Helen of Troy Q1 2016 net sales revenue increased 10.8%
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SG&A was 32.9% of net sales compared to 28% of net sales for the same period last year.
Foreign currency fluctuations decreased consolidated U.S. Dollar reported net sales revenue by $7.7 million, or 2.5%, year-over-year. Additionally, the impact of the West Coast port disruption negatively impacted net sales revenue, primarily in the Beauty segment.
Gross profit margin increased 3.2 percentage points to 41.5% compared to 38.3% for the same period last year. This increase reflects the impact of the Nutritional Supplements segment and the recent acquisition of VapoSteam, which had a combined favorable impact of 4 percentage points on the consolidated gross profit margin.
Gross profit margin for the core business declined by 0.8 percentage points primarily due to the unfavorable impact of foreign currency fluctuations.
SG&A was 32.9% of net sales compared to 28% of net sales for the same period last year. The increase is primarily due to a higher relative SG&A ratio in the Nutritional Supplements segment, which increased the SG&A ratio by 4.2 percentage points.
The SG&A ratio in the core business increased 0.8 percentage points, primarily due to higher year-over-year net foreign currency exchange losses of $0.9 million, as well as higher compensation expense and investments in advertising, marketing and product development.
Operating income was $26.5 million compared to $23.1 million for the same period last year. Operating income for the fiscal quarter ended May 31, 2015 includes non-cash asset impairment charges of $3.0 million, compared to $9.0 million for the same period last year.
Income tax expense as a percentage of pretax income was 14.2% compared to 17.0% for the same period last year. The year-over-year comparison of our effective tax rate was primarily impacted by shifts in the mix of taxable income in our various tax jurisdictions.
Net income was $20.4 million, or $0.70 per diluted share on 29.1 million weighted average diluted shares outstanding. This compares to net income in the first quarter of fiscal year 2015 of $16.4 million, or $0.55 per diluted share on 29.6 million weighted average diluted shares outstanding.
Net income for the fiscal quarter ended May 31, 2015 includes after-tax non-cash asset impairment charges of $2.7 million, compared to $8.2 million for the same period last year.
Adjusted EBITDA (EBITDA excluding non-cash asset impairment charges and non-cash share-based compensation, as applicable) was $42.1 million compared to $41.9 million in the same period last year.
The company is maintaining its fiscal year 2016 outlook. For fiscal year 2016, the company continues to expect consolidated net sales revenue in the range of $1.485 to $1.536 billion and diluted EPS (GAAP) in the range of $4.33 to $4.73.
This includes expected sales and diluted EPS from VapoSteam. The company continues to expect sales and diluted EPS (GAAP) from the VapoSteam acquisition to be in the range of $10 million to $11 million and $0.03 to $0.08, respectively, for the eleven months included in our fiscal year 2016 results.
The company continues to expect consolidated adjusted diluted EPS (non-GAAP) to be in the range of $5.40 to $5.85, which excludes after-tax non-cash asset impairment charges, non-cash share-based compensation expense and intangible asset amortization expense. This includes expected sales and adjusted diluted EPS from VapoSteam.
The company continues to expect adjusted diluted EPS (non-GAAP) for VapoSteam to be in the range of $0.04 to $0.11, which excludes after-tax non-cash share-based compensation expense and intangible asset amortization expense.
The company’s fiscal year 2016 outlook assumes current foreign currency exchange rates for the remainder of the fiscal year, which are expected to negatively impact year-over-year net sales revenue by approximately $28.0 million, net income by approximately $17 million, and earnings per share by approximately $0.59.
The diluted EPS outlook is based on an estimated weighted average shares outstanding of 29.0 million for the full fiscal year 2016. Further, the company’s guidance assumes that the severity of the cold/flu season will be in line with historical averages.
The likelihood and potential impact of any fiscal year 2016 acquisitions other than VapoSteam, future asset impairment charges, future foreign currency fluctuations, including any potential currency devaluation in Venezuela, or share repurchases are unknown and cannot be reasonably estimated; therefore they are not included in the company’s sales and earnings outlook.
As previously disclosed, in fiscal year 2015 the company benefitted from an after-tax gain of $0.24 per share from the amendment of a license agreement, an after-tax decrease in product liability estimates of $0.05 per share and tax benefits of $0.15 per share that are not expected to repeat in fiscal year 2016.
These items negatively impact the year-over-year comparison of adjusted diluted EPS by a combined $0.44. ■