Greetings. Welcome to Helen of Troy Limited Q3 fiscal 2023 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Jack Jancin, Senior Vice President of Corporate Business Development. Thank you. You may begin. Thank you, operator. Good morning, everyone, and welcome to Helen of Troy Q3 fiscal 2023 earnings conference call. The agenda for the call this morning is as follows. I'll begin with a brief discussion of forward-looking statements. Mr. Julien Mininberg, the company's CEO, and Noel Geoffroy, the company's COO, will comment on business performance of the quarter, Project Pegasus, and current trends. Mr. Matt Osberg, the company's CFO, will review the financials in more detail and provide an update on our financial outlook for fiscal 2023. Following this, we will take questions you have for us today. This conference call may contain certain forward-looking statements that are based on management's current expectation with respect to future events or financial performance. Generally, the words anticipates, believes, expects, and other words similar are words identifying forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties that could cause anticipated results to differ materially from the actual results. This conference call may also include information that may be considered non-GAAP financial information. These non-GAAP measures are not an alternative to GAAP financial information and may be calculated differently than the non-GAAP financial information disclosed by other parties. The company cautions listeners not to place undue reliance on forward-looking statements or non-GAAP information. Before I turn the call over to Mr. Mininberg, I'd like to inform all interested parties that a copy of today's earnings release has been posted to the investor relations section of the company's website at www.helenoftroy.com. The earnings release contains tables that reconcile non-GAAP financial measures to their corresponding GAAP-based measures. The release can be obtained by selecting the Investor Relations tab on the company's homepage and then the Press Releases tab. I will now turn the conference call over to Mr. Mininberg. Thank you, Jack. Good morning, and thanks to everyone for joining us. Today, I would like to provide you with an update on Project Pegasus, discuss our Q3 results, and the consumer and retail trends we saw during the quarter. As discussed in our October call, Pegasus is a comprehensive restructuring program launched this past summer with the goals of significantly strengthening and accelerating our platform for operating margin expansion, reducing inventory, improving ROIC, and improving cash flow. Pegasus is a multi-year initiative with a three-year arc designed not only to improve profitability, but also provide additional investment fuel to more efficiently leverage our proven value creation flywheel as we return to growth. Pegasus goes well beyond the typical belt-tightening exercise. With the macro environment not indicative of a rapid re-acceleration due to higher inflation, higher interest rates, uncertainty about the future financial health of consumers and foreign exchange headwinds, we used this summer to take a hard look at ourselves. We zeroed in on ways to accelerate efficiency projects already underway and identify a comprehensive set of new savings opportunities. The key initiatives in Pegasus include optimizing our brand portfolio, accelerating and amplifying cost of goods savings projects, enhancing the efficiency of our supply chain and distribution network, optimizing our indirect spending, streamlining and simplifying the organization, and reducing inventory. Pegasus also includes initiatives to return to operating margin expansion and improve our organic growth rates. Over the past few months, we have made significant progress. All work streams are underway, leaders and teams are in place, and they're focused on speed and on executional excellence. I have asked our Chief Operating Officer, Noel Geoffroy, to walk through that progress. Beyond Pegasus, Noel is also working closely with the business segments and operations, so she will also join Matt and I in the question and answer section on both Pegasus and the business segments. Thanks, Julien. Today, we are sharing details on the progress across several Pegasus initiatives, including streamlining and simplifying the organization, optimizing our brand portfolio, and further sharpening our investment choices. Specifically on the organization, we are announcing three major structural changes. The first is to consolidate from three business segments to two. The second is to create a North American Regional Market Organization that will be responsible for sales and go-to-market for the United States and Canada. The third is to further centralize our global shared services for operations and finance. Let's go through each of the three areas. Starting with the consolidation from three business segments to two, we are combining our current health and wellness and beauty segments into one and renaming it Beauty and Wellness. Our other business segment will continue to be Home and Outdoor. Both segments will be even more focused on delighting consumers with outstanding brands and products that people trust and adore. They will retain and use their deep understanding of the brands, consumers, and competitors in each category, focusing on developing even more outstanding consumer-centric innovations and marketing programs that will further differentiate our world-class brands. The second major organizational change is to create a North American Regional Market Organization. Very similar to the RMOs we already operate in EMEA, Latin America, and Asia Pacific, the new North American RMO will capture the benefits of increased focus on sales and go-to-market with further attention to shoppers in the United States and Canada. The North American RMO will also create new savings and new capabilities both externally and internally. Like our other RMOs, the North American RMO will be responsible for go-to-market activation on all brands and channels. We'll capitalize on the scale of Helen of Troy's diversified brand portfolio and leverage the strong strategic customer relationships we have worked so hard to build over many years. New savings will come from increased speed, eliminating duplication, streamlining interfaces with shared service functions, and standardizing processes. The North American RMO is being staffed with an emphasis on continuity of key sales leaders and maintaining the needed category and channel specialization in areas such as outdoors and prestige beauty, where there is less overlap. There will be no change to the international RMOs, and they will continue to be led by our president of international. The third change is to further centralize operations and finance. This is a continuation of the theme of shared service centralization we started in phase I for IT, legal, and HR. As always, our shared services are designed to support our business segments and RMOs with their expertise, gain speed and efficiency from applying best practices, eliminate duplication, standardize processes, streamline interfaces, and better leverage scale. We are further centralizing operations under our Chief of Global Operations, who will now own all sourcing and supplier relationships and will create a center of excellence on supply and demand planning to help improve forecast accuracy and inventory management. In finance, we are reconfiguring our finance leadership support to match our new organization structure, centralizing our global accounting function, and aligning reporting for the full global finance organization under our CFO, all at a reduced headcount versus today. The new structure will reduce the size of our global workforce with impact across all business segments, departments, and shared services. Our overall global workforce will shrink by approximately 10%. The majority of the role reductions will be completed by March 1st. The savings will largely be realized in fiscal 2024. Nearly all the rest will be completed before the end of fiscal 2024. We did not take this decision lightly. Our global leadership team has worked very carefully on the new organizational structure and on the specific staffing for each role. We all have immense respect and gratitude for the highly talented associates who will be leaving us. We have been careful to ensure continuity of leadership and expertise in the new organizational design. The two business segments, international and the new North American RMO, will each be led by proven current presidents who will continue to report to me. Nearly all shared service functions, including operations, finance, IT, legal, and corporate business development, will operate under the current proven leaders who serve with me on Julien's global leadership team. Turning now to our initiative to optimize our brand portfolio, we have three specific Pegasus work streams to highlight. They include sharpening our discretionary spending choices, SKU rationalization, and assessing which brands might be good candidates to exit. As always, our objective is a portfolio with faster growth than fleet average, better ROIs on our spend, and higher margins. While it is still too early to share our specific choices today, here is an update on each. The first action focuses on making more targeted investment choices, investing disproportionately in businesses that deliver superior value as differentiated market leaders with higher margins that have the most compelling growth adjacencies and that are the most asset efficient. Under Pegasus, we are creating more rigorous tools to better determine which brands, innovations, and channels will get the most focus and support, which ones to maintain as steady performers, and which ones will receive less focus. The second action is a Pegasus work stream focused on simplifying our SKU assortment by prioritizing better-selling items that have the highest growth potential and best margins. This includes eliminating hidden costs and long-tail complexity to improve the efficiency of assets such as inventory, distribution centers, new product development teams, and supply chain teams. We believe these first two actions will translate into more robust support for our highest potential brands and a more efficient product assortment for omni-channel distribution. The third action area is acquisition and divestiture. We have demonstrated our ability to use accretive acquisition to enter new growth areas where we can add value. We have also demonstrated our ability to divest good businesses that were no longer a long-term priority for Helen of Troy or shut down significant underperformers. We will update you with specific news as this evolves under Pegasus. Let me turn the call back to Julien to discuss the Q3 and the external trends we are seeing. Thanks, Noel. Our Q3 financial performance was better than the outlook we provided in October. The result was primarily due to higher sales from what has so far been an above average cold and flu season and some pull forward of sales from the Q4 into the Q3 of this fiscal year. On a fiscal year to date basis, core net sales are up 33% on a three-year stack versus the pre-COVID base of fiscal year 2020. Over those same nine months, core adjusted and diluted earnings per share is up 6.6% on a three-year stack despite the negative impact this fiscal year from inflation, higher interest rates, and lower operating leverage. During the Q3, consumers continued to tighten their purchasing patterns in some categories in response to high inflation and higher interest rates. As consumption slowed, some retailers continued their conservative repurchase patterns to further reduce their inventory. Our promotions across online and in-store channels were slightly elevated on certain parts of our business, such as beauty and health and wellness, helping to support the consumer trends we are seeing and helping our retail partners better reach their inventory reduction goals. The holiday season started off slower than expected, with discretionary categories generally under pressure from these trends. In some categories, performance improved in late December, ending largely in line with our expectations. Looking at our business segments, I'll start with health and wellness. As highlighted in the media, there has been a marked increase in the various viruses that cause the symptoms our products help relieve, such as fever, cough, runny noses, congestion, and sore throat. While it was still early in the season during our Q3, we are seeing elevated incidents of these conditions from cold, flu, and the latest Omicron COVID subvariants. Symptoms this year have further been raised by a surge of other respiratory infections in both children and and adults. The result has been strong sell-through of our thermometers, humidifiers, and inhalants under the Vicks and Braun brands. Since U.S. retailers generally had sufficient inventory on hand from last season, elevated incidents did not translate into year-over-year shipment growth during our Q3, but it did quickly reduce inventory for our major retailer customers and even led to out of stocks for some, especially in humidifiers. Internationally, we saw shipment growth, especially in thermometers. As we start the Q4, replenishment orders from retailers have been much stronger, especially on humidifiers, and we are forecasting strong shipments of our cold and cough-related products this quarter. The exact amount will depend on how long symptoms persist, how aggressively retailers replenish, and our ability to serve the increased demand. Turning to Home & Outdoor, total sales, including Osprey, declined 7% versus a very tough comparison to the prior year when the segment grew 10.7%. OXO continued to see POS below peak prior year levels at brick-and-mortar as the overall home category continued to slow. Importantly, total POS for OXO remained solidly ahead of pre-pandemic levels as we focused on our marketing to introduce the brand to new consumers. OXO performed very well at our largest online retailer during the Black Friday and Cyber Monday period. Hydro Flask continues to hold its number one position at our largest online retailer, where sales almost doubled during the Black Friday and Cyber Monday period compared to the same period last year. This helped to offset the broader POS decline at brick-and-mortar in the quarter. Turning to beauty, core segment sales declined 12.2% in the Q3. Primary driver was the overall Beauty appliance category decline from the high base of fiscal 2022 in both online and in U.S. mass merchandisers. It was partially offset by some pull forward of orders in the Q3 ahead of this year's holiday period. Even though consumers continued to trade down to lower price appliances, our market shares at the largest online retailer and at the brick-and-mortar retailers that make up the majority of our sales are now showing growth over the past 52 weeks. The Revlon One-Step Volumizer continues to be by far the number one selling item in the category, selling at twice the rate of the number two seller across nearly all retail customers. In prestige liquids, which are among our most profitable businesses, both Drybar and Curlsmith achieved solid performance. Turning to international, results were ahead of expectations with net sales up 15.3% and particular strength in EMEA and Asia. Contributions from the acquisitions of Osprey and Curlsmith were the main drivers. All three home and outdoor brands performed above expectations internationally, with Osprey doing very well in Europe. Braun outperformed as we were able to partially overcome supply shortages to help meet the increased thermometer demand in EMEA and in Asia. Regarding Pegasus, I would like to say that the workforce reduction we announced today is one of the hardest things I have done in my entire career. We have an exceptional team and a team that has delivered outstanding results over many years. My respect for the people who will be leaving us and the work that they have done is immense, as is my gratitude. Changes we are announcing today are the right ones. They are a natural evolution of the major themes we have been focused on from the start of our transformation. While change is never easy, I want to reiterate how encouraged I am about the progress on all of the Pegasus work streams. Helen of Troy has an outstanding track record of adapting to change and transforming itself with significant positive results. We have done it 3x in the recent past, as proven in phase I of our transformation, as demonstrated further in the first three years of phase II, both before and also during the pandemic, and in our Beauty segment under the Refuel initiative. Rather than grind through the present challenges, we greatly prefer to proactively shape our future through Pegasus and then build on it with phase III. With regard to timing, we see fiscal 2024 as a transition year. From a macro standpoint, we see a very challenging near-term economic backdrop. We are focused on Pegasus, on launching our pipeline of consumer-centric innovation, and on executing our commercial plans for fiscal 2024. The faster we secure our Pegasus efficiencies, the more that we can invest in accelerating revenue growth and building market share for our most promising brands. With the largest portion of Pegasus savings slated for realization in fiscal 2025, we expect to generate fuel to invest in the value creation flywheel further. As we execute the full suite of Pegasus initiatives over a three-year arc, I am confident we can return to growth on the top line, lower our input costs, expand operating margins, improve cash flow, and further reduce inventory. I look forward to sharing further progress on Pegasus as well as our fiscal 2024 outlook when we report our Q4 results on our normal timing in late April. With that, I'd like to hand the call over to Matt. Thank you, Julien. Good morning, everyone. I would like to begin with an overview of our Q3 results, then review our updated fiscal 2023 outlook, provide an update on Project Pegasus, and conclude with some high-level thoughts on fiscal 2024. Looking at the Q3, results were ahead of our expectations as we benefited from a more severe start to the cough, cold, and flu season, driving higher than expected sales in certain health-related categories, such as thermometry and humidification, as well as the benefit of the shift of approximately $10 million of sales that occurred in the Q3 that were forecasted to occur in the Q4 and lower interest expense. These factors were partially offset by a holiday selling season that did not start off as strong as expected as macroeconomic pressures continued to impact consumer purchasing behavior, a more unfavorable gross profit margin, particularly in Beauty and Health and Wellness, and a higher effective tax rate. Our consolidated net sales decreased 10.6% in the quarter as organic sales were impacted by lower consumer demand, unfavorable shifts in consumer spending patterns, and reduced orders from retail customers due to higher trade inventory levels. The net sales comparison was also unfavorably impacted by the pull forward of approximately $15 million into the Q3 of last year as retailers accelerated orders to try to avoid supply chain disruptions during the holiday season. The contributions of Osprey and Curlsmith partially offset the decline in organic sales. GAAP consolidated operating margin for the quarter was 13.8% of net sales. On an adjusted basis, operating margins declined by 0.4 percentage points to 16.6%, primarily driven by unfavorable operating leverage, the unfavorable impact of less Beauty segment sales within our consolidated net sales revenue, and a less favorable product mix within the Home & Outdoor segment due to the acquisition of Osprey. These items were partially offset by higher gross margin due to a more favorable customer mix within the Home & Outdoor segment and a more favorable product mix within the Beauty segment, primarily due to the acquisition of Curlsmith, as well as lower annual incentive compensation expense. Net income was $51.8 million or $2.15 per diluted share. Non-GAAP adjusted diluted EPS decreased 26.1% to $2.75, primarily due to lower adjusted operating income, higher interest expense, and an increase in the effective income tax rate, partially offset by lower weighted average diluted shares outstanding. We generated $125 million of operating cash flow in the Q3, primarily driven by a sequential decline in our inventory levels from the end of the Q2 of $106 million. We are now at lower inventory levels than the end of fiscal 2022, and we continue to expect a further decline in inventory in the Q4. Our new expectation is to reach approximately $500 million of inventory by the end of fiscal 2023. Even with this accelerated improvement in inventory levels versus our previous expectations, we continue to expect slightly negative free cash flow for the full fiscal year. We ended the quarter with total debt of $1.08 billion, a decrease of $89.3 million from the Q2, as we used our positive cash flow to pay down our debt. This brought our net leverage ratio down to 3.1x compared to 3.16x at the end of the Q2. We continue to expect our leverage ratio to decline in the Q4 and to end fiscal 2023 with a leverage ratio in the range of 2.75x-3.0x. Turning to our revised outlook for the current fiscal year. As outlined in our earnings release, we have raised the lower end of our full-year outlook for fiscal 2023 for both sales and adjusted diluted EPS while maintaining the top end of the ranges. Given the volatility and uncertainty we have experienced this year, coupled with the current trends in the market, we remain cautious in our outlook for the Q4. The consumer continues to feel the impact of inflation and, as we have seen during the holiday period, was seeking to buy discounted or promotional items. We are seeing positive signs that inventory at some key customers is beginning to rebalance, and we will continue to monitor closely as retailers finish their holiday season. Our revised outlook reflects several factors, including the timing shift of sales into the Q3 versus our previous expectation of those sales occurring in the Q4. Higher sales in our Beauty segment due to an improved outlook for Curlsmith and a less than expected category decline in hair appliances, and higher sales in our health and wellness segment due to a more severe start to the flu season. These factors are offset by lower than expected consumption trends in our Home & Outdoor segment and our assumption of lower customer replenishment orders impacting the Q4 following the slower start to the holiday season. Although we are seeing a more severe start to the flu season, it is unclear how the remainder of the season will progress. Additionally, due to our strategic initiative to decrease inventory levels and our previous expectation of a flu season in line with pre-COVID historical averages, we will be somewhat limited in our ability to supply at elevated demand levels in certain categories in the Q4. Our adjusted diluted EPS outlook is being impacted by our expectations for sales, a more unfavorable gross margin, particularly in Beauty and health and Wellness, higher marketing expense, lower interest expense, and a higher effective tax rate. For fiscal 2023, we now expect consolidated net sales revenue in the range of $2.025 billion-$2.05 billion, which implies a consolidated decline of 8.9%-7.8% and a core decline of 7.5%-6.4%. By segment, we now have the following net sales expectations. Home & Outdoor growth of 2.5%-3.5%, including net sales from Osprey of $180 million-$185 million. A health and wellness decline of 11%-10%, and a beauty core business decline of 18.5%-17.5%, including net sales from Curlsmith of $35 million-$40 million for the 10-month period of ownership in fiscal 2023. As a reminder, the Q4 of last year included accelerated sales from certain retailers securing additional supply ahead of expected price increases. The favorable sales impact of health-related products from the initial Omicron wave and approximately two months of sales from the Osprey acquisition. Despite the macroeconomic challenges we have faced this year, we are particularly pleased to see Osprey continue to hold the sales outlook we provided at the beginning of the year and to be able to increase our sales outlook for Curlsmith. We now expect consolidated GAAP diluted EPS of $4.82-$5.11, and consolidated non-GAAP adjusted diluted EPS in the range of $9.20-$9.40, which implies a consolidated decline of 25.6%-23.9% and a core decline of 24.5%-22.8%. This includes an adjusted diluted EPS contribution from Osprey of approximately $0.35-$0.40 and a pro rata fiscal 2023 contribution from Curlsmith of approximately $0.20-$0.25. We continue to expect to slightly expand gross margin in fiscal 2023, and consolidated adjusted operating margin is now expected to decline approximately 100- 120 basis points, with roughly the same year-over-year decline in each of our segments. The consolidated adjusted operating margin decline is expected to be driven primarily by unfavorable operating leverage, the net dilutive effect of inflationary and price increases, the dilutive impact of the Osprey acquisition in the Home & Outdoor segment, and an unfavorable product mix in the Beauty & Wellness segment. Our outlook for the estimated after-tax impact of incremental inflationary costs declined slightly to approximately $50 million-$55 million, or approximately $2.10-$2.25 of adjusted diluted EPS. Our outlook for interest expense declined to approximately $42 million-$43 million. While we still expect the Fed to increase interest rates by 450 basis points in calendar year 2022, we benefited from previous assumptions on the pace of rate increases, our ability to pay down debt, and the forecasted amount of capitalized interest related to the construction of our new distribution center. During the quarter, we made good progress on our Project Pegasus initiatives as we reduced inventory levels, improved cash flow, and advanced many other work streams that we believe will create future operating efficiencies, expand our margins, and provide a platform to fund future growth investments. We believe we are on track to achieve the total savings and timing objectives that we introduced in our Q2 call and that we reiterated in today's earnings release. As Noel discussed in her remarks, changes to the structure of the organization in connection with Project Pegasus will include the beauty and health and wellness operating segments being combined into a single reportable segment, which will be referred to as Beauty & Wellness. Beginning with our fiscal 2023 Form 10-K, our future disclosures will reflect the two reportable segments, Home & Outdoor and Beauty & Wellness, with historical period segment information recast to be on the same basis. When we issue our Q4 earnings release, we will provide two years of historical quarterly segment data on a comparable basis. Looking ahead to fiscal 2024, there remains considerable uncertainty in the near term macroeconomic and consumer outlooks. We expect that many of the same macroeconomic factors that made calendar 2022 so challenging may persist into calendar 2023, as well as the compounding effect of the uncertainty of a potential recession and whether or not the Fed can execute a soft landing. These factors continue to make the ability to forecast consumer behavior patterns difficult. We believe that fiscal 2024 sales growth will be challenged and highly dependent on the health of the consumer, that the variability of these factors could drive a wide range of potential outcomes, which would be impacted by the depth and length of any potential recession. As previously discussed, we also expect to face a number of cost headwinds in fiscal 2024, which include higher interest expense as we annualize the increase in interest rates in fiscal 2023, incremental depreciation related to our new $225 million distribution center, which we expect to put in service at the beginning of fiscal 2024, and higher annual incentive compensation expense as we reinstate expense associated with our estimates to achieve fiscal 2024 compensation targets. We do expect fiscal 2024 tailwinds from healthier retailer inventories and more aligned sell-in and sell-through sales patterns, savings from Project Pegasus initiatives, and lower ocean freight and product costs. The benefit from freight and product costs are generally expected to be realized in the second half of our fiscal year as we move through the cycle of purchasing new inventory and turning it through cost of goods sold. While our fiscal 2024 may be a transition year as we see macroeconomic rebalancing and navigate some cost headwinds, I am confident that the strength of our brands, efforts of our associates, strategic growth investments, and the initiatives we are executing under Project Pegasus will help position us to return to sustained long-term growth as we look to fiscal 2025 and beyond. With that, I would like to turn it back to the operator for questions. Thank you. If you would like to ask a question, please press star one on your telephone key. Confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit to one question and then re-queue for additional questions. Our first question is from Rupesh Parikh with Oppenheimer. Please proceed. Good morning. Thanks for taking my question. I guess I'll just start with the Hydro Flask brand. Just curious what's driving the disconnect between what you guys are seeing online versus some of the weakness you're seeing at brick-and-mortar. As you look at Hydro Flask, is that gain or losing share at this point from your perspective? Yeah. Hi, Rupesh. Nice to talk to you and glad for everyone that we're out of our quiet period and able to speak openly. Noel, could you fill in on this topic? Sure. Hi, Rupesh. Thanks for joining us today. You know, when we look at Hydro Flask, we do see channel shifts, and you touched on that in your question. We see a lot more sales transitioning to online, where we are performing very strongly as Julien outlined in the script, leading share brand in the leading online retailer. You know, I think that's a function of shoppers just shifting more and more to online, especially for items like this, like Hydro Flask. As we look at Hydro Flask over a two-year stack, we do see the brand growing and strong. We still are very excited about Hydro Flask and the performance. Yeah. My only build there. No. Thanks, Noel. My only build there is that on a share basis, if you looked at the last three or four years in total, Hydro Flask is roughly flat on a call it four years ago basis. There's been some ups and downs along the way. In the case of the channel shift, my only build on that particular topic is that we've been active in the area. We disclosed, I think a quarter or two ago that we went from a third party manager of our online sales at the biggest online retailer to first party, and that made a big difference for us. DTC in general is a big investment area for us. We've been very clear that we have major initiatives in that area, and we're very pleased actually with the progress. It did not change the online retailer results during the quarter, but it is influencing our DTC. We mentioned that DTC did extremely well during the Turkey Five Cyber Monday period in our prepared remarks, and we have much more to come on the subject of DTC on very short timing for Hydro Flask and other brands. Great. Thank you. Our next question is from Bob Labick with CJS Securities. Please proceed. Good morning and Happy New Year. Yeah. Hey, Bob. Happy New Year to you too. Thank you. Just wanna follow up on some of your comments, you know, as it relates to the outlook. Obviously, you guys said, and we've heard from many companies that visibility into calendar 2023 is kinda lower than normal due to the inventory corrections at retail and also the potential recession next year. The question is. What changes operationally in a low visibility environment for you? What do you do differently in that, if anything? How, you know, can this impact the year overall? What are the kind of issues that it could impact the year as a result? Yeah. Let me just say a little, and then I'll tip it to Matt and Noel because I think they can help on this one. First, just a general comment, this is for everybody. We're at that funny time of year, when I think everyone is extremely interested in calendar 2023 or our fiscal 2024, which starts on March 1st. Yet our normal cycle is to go through the rest of our budget process, prepare the last of our year and then disclose in April. We won't be in a position to put specificity. I know that people were asking even as recently as long ago as October, and we were laughing a bit saying, "Well, I guess people knew about 18 months from now." I know you're not asking for that kind of specificity. You're asking at the macro level of what you do in a lower visibility environment. Going to that question, the key answer for me is about focusing on the controllables. We mentioned the specific ones in the prepared remarks. The first is Pegasus, of course, and we talked quite a lot about that. That's the source of fuel. It's also the source of additional efficiencies, and it will help us in all the ways talked. The second big controllable is our significant pipeline. We're a winner on innovation. Our products are winning awards all over the place. Noel might be able to speak to a little of this. We have some market share wins, actually a few market share losses. In general, consumers not only prefer our products, but flat buy them. The result is that we are continuing to focus on innovation and we're investing in innovation, and that's a controllable for us. We love consumers, we love delighting consumers, and kicking a butt in the marketplace on that topic is a control. In the third controller is just commercial plans, and Noel can speak to a little bit about some of them. The idea is to focus on controllables. As far as inventory, we can control what we buy. What retailers choose to buy, but we do work very closely with them on helping to manage their inventory. You heard us say in the prepared remarks that in this environment, we're extremely focused on making sure that retailer inventory is healthy. We're helping where we can. We're being careful with consumers to be sharp on price, and we are bringing our own inventory down in a big way. That's a whole another controllable for us. The last is around cost and footprint kind of things where we've been pretty aggressive. On the marketplace, we've not given up. We believe in the economy, we believe in the consumer, and we believe in the long-term health of people's interest in improving their lives. We're making that bet. There's just a choppy period ahead where we don't have that kind of visibility, and it does create a fairly broad set of potential outcomes. For Matt or Noel, I don't know if there's any further specificity that we might wanna put there, but the key message is controllables. Yeah. Good morning, everybody, and Happy New Year. This is Matt. Bob, the only thing I would add to what Julien said is, you know, he talked about focusing on our controllables and, you know, what do we do differently. I think Pegasus is part of that too, right? I mean, so we've already put Pegasus in place, and I think that will help generate some things that'll give us some headwinds for next year. The other is, you know, I think you can just take a general planning approach as you go in, which we've done before in similar years where there is some more uncertainty, where you take a little bit more of a conservative spending approach, cash management approach, and then what I call spend into success, right? As you see the sales develop, maybe, you know, more positively than you would have gone in, you are ready with plans to start spending into the success. I think as we look at our budgeting approach for fiscal 2024, that's kind of the mentality we're taking is plan for, you know, maybe a more conservative approach, but then be ready with alternative plans as we see success to be more aggressive and capitalize on it. Yeah. The only other build I have to what Julien added is just, and it builds on what Matt said, is prioritizing where we do spend as we do that. Really, using the budget season that we've got upon us to think about which of those brands that we think have the best growth potential, the best profitability, the best momentum in the marketplace, and leaning in there, and then, you know, kind of treating some of the other brands as more, you know, steady strongholds that maintain their position. That allows us to make sure we get the very most and the best out of the best parts of our portfolio. As Julien said, you know, we do continue to innovate. We've got some great innovations. We've earned a lot of awards, not only on design, but also from some of the preeminent women's magazines on many of our products. We know that our consumer-centric innovation continues to resonate. Commercially, we also continue to do very close joint business planning with our major customers, making sure that our distribution and assortment is appropriate for kind of this given time horizon where, you know, where the economic uncertainty is there for consumers. It's one of the magics of Helen of Troy's diversified portfolio. We have things that cover a broad range of price points to enable us to do that. Yeah. By the way, on that awards thing, people might think, oh, we might be talking more about all those volumizer awards or the traditional industrial design awards that OXO would win. There was a pretty healthy slate in health and wellness quite recently, and some pretty major international ones. And even in beauty, by the way, and not in the volumizer area, the dual plate straightener, the one that has the four plates, looks like a tuning fork. You've seen it from us before, on Hot Tools, where we extended it from the original Revlon, just won a Cosmopolitan Holy Grail Award for 2022, like a week or two ago. Got it. Okay. Thank you. Our next question is from Olivia Tong with Raymond James. Please proceed. Great. Thanks. Good morning, everybody. My first question is first a clarification on the consolidation of beauty and health and wellness divisions into one, because it sounds like it's both the cost savings maneuver to reduce head count, but also you're expecting it to help with brand development, innovation, focus on marketing, at least that's what it does in the press release. I'm trying to understand, you know, the savings component is fairly straightforward, but can you talk about how you expect that consolidation to help you drive innovation and presumably faster sales growth over time to start. Thanks. Yes. Hey, Olivia. Good to talk with you again. We do, you know, the cost savings aspect of it is obvious, but we do see significant additional synergy by combining beauty and health and wellness. You know, the two business units have the largest overlap of core customers. Of course, you've got Drybar and Curlsmith that are more prestige beauty. But when you think about mass merchandisers, food, drug, mass, et cetera, there's a lot of overlap there. Good synergy there as we get our North American RMO up and running. Many different synergies in the cost area. Some third-party manufacturers, a lot of common plastics and resins. When you think about some of the cost of goods work streams that we have, on that side of things, we see a lot of synergies there, plastic and resins, as well as common motors and blowers, those sorts of things. There's really a lot of areas. It may not be obvious on the surface, but when you really dig down into it, there's a lot. You know, the other place is just when you have fewer business units, not only do you need less overhead or less people, as you talked about, but just the streamlined interfaces. You know, as we get our shared services even more centralized, interfacing with two business units versus three is more efficient. Our processes, you know, can be more standard and be more efficient. Those would be some of the areas that we see as beneficial as we kind of come together as a new Beauty & Wellness business unit. Got it. That's helpful. My second question's on inventory and consumer demand. You know, can you talk about where you stand on retailer inventory within key categories, you know, particularly those that benefited from outside demand, obviously in the last two, three years, and kind of your view on when sell and sell through more or less converge. The other side is then on your own inventory, you know, getting to $500 million, great progress over this year, of course. What's the end goal? Because even if we adjust upwards for acquisitions, inflation, et cetera, inventory is still a fair bit higher than pre-pandemic levels. What's the end goal? Maybe a little bit of color on that after that $500 million. Thanks so much. Yeah. Matt, could you start us off on this one, please? Good morning, Olivia. Good questions. Obviously, we're very pleased with the amount of progress we've been able to make in the quarter to bring down our inventory levels and, you know, get to $500 million this year. To your point, you know, I think there is some adjustment for some of the acquisitions that we've done. As I look forward, I think a good measure for us we're gonna be looking at is turns. You know, inventory levels are the leading indicator, and then turns is the lagging indicator just 'cause of the look back and how you calculate it. You know, we work a lot closer to three turns in the past, and we've drifted down to the low, you know, two at this point in time. We really wanna get back to the 3 turns level. I don't know if we'll get there next year because of the lag impact of it and what happens with the macroeconomic environment. I think, you know, as we look forward, we definitely wanna get to three and then above three on a more long-term basis. I think that'll be really efficient. Our new distribution center, the consolidation of our distribution footprint will be a lot of things that can help us be more efficient in inventory. I think that that will help us get to that turns level. I, you know, I definitely think, you know, we wanna get down much more below $500 million just from an inventory level perspective. We'll have to look at what that means by the end of next year. I'd say overall, focus on turns and, you know, we'll need a little bit more time to get to that 3 times turn and then beyond. For us, I think there's a lot of good tailwinds for us that are gonna help us get there over time. One example on that one is, remember, we've spoken a lot about balancing between China sourcing and rest of world sourcing, including in the Americas and especially Mexico, which leads to nearshoring for the U.S. and Canadian market and even the Latin American markets. That nearshoring has the obvious benefit of shorter lead times. Shorter lead times by definition mean less inventory, and it also less exposure to the sea freight market. Lots of reasons why those initiatives, which are much bigger than just the speed of turn. So sorry, than the sourcing or the comments that Matt is making, will help us bring the speed of turns up. On the retailer inventories. Sorry, I want to say one other thing about this, about our ours, which is you heard us talk about SKU rationalization in Pegasus, and Noel might mention this because that's gonna help us on the topic of not just how much inventory we carry, but how quickly it turns. On the retailer inventory, Noel, I don't know if you might speak to that and also any other builds on how our inventory will continue to come down. Yeah, sure. you know, starting with our inventory, as Julien mentioned, SKU rationalization, in a really robust, comprehensive way through Pegasus will help us, I think, on inventory. You know, as you start to simplify your line up, and really look to focus on your most productive items, both from a consumer and a retailer perspective, and cut out some of that long tail complexity, that's gonna help us from an inventory management standpoint and from a forecasting standpoint, which also then helps Inventory. From a retailer inventory standpoint, you know what I would say, Olivia, is, it does still vary category by category and retailer by retailer, as you might expect. We have a diverse portfolio. We play across a lot of retailers. We are clearly in a better place now than what we were in last quarter and the quarter before that. We do continue to see some retailers in certain categories ordering less than consumption, suggesting that we do still have some pockets of higher inventory in retail than we might like. We, you know, we continue to partner closely with our retailers on the right commercial programming to move through that. We are pleased to see those, you know, the kind of sell-in and sell out kind of get closer to one another as we progress through the year. That's kind of where we stand there. One quick thought before we move from this one, Olivia, is things change quickly. What I mean by that is we just saw it in the cold and flu numbers. Yet I think people are used to, whether it's because of the consumer buying pattern shift from the pandemic or the retailers having swollen inventories in the last six to nine months, people are used to this narrative, that the inventory needs to turn slowly and the consumer is down for the count. Things turn quickly. Just now, when people have a need, like in the cold and flu, we're in a situation where we literally just can't ship enough humidifiers right this minute. In the case of thermometers, everyone knows what it was like during the pandemic, air purifiers a little bit later in the pandemic. Things change quickly. Our products are diversified, so when needs come, we do have what people want, whether it's in a health-related category or home-related category, an outdoor-related category. When the need is there and consumers go for it, not only do they prefer our products, but things change quickly for us. Got it. Thanks for all the detail. See you next week. You bet. Looking forward to that. Our next question is from Linda Bolton-Weiser with D.A. Davidson. Please proceed. Hi. Thank you. Hi, Linda. Hi. Hi. Happy New Year. Yeah, you too. I just had a question kind of about maybe the bigger picture, longer term thing here. When you look at your operating margin for this year, I don't know, I guess I haven't updated it here, but it's around 15% or so, give or take. That's actually not down a ton from your high, you know, from your peak margins. You've achieved really good margins, you know, through all your hard work. I guess as mostly a durable goods company with, like, a 15%-ish operating margin, I guess the question I get a lot from people is, like, well, what's the potential long term? I mean, one would argue that that's already high. I'm just curious if this Pegasus restructuring, is it kind of like to stem further decline, or is it actually to drive that margin to even newer, new highs? I guess I just want to understand kind of what your thoughts are there. Yeah. First the former, then the latter. Noel, please put some color on, the margin, trajectory for Pegasus. Yeah, I think, you know, again, we've talked about various different work streams in Pegasus, and many of them do look at improving our margins. I just talked about SKU rationalization in the prior question, and that's a good example of it. You know, when you do that kind of work, you're really looking SKU by SKU and looking for those opportunities to prune any items that maybe aren't as productive and aren't as profitable and the margins aren't as good. That starts to help from a margin standpoint. We're looking at all the different cost of goods savings projects. There's many different aspects of Pegasus that will help. When we think about it, we also want to reinvest with Pegasus. I would say we certainly don't look at Pegasus to only improve our operating margin over time. We're looking, you know, as we generate the savings to be able to reinvest back in the business and drive growth for us in the future. That's a big part of it. The faster we can get some of these projects going and turning through cost of business inventory, as Matt mentioned, the faster we'll be able to reinvest back in the business. Matt, if you wanna build. Yeah. The only build I would have, Linda, you know, I think you kind of got the margin outcome this year. We guided today in my comments to, you know, down 100-120 basis points. To your point, within that, us getting to that approximately 15%, like you said, there's a lot of deleveraging. I mean, with the amount of sales decline that we had, there's a lot of deleveraging in that number. If you just, let's say, snap your fingers and take out the deleveraging impact, and you get to some growth next year, and you get a little even, you know, God forbid, a little favorable leverage, you know, that's a building block. What Noel was saying on Pegasus is there's an opportunity at Pegasus to create margin improvement, and that could be dropping some of the cost savings. It could be lower product costs. It could be making space to reinvest and drive leadership brand growth, which are gonna drive better mix. I mean, think about, we've had a huge favorable impact this year from Curlsmith. Although it's not, you know, the biggest brand we have, it really punches above its weight in terms of mix. Being able to invest in those brands that we've purchased over the past couple of years are gonna drive higher mix. I think there's a lot of tailwinds when you look at our operating margin trajectory. Of course, we'll have to fight cost headwinds like everybody else, and we've got some big ones next year. I think if you look in the longer term, I think there's still a lot of tailwinds on, you know, our ability to continue to expand margins. Yeah, I couldn't agree more. Linda, I'm so glad you asked this question. For your question and for all frankly on this call, there's a message from us, and the message from us is that the best is yet to come over time on margin from Helen of Troy. In the short term, there's pressure. You just heard it described, the minus 100 points. I think everyone on the call knows that Helen of Troy is up several hundred points on margin over the course of the transformation years. To lose 100 or even 120 basis points during this fiscal year is extremely painful, and we've certainly taken our beating on that topic. For the short-term folks, they're right that that's painful. For the long-term picture, not just Pegasus, but also the phase III plan which will follow it, the intention is to not only return to the margin peak that we saw last year, which was in, I think, the 16% range for adjusted operating margin, but to surpass it. We're not making particular phase III promises. We're not putting a specific long-term goal out today, but there's a message, and the message is, we've made several hundred basis points of progress. We've lost about 100 of them. We not only intend with Pegasus to quickly try to earn it back, but to surpass it in phase three using the fuel from Pegasus to reinvest in the flywheel. Okay. Thank you. That's very helpful. Can I just ask about in the health and wellness, we all know the whole story in the past about the EPA relabeling issue, et cetera, et cetera, and you had lost some sales from that. It actually looks in the IRI data like you're actually gaining back a lot of share. Is that the case, and are you kind of catching up and now that you're able to reship, are you actually gaining a lot of share as well as the cough, cold, flu season helping? I mean, is that kind of what I'm seeing going on there? Yeah, Linda, as we, as we touched on in the prepared remarks and, you know, you see it all over the news, this is a particularly high illness season. The products that we have, in many cases really help with those symptoms. Vicks humidifiers, for example, is one where, you know, Julien just said it, we obviously they're selling very well. Our share is very robust there. We look very positive in that regard, and frankly, we don't have necessarily enough to meet all of the elevated demand from a supply standpoint. Thermometers is another place. There's, you know, there's a lot of ups and downs in thermometers, since we've kind of come out of COVID, and we've had various different participants come in, but that's another place where we see strength. We do see strength in a few of our share positions in health and wellness in this recent time period. We were also down pretty hard in air purifiers because of the EPA matter. Yes, it's true that we've bounced back in part. It's quite competitive these days. There is a lot of inventory out there. There's more promotion than I think anybody would like. But in that battle to see our share improve and hold our own, that's good news. But the idea that we're back to pre EPA positions, that would not be the case in market share for air purifiers. Our next question is from Susan Anderson with Canaccord. Please proceed. Hi. Good morning. Thanks for taking my question. Nice to see the improved inventory position. I'm curious just on the M&A environment, just kinda what you're seeing out there, potential acquisitions starting to become more attractive from a valuation perspective. Also, if you could give us an update just on your thoughts on leverage. It sounds like you still expect to be to 2.75x-3x at the end of the year. I'm curious how you're thinking about if there's any early thoughts of next year, if you're happy with that level. Also any other thoughts on just the floating rate debt and maybe moving that to more of a fixed rate. Thanks. Hi, first of all, Susan, welcome. We're very pleased that you initiated coverage, and I believe this is the first call since you did, so we're out of our quiet period. Very nice to meet you. We're looking forward to meeting you in person, next week. Same here. This is great news. Yeah, pleasure. Yeah, thanks. I think, let me say just a little and then for Jack on the subject of M&A and Matt on the topic of debt levels. Our general goal is as we've been talking quite a lot in the last few months, is to improve our cash flow, reduce our inventory, bring down our debt, and invest in the most important initiatives. That's where our money has been going, and it's been our strategy for a while now. In the case of the progress, you heard it reported today, and thanks for your comment. We did make progress on inventory. We made progress on debt, a little bit actually, not much. On the subject of cash flow, also progress despite the investments in the big, new distribution center. With regard to M&A and debt levels, maybe for Jack first and then for Matt. Sure. Hi, Susan. On the M&A side, we are actively looking at a number of different projects. What I can tell you is that we're not really seeing the types of assets that we would like that will fit our criteria. We're rather picky with selecting and bringing new assets in. They need to sweeten our mix, and we also look to ones that we can make better but also can help make us better. At this point in time, we're continuing to look, but we're not seeing anything that is getting us to lean in, at least at this point in time. Hopefully, there will be something in the near future, and when we do, we'll have something to share about it. By the way, valuations to your comment, they are coming down, right? The money's not as cheap. Mm. There is a different marketplace that many people are selling into. We're keenly aware of that. You were not following us at the time, but you probably saw our comments when we bought Curlsmith. We bought a extremely strong prestige name with a significant position in its unique space of textured hair for roughly 10x, and that's unheard of in the prestige space. We took advantage of that opportunity. It's been good for us, as you've heard us say. As we see others that have the right mix of better together, as Jack always says, and the sweet spot on valuation, and then put that together with the cash flow and debt story, not only why not, but that's our entire track record as a company. We've doubled this company in the last 10 years in terms of sales. A portion of that came from acquisition. Many of those were outstandingly good financial deals. Hey, Susan, this is Matt. I'll just add on to the leverage component of it. You know, obviously, if you look back at our history, the amount of cash flow we'll generate this year, free cash flow is much lower than we've done in the past. If you look into next year, you know, I think we've got tailwinds for being able to continue to reduce our inventory levels, as well as, you know, we're not gonna spend $150 million of CapEx on our new distribution center we're gonna spend this year. Just take those two things and put them together and, you know, that's a big tailwind for us from a cash flow perspective. We expect to be able to continue to bring down our leverage. One thing for us, is we typically generate more of our cash flow in the Q3 and Q4 than the first and Q2. As we kinda look at our general cash flow cadence, I'd expect more of the reduction in our leverage to occur in the H2 of the year than the H1 of the year. Our final question is from Anthony Lebiedzinski with Sidoti & Company. Please proceed. Yes, good morning. Thank you for taking the questions. Happy New Year to all. Yeah. Hi You know, first, you know, given, you know, the, some of the trade down comments that Julien, that you said, and, as well as, you know, the current state of the economy, does that make you guys maybe rethink your product strategy, or do you think just the low-end type of products are just too commoditized? Would love to get your thoughts on that. Yeah. There's a sweet spot, Anthony, and hi, and happy New Year to you too. There's a sweet spot where the products can differentiate the brands and justify their excellence, their pricing, and delight the consumers. They're below that sweet spot, the commoditization comment starts to kick in, and that world of opening price point, much like the world of private label products, it's fully undifferentiated, and that's not a place where brands distinguish themselves. It's not a place where innovation is rewarded. It's a place where people who just want to spend less money will buy. I would say this too shall pass, but I think that's a bit too dismissive. There's simply a shift for a short time, and this happens when there are economic cycles like this. What we've done about it, as we talked in the last call, is to make sure, especially in beauty appliances, that we have some lower priced products in the mix. While that's not as good for margins, it does help on this topic. We also spoke about our in the world of good, better, best, our better thermometers like the Vicks stick type of thermometers, which picked up share when we last reported it, which I believe was last quarter, helped during the trade down area. You can see us navigating in this area. It's diversification not just in category, but in the world of good, better, best, but not all the way down to the commoditized opening price point. All that said, Noel, if you might comment, just 'cause we have, like, a moment left before the call will break, the thoughts in the hair appliance category, especially at large mass merchandisers, where there's an opportunity to improve the mix a bit in the direction Anthony's talking about. As mentioned, you know, that was a place to really make sure that our assortment was as robust as possible to cover the good, better, best range that Julien just referred to. We've done that in mass in particular, the channel, you know, where that consumer and that shopper tends to shop. We have rounded out our assortment in that regard, and that helped us in this quarter, and that's part of what helped our share in the beauty appliance category. We, you know, look to continue to do that as appropriate during this time when we need to meet that full broad range of consumer and shopper needs. Yeah. We'll see some improvements in that area in upcoming distribution, planogram as our expectation as well. It just helps balance it all. If you have the question of, are we strategically gonna shift, go down market, and become commoditized and then duke it out on price where people sell their mother for a nickel, the answer is no. This will conclude our question and answer session. I would like to turn the conference back over to management for closing comments. Yeah. Well, I know we've run just a minute or two long, I'll be very brief. First of all, just a thanks to everybody. It's a new year. There's a lot going on. We're grateful for people to continue to follow and take interest in where we're going. We're at a very special point in our career. You see Sorry, in our trajectory. You hear all the things that we said today, so you know what I'm talking about. We look very much forward to seeing quite a few of you actually in person next week, then virtually over the next week or two in the upcoming conferences. I know we have a number of other meetings scheduled with you. Looking forward to it and with the analysts as well. It's an exciting time for us, and we're very happy to communicate. Thanks very much and appreciate you joining today. Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation. Great. Thank you, operator. Bye-bye. Thank you.