Helen of Troy CFO sees 10% annual adjusted EPS growth in FY25

Helen of Troy CFO Brian Grass said during the company’s investor day meeting, according to a transcript of the event: “Taking a step back, we thought it would be helpful to review some highlights from the past five years and leave you with some takeaways as to why we think we’re set up for success going forward. We are not satisfied with our recent year over year performance. We are pleased with our overall phase two results… We estimate strong financial outcomes over the course of the plan built with bottoms up organic revenue by brand acquisition and divestiture inputs and required investment inputs. We considered multiple scenarios before selecting the one we believe is most representative of our potential outcome. We modeled reasonable acquisition impacts for illustrative purposes and are presenting with and without. We included Pegasus savings in line with our disclosures and assumed $100 million of share repurchase annually as a baseline. Finally, we assume commodity and freight costs to remain largely at current levels… . So absent any reinvestment, we believe we could drive 26% earnings growth in fiscal 25. But that’s not the plan. We expect to invest roughly two thirds of that profit improvement back into brand building and new product development to feed the flywheel, which leaves roughly 10% for annual adjusted EPS growth. And we think we can rinse and repeat each year during Elevate for growth. Adding in operating leverage is yet another driver, beginning in fiscal 26. We believe that rinse and repeat cycle will provide significant fuel to re-accelerate the flywheel but also allow us to jump from roughly 6% of net sales to roughly 9% of net sales in terms of growth investment because of the fuel from Pegasus. We plan the majority of that jump to occur in fiscal 25 and 26 with maintained higher levels thereafter.”