, and then the remainder goes to pre-tax earnings.

Speaker #2: But that's kind of how we tried to bucket the spend. It's a lot of investment, but it's also a lot of putting problems behind us.

Brian Grass: But that is kind of how we tried to bucket the spend and it is a lot of investment, but it is also a lot of putting problems behind us.

Speaker #5: Great, appreciate that. Thanks very much.

Bob Labick: Great. Appreciate that. Thanks very much.

Speaker #1: Thank you. The next question is coming from Olivia Tong of Raymond James. Please go ahead.

Operator: Thank you. The next question is coming from Olivia Tong of Raymond James. Please go ahead.

Speaker #6: Great, thanks. Good morning. I want to unpack the revenue outlook a bit. The guide implies growth deceleration in the second half for Home and Outdoor, but some improvement in the rate of decline on Beauty and Wellness.

Olivia Tong: Great. Thanks. Good morning. I want to unpack the revenue outlook a bit. The guide implies growth deceleration in the H2 for Home and Outdoor, but some improvement in the rate of decline on Beauty and Wellness. Can you talk about what drives the sort of reversion to the mean on both? Then specifically on Home and Outdoor, you saw growth accelerating in Q2, but you lowered the full year outlook. Can you talk about the drivers there? Then just lastly, a key competitor for Hydro Flask outlined long-term targets recently, which I am sure you saw, made the high single-digit sales, higher margins. As you think about the long-term opportunities for Hydro Flask and your drinkware business, what is your view on the growth of the category and then your ability to capture that? Thanks.

Speaker #6: So, can you talk about what drives the sort of reversion to the mean on both? And then specifically on Home and Outdoor, you saw growth accelerating in Q2, but you lowered the full-year outlook.

Speaker #6: So, can you talk about the drivers there? And then just lastly, a key competitor for Hydro Flask outlined long-term targets recently, which I'm sure you saw. They made the high single-digit sales and higher margins.

Speaker #6: So, do you think about the long-term opportunity for HydroFlask in your drinkware business? What do you think about—what's your view on the growth for the category, and then your ability to capture that?

Speaker #6: Thanks.

Speaker #4: Olivia, this is Scott. Thank you. I'll take a quick part, and then Brian will tag team it. I'd say this, first from an affirm and outlook standpoint—I mean, let me just say, there's a lot here.

Scott Uzzell: Olivia, this is Scott. Thank you. I will take a quick part and then Brian will tag team it. I would say this, first from an outlook standpoint. Let me just. It is a lot here. So basically this, I go back to that this year was about building markers of progress for our company and trying to get the foundational elements right. We are leveraging tariff refunds and really the hard work and the discipline of this team to be sharper on fewer things to drive more impact in the marketplace, all with the intent that we know a healthy Helen of Troy is one that is built where brands are growing and winning in their categories. We know that that is not evenly spread across all brands, but we are making progress there. That is kind of one.

Speaker #4: So, basically, I go back to this—this year was about building markers of progress for our company, and trying to get the foundational elements right.

Speaker #4: And we're leveraging tariff refunds, and really the hard work and discipline of this team, to be sharper on fewer things to drive more impact in the marketplace—all with the intent that we know a healthy Helen of Troy is one that's built where brands are growing and winning in their categories.

Speaker #4: We know that that is not evenly spread across all brands, but we're making progress there — that's kind of one. Two, from an outlook standpoint, when I think about the balance of the year, and we're two quarters into our transformation; it's a multi-year plan.

Scott Uzzell: From an outlook standpoint, when I think about the balance of the year, and we are 2 quarters into our transformation, it is a multi-year plan. Then I look at the state of the consumer, and when I say the state of the consumer, I think the consumer will continue to pursue great innovation, great products, great marketplace. But I believe that there are more headwinds in the consumer space than there were a year ago versus winds at their back, whether it be fuel, interest rates, just running their lives. That as I think about, A, where we are in the stage of our transformation and our comeback, as well as the state of the consumer, it is one of let us continue to do the basics to build our business and continue to drive markers of progress against the commitments we have made to the marketplace.

Speaker #4: And then I look at the state of the consumer, and when I say the state of the consumer, I think the consumer will continue to pursue great innovation, great products, and a great marketplace. But I believe that there are more wins in the consumer space than there were a year ago.

Speaker #4: Versus wins that they're back—whether it be fuel, interest rates, just running their lives. As I think about, A) where we are in the stage of our transformation and our comeback, as well as the state of the consumer, it's one of: let's continue to do the basics to build our business and continue to drive markets of progress against commitments we've made to the marketplace.

Speaker #4: That's kind of been our focus. The next double-click around the insulated beverage category, specifically Hydro Flask. I still have really, really high confidence in Hydro Flask.

Scott Uzzell: That is kind of been our focus. The next double click around the insulated beverage category, specifically Hydro Flask. I still have really, really high confidence in Hydro Flask and high confidence in that team. What I can tell you as we focus on in FY27 and FY28 for that brand, it is really around how do we talk to the consumer that loves the brand, that calls it the OG of the category, that believes that the brand identifies with them from an inclusivity standpoint, from about moments outdoors, that we know there is a following there. So how do we story tell and connect with that consumer? That team is doing work to make sure we are driving the right marketing message.

Speaker #4: I have confidence in that team. What I can tell you as we focus on in FY 27 and FY 28 for that brand, it's really around how do we talk to the consumer that loves the brand, that calls it the OG of the category, that believes that the brand identifies with them from an inclusivity standpoint, from about moments outdoors, that we know there's a following there.

Speaker #4: So, how do we storytell and connect with that consumer? That team's doing work to make sure we're driving the right marketing message. Second, we're innovating within the category to bring new news, like micro-hydro and many other products that are relevant to that category, to make sure that we continue to hold our premium position while making sure we're bringing new news to the category.

Scott Uzzell: Second, we are innovating within the category to bring new news like Micro Hydro and many other products that are relevant to that category to make sure that we continue to hold our premium position, but making sure we are bringing new news to the category. Then third, which I think is the most significant unlock, is moving to adjacencies, where we can take the brand that is already connected with a following to other needs that build on the ethos of Hydro Flask, not only for today, for the future. That work is underway.

Speaker #4: And then third, which I think is the most significant unlock, is moving to adjacencies where we can take the brand that's already connected with a following to other parts of other needs that build on the ethos of Hydro Flask not only for today but for the future.

Speaker #4: And that work is underway.

Speaker #2: Yeah, Olivia, I'd add on to that with respect to the slowdown in Home and Outdoor sales in the second half—or not slowdown, but the change in our outlook.

Brian Grass: Yeah, Olivia, I would add on to that with respect to the slowdown in Home and Outdoor sales in the second half, or not slowdown, but the change in our outlook. The beverageware category as a whole is a little bit saturated, and we see that environment becoming promotional. We want to maintain our positioning, and you kind of referred to another competitor that is putting out long-term outlook for high growth. I think that is because they have been able to maintain the positioning, and we want to be able to try and do the same thing. So we will not participate so much in that promotional environment. Because of the saturation that we see, it will put pressure on our second half.

Speaker #2: The beverageware category as a whole is a little bit saturated, and we see that environment becoming promotional. We want to maintain our positioning, and you kind of referred to another competitor that is putting out a long-term outlook for high growth.

Speaker #2: I think that's because they've been able to maintain their positioning, and we want to be able to try and do the same thing. So we won't participate so much in that promotional environment.

Speaker #2: And because of the saturation that we see, it'll put pressure on our second half. We also see some inventory correction needed in the channel in the beverageware category, and so we're hoping that will play out in the second half of the year, and that we're in a cleaner position going into fiscal 2028.

Brian Grass: We also see some inventory correction needed in the channel in the beverageware category, and so we are hoping that will play out in the second half of the year and that we are in a cleaner position, going into FY28. Then with respect to better Beauty and Wellness, as we have been saying, we have been seeing improving trends, in particular in the wellness part of the business, and that is playing itself out and us raising our outlook a little bit. We have got some strengths that is building in the wellness part of the portfolio.

Speaker #2: And then, with respect to Better Beauty and Wellness, as we've been saying, we've been seeing improving trends, in particular in the wellness part of the business, and that's playing itself out in us raising our outlook a little bit.

Speaker #2: We've got some strength that is building in the wellness part of the portfolio.

Speaker #6: Great. Thanks, guys. Appreciate it.

Olivia Tong: Great. Thanks, guys. Appreciate it.

Speaker #1: Thank you. Our next question is coming from Susan Anderson of Canaccord Genuity. Please go ahead.

Operator: Thank you. Our next question is coming from Susan Anderson of Canaccord Genuity. Please go ahead.

Speaker #7: Hi, good morning. Thanks for taking my question. It's good to see the progress in the quarter. I guess I have a follow-up on Olivia's question.

Susan Anderson: Hi. Good morning. Thanks for taking my question. Good to see the progress in the quarter. I guess maybe just a follow-up on Olivia's question, really quick, just on the lower sales expectation in the back half for Home and Outdoor. I guess, is it just Hydro Flask really that you are expecting to be a little bit more pressure, but the other brands you expect to continue to grow nicely? And then also just looking at the growth in the quarter for Home and Outdoor, I was just curious, how much of it was driven by new space gains and international growth versus the growth in the US? Thanks.

Speaker #7: Really quick, just on the lower sales expectation in the back half for Home and Outdoor — I guess, is it just Hydro Flask really that you're expecting to be a little bit more pressured, but the other brands you expect to continue to grow nicely?

Speaker #7: And then, also, just looking at the growth in the quarter for Home and Outdoor, I was just curious how much of it was driven by new space gains and international growth versus the growth in the US.

Speaker #7: Thanks.

Speaker #2: So, on the first question, yes, Hydro is the driver of the Home and Outdoor revision to our outlook for revenue. The second question, I don't know if we have it broken apart.

Brian Grass: On the first question, yes, Hydro is the driver of the Home and Outdoor revision to our outlook for revenue. The second question, I do not know if we have it broken apart. I would say there was kind of equal using all levers for growth in terms of new product introductions, distribution, category expansion, international, which international is doing a combination of those, using a combination of those levers to grow. We are excited that in international, we have got some new partnerships there that we are really leaning into and are excited about and seeing good traction from. So it is kind of pulling all the levers, Susan, I would say. I would not say there is one that outweighs the other. We are trying to have a balanced growth platform.

Speaker #2: I would say there was kind of equal use of all levers for growth in terms of new product introductions, distribution, category expansion, and international. International is doing a combination of using those levers to grow.

Speaker #2: We're excited that on the international side, we've got some new partnerships there that we're really leaning into and are excited about, and we're seeing good traction from.

Speaker #2: So it's kind of pulling all the levers, Susan, I would say. I wouldn't say there's one that outweighs the others. We're trying to have a balanced growth platform.

Speaker #7: Okay, great. And then I guess just in Beauty and Wellness, maybe if you could talk about kind of the puts and takes for top-line growth in the back half versus what you saw in the first half.

Susan Anderson: Okay, great. And then I guess just in Beauty and Wellness, maybe if you could talk about kind of like the puts and takes for top-line growth in the back half versus what you saw in the first half, and then just on the prestige beauty side and hair tools, how are you thinking about kind of like that sequential trajectory? Are you starting to see sales improve at least sequentially? And when do you think you could kind of get an inflection in the category? Thanks.

Speaker #7: And then just on the prestige beauty side and hair tools, how are you thinking about kind of like that sequential trajectory? Are you starting to see sales improve at least sequentially and when do you think you could kind of get an inflection in the category?

Speaker #7: Thanks.

Speaker #4: So, this is Scott. I always like to step back. When I stepped back six months ago and looked at FY 27—and at that point, I was six months into my job—I knew that we had a lot of opportunity across our portfolio.

Scott Uzzell: Susan, this is Scott. I always like to step back. When I stepped back 6 months ago, and I looked at FY27, and at that point, I was 6 months into my job, I knew that we have a lot of opportunity across our portfolio. As we approached FY27, as I talked about in the past, that I knew there were categories and brands that I felt like were ready for kind of fully funded growth plans for FY27 because the consumer is ready, the team is ready, the pipeline is ready, let us go to market. And we made those investments. Then we had a group of brands in the middle that we probably wanted to fund higher, but we said they are ready to move forward, but still we cannot do everything, and we funded those.

Speaker #4: And as we approached FY27, as I talked about in the past, I knew there were categories and brands that I felt were ready for fully funded growth plans for FY27, because the consumer is ready, the team is ready, and the pipeline is ready.

Speaker #4: Let's go to market. And we made those investments. Then we had a group of brands in the middle that we probably wanted to fund higher, but we said they're ready to move forward; still, we can't do everything, and we funded those.

Speaker #4: And then, in the Beauty business specifically, we knew this year was going to be a challenging year. We know that we've got new people on the business.

Scott Uzzell: In the beauty business specifically, we knew this year was going to be a challenging year. We know that we've got new people on the business. We've got a new product pipeline we're trying to pull forward. We were still working on our storytelling, and we're preparing ourselves for the future. We definitely want to do better for our beauty business, but we expected this year to continue to be a challenging business. Brian, would you like to add?

Speaker #4: We've got a new product pipeline we're trying to pull forward. We are still working on our storytelling, and we're preparing ourselves for the future.

Speaker #4: So we definitely will be—we want to do better with our Beauty business, but we expect that this year will continue to be a challenging business.

Speaker #4: Brian?

Speaker #2: Yeah, I'd just add that in the prestige part of Beauty, it's up against some close-out noise in the prior year, where we had some specific activity that was pretty lumpy in the prior year.

Brian Grass: Yeah, I'd just add that in the prestige part of beauty, it's up against some closeout noise in the prior year where we had some specific activity that was pretty lumpy in the prior year. So that's driving a little bit of the decline. We are seeing improving trends, even though the results are not where we want them to be. We're seeing some improving trends in the POS data. Then, if you kind of look at mass beauty, we're assessing whether we need to recalibrate on some pricing, in particular in Revlon, and so we think that's going to help the performance there when we get that right. Then we're really happy with wellness. We're happy with where wellness is going and the trends there, and I would say we're really, really happy with Olive & June.

Speaker #2: So that's driving a little bit of the decline. We are seeing improving trends, even though the results are not where we want them to be.

Speaker #2: We're seeing some improving trends in the POS data. And then, if you kind of look at mass beauty, we're assessing whether we need to recalibrate on some pricing, in particular with Revlon, and so we think that that's going to help the performance there when we get that right.

Speaker #2: And then we're really happy with Wellness. We're happy with where Wellness is going and the trends there. And I would say we're really, really happy with Olive & June.

Speaker #7: Okay, great. Thanks so much. Good luck this holiday season.

Susan Anderson: Okay, great. Thanks so much. Good luck this holiday season.

Speaker #2: Thank you.

Scott Uzzell: Thank you.

Speaker #4: Thank you.

Brian Grass: Thank you.

Speaker #1: Thank you. At this time, I'd like to turn the floor back over to Mr. Rizell for closing comments.

Operator: Thank you. At this time, I would like to turn the floor back over to Mr. Uzzell for closing comments.

Speaker #4: Yeah, I want to say thank you, everyone. Oh, God. Yeah, closing comments. Yeah, thank you very much for spending time with us this morning.

Scott Uzzell: Yeah, I want to say thank you, everyone. Closing comments, yeah. Thank you very much for spending time with us this morning. We are pleased with the quarter and continued progress on our multi-year roadmap to growth. This year is about putting markers on the board and getting back to restoring brand momentum, standing up a new operating model, and continued focus on balance sheet productivity. Thank you for spending time with us this morning, and have a wonderful day. Thank you.

Speaker #4: We're pleased with the quarter and the continued progress in our multi-year roadmap to growth. This year is about putting markers on the board and getting back to restoring brand momentum.

Speaker #4: Standing up a new operating model and continuing our focus on balance sheet productivity. Thank you for spending time with us this morning, and have a wonderful day.

Speaker #4: Thank you.

Speaker #1: Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time. And enjoy the rest of your day.

Operator: Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.