Helen of Troy's personal care sales fall further
fourth quarter reporting a 7.1 percent drop in sales that it blamed
on the tough retail environment.
Sales in the division fell to $107m pushing down the overall sales figures that were kept on an even keel by the high turnover of household products. Houseware outperforms personal care Total net sales for the three months ending February, 29 increased slightly to $144.1m from $143.8m as sales in the household segment jumped 21.9 percent. For the full fiscal year, the sales figures were slightly rosier as a 2.8 percent increase in turnover was recorded taking the company's top line to $652.5m. Meanwhile personal care sales for the year were down 1.9 percent to $488.4m. Commenting on the sales performance, Helen of Troy's CEO Gerald Rubin said: "The domestic retail environment continues to be challenging and is expected to continue that way for at least another two quarters." Cost cutting strategy To combat the tougher retail conditions the maker of Revlon and Vidal Sassoon hair care products resolved to cut costs and increase its margins. However, over the fourth quarter operating margins fell three percentage points to 9.3 percent and operating profit therefore dropped 2.3 percent to $13.4m. Looking at the full year figures Helen of Troy's cost reduction strategies appeared to be more successful as SG&A expenses were 31.8 percent of sales compared to 32.9 percent of sales in the previous year. "Our ongoing efforts to reduce SG&A expenses as a percent of sales are reflected in our results for the full year, and we continue to focus on expense reduction," said Rubin. The lower costs helped maintain bottom line growth with operating profit for the full year increasing 3 percent and net earnings rising 23 percent to $61.5m. Regarding the future of its personal care division Helen of Troy said it was re-evaluating its current product mix and working to improve the gross margins of Belson products by shifting its sourcing to lower cost providers. Helen of Troy bought Belson in May last year to widen its share of the salon market but the integration of the business seems to have had a detrimental effect on total sales during 2007.
