Consumer brand consolidator Helen of Troy reported that its Home & Outdoor segment, which includes the Osprey, Hydro Flask and OXO businesses, saw net sales increase 5.4 percent over the prior-year period due to growth in the OXO home category, Hydro Flask insulated beverageware, Osprey Packs and Travel and International.

Segment revenues totaled $223.3 million for the three-month period ended February 29, 2024, compared to $211.9 million in the prior-year comparative period.

The increase for the quarter was reportedly driven by 5.1 percent growth from Organic business, primarily from the rise in home category sales in the brick-and-mortar and club channels, higher Hydro Flask insulated beverageware sales, driven by its new travel tumbler, and International growth, primarily driven by demand for Osprey travel packs. These factors were partially offset by the unfavorable impact of the Bed, Bath & Beyond bankruptcy and a decrease in online channel sales in the travel pack and home categories.

OXO was highlighted as the number one branded line in the kitchen utensils and canister food storage categories while gaining share in kitchen utensils over the last 12-month period. The brand achieved strong results driven by distribution gains in the mass channel, the timing of club promotional programs and strength and new distribution in grocery. At Walmart, the OXO soft work kitchen gadgets expanded, and the brand added a grilling line.

Hydro Flask
Hydro Flask was said to have performed well online in the quarter, driven by the continued positive reception of its new travel tumbler, seasonal colors and promotion, and post-holiday replenishment. International, particularly EMEA, is seen as a growth opportunity.

“We are excited about where we are heading on this key brand,” shared company CEO Noel Geoffroy, “Being consumer-obsessed with Hydro Flask means launching on-trend color, design, style, customization, and personalization options.

Geoffroy said the brand needed to offer different container and cap configurations to meet the needs of various consumer use occasions, whether in the car, at the gym, in the park, around the house or at school.

“We are also evolving our marketing content and targeting with support of our new marketing center of excellence, allowing us to better connect with our Hydro Flask consumer with the right message in the right place at the right time,” the CEO said.

“You’ll see us expand on these concepts with new product offerings such as the new Sugar Crush limited edition available in bottles and travel tumblers featuring a beautiful waterfall of pastel colors and the new insulated shaker bottle designed with an internal whisk ball perfect for mixing a smoothie or protein shake,” said Geoffroy, and added that the company would further expand distribution of Hydro Flask in fiscal 2025.

“Hydro Flask tumblers do continue to be where a lot of the growth and where a lot of the energy is we think about kind of a Gen Z, female target that you know looks at these not only for the functionality but also a great design to match their personal style,” Geoffroy said. “I do think, as a result of what I just said, the colors like Sugar Crush that we did a limited launch on in on DTC that moves very, very quickly.”

Geoffrey also mentioned some customer exclusives, like the Blossom colorway, that they have in partnership with a sporting goods partner.

“So these sorts of things are very interesting to the consumer. They’re very willing to purchase multiples if it’s a color or design or a special edition that they have to have. Configurations of shapes, caps etc… are also going to be important. One of the other ones I mentioned that we launched, and that is off to a nice start, is the insulated shaker bottle. Really great for smoothies or protein shakes, etc… That’s the new shape that’s coming.”

The CEO said to expect to see more configurations and different formats as the year progresses to meet different occasions as they have done more work to understand their target consumer and distribution opportunities.

“This is a brand as we expand the target consumer where we need to be where those shoppers are shopping,” Geoffrey emphasized. She also said personalization and customization are a big part of this category, and their new capability in the company’s new facility in Tennessee would only make them better in that area.

Regarding pricing and promotions, Geoffroy said the company made select adjustments to some Hydro Flask items, looked across the Hydro Flask assortment and some of the competitive assortment, and found a few places they could be sharper. “But I don’t see major other changes and less dynamics, kind of evolve over the year,” she said.

Osprey Packs
Geoffroy said Osprey sales should strengthen internationally with growth in EMEA and APAC due to demand for travel packs. In North America, she said the brand made further inroads with key sporting goods retailers. “For fiscal 2024, overall U.S. brand share strengthened for luggage, and we extended our number one position in technical packs,” Geoffrey noted. “Osprey’s focus remains on making the world’s best past suited for a wide range of activities featuring our unique and superior design craftsmanship and commitment to sustainability, all backed by our All Mighty Guarantee.”

Geoffrey said Osprey’s new collection continues to build on the brand’s strengths and heritage, including new designs for occasions like biking, day packs and inclusive sizes so everyone can experience the outdoors with the best gear.

“Perfect examples are three new additions to Osprey’s extended fit line of packs, which became available this spring and are already garnering positive consumer response on social media,” Geoffrey elaborated. “Osprey’s Farpoint 55 travel pack has also been a hit, achieving 4.6 stars in Amazon out of over 1300 reviews. We believe Osprey has a bright future ahead, building on its strengths, continuing to extend into new adjacencies and leveraging the Helen of Troy operational and organizational scale.”

International
Geoffroy said International posted double-digit growth in the quarter as the company benefited from more focused strategic choices on must-win brands and markets, strengthening distribution and distributor partnerships and implementing a more integrated organizational structure of the EMEA team.

While growth was driven by performance in EMEA with demand for both Braun and Revlon in the Beauty segment, Geoffroy also called out Hydro Flask benefitting from the company’s new strategic outdoor sports lifestyle and travel initiatives in Europe while leveraging Osprey’s European distribution footprint to accelerate growth.

“We will continue to prioritize international growth leveraging the must-win brand and market choices selected and elevate for growth,” Geoffrey said.

While the commentary was mostly positive, there was one note of caution on the call as company CFO Brian Grass noted that the company is still seeing pockets of higher inventory in the outdoor channel, both domestically and internationally.

Geoffroy added that as the company looked across the outdoor market, it saw a little bit more elevated inventory, but not necessarily in their areas per se, but more so across the entire store inventory. Geoffrey’s concern is the resulting lower open-to-buy in Osprey’s areas and in other areas where they are managing their total inventory levels. She referenced that the tech path for the company is on Osprey.

“Obviously, the core of the business, is that we have a very strong number one position,” she noted. “We extended that number one position over the last year, but the category has slowed versus where it was.”

Geoffrey said the company does see growth in some of the other adjacent categories that Osprey has entered.

“So some areas like duffels and travel packs and lifestyle packs, etc… show a little bit more growth,” Geoffroy added. “But we called out kind of the pocket of inventory outdoors because we were seeing it both domestically and internationally.”

Segment Operating Profit
On a segment basis, Home & Outdoor adjusted operating margin increased 160 basis points to 18.7 percent of net sales, driven by lower commodity and inbound freight costs, lower trade discount promotional program expense, and decreased inventory reserve expense. These factors were partially offset by higher expenses associated with ramping the company’s new Tennessee distribution facility, an increase in annual incentive compensation expense, and a less favorable customer and product mix.

The segment operating margin was notable because it exceeded the total company operating margin by 520 basis points.

Guidance
Looking ahead, the company expects Home & Outdoor growth of 1 percent to 4 percent for the year ahead.

Image courtesy Osprey