Helen of Troy Q2 2020 sales up 5.2%Christian Fernsby ▼ | October 8, 2019
Helen of Troy reported results for the 2020 second quarter ended August 31, 2019.
Helen of Troy Consolidated net sales revenue increased 5.2%
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These factors were partially offset by lower sales in the Health & Home segment, the unfavorable impact from foreign currency fluctuations of approximately $1.9 million, or 0.5%, and a decline in the personal care category within the Beauty segment.
Consolidated gross profit margin increased 3.6 percentage points to 43.0%, compared to 39.4%.
The increase is primarily due to a higher mix of Housewares revenue at a higher overall gross profit margin, tariff exclusion refunds received for certain duties expensed in the second half of fiscal 2019 and the first quarter of 2020, and a lower mix of shipments made on a direct import basis.
These factors were partially offset by the net margin dilutive impact from tariffs and related pricing actions, unfavorable foreign currency fluctuations, a lower mix of personal care sales, and higher inbound freight expense.
Consolidated SG&A as a percentage of sales increased by 3.5 percentage points to 29.8% of net sales compared to 26.3%.
The increase is primarily due to higher annual incentive and share-based compensation expense related to short- and long-term performance, the unfavorable impact of a lower mix of shipments made on a direct import basis, higher outbound freight expense, higher advertising and new product development expense, and higher amortization expense.
These factors were partially offset by the impact from tariff related pricing actions taken with retail customers, the impact that higher overall sales had on net operating leverage, and the favorable impact from foreign currency exchange and forward contract settlements.
Consolidated operating income was $54.5 million, or 13.2% of net sales, compared to $50.7 million, or 12.9% of net sales.
The increase in consolidated operating margin primarily reflects tariff exclusion refunds received for certain duties expensed in the second half of fiscal 2019 and the first quarter of 2020, a higher mix of Housewares sales at a higher overall operating margin, the impact of favorable foreign currency exchange contracts and remeasurement on SG&A, the favorable impact that higher overall net sales had on operating expense leverage, and the net favorable comparative impact of pre-tax restructuring charges of $0.4 million.
These factors were partially offset by higher annual incentive and share-based compensation expense related to short- and long-term performance, higher advertising and new product development expense, higher amortization expense, higher freight and distribution expense, and the impact of unfavorable foreign currency fluctuations on net sales and operating margin. ■