Helen of Troy Limited (HELE) Earnings Call Transcript & Summary

Welcome to the Helen of Troy Limited Annual General Meeting of Shareholders. I would like to turn the conference over to Timothy Meeker, Chairman of the Helen of Troy Limited Board of Directors. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining us. I hope that you're all safe and healthy. Our thoughts continue to be with everyone who has been directly affected by the COVID-19 pandemic, including first responders, medical providers and essential workers who are on the front lines. At this time, I hereby call to order the Annual General Meeting of Shareholders of Helen of Troy Limited. I am Tim Meeker, Chairman of the Board, and I will act as Chairman of this meeting. For the first time in the company's history, we are conducting our Annual General Meeting virtually. By doing so, all our shareholders around the world are able to participate in the meeting from the safety of their own homes. During the meeting, shareholders will be able to submit questions and vote shares online. Please refer to the rules of conduct provided on the meeting site for additional information regarding these matters. Before turning the meeting over to our Chief Executive Officer, Julien Mininberg, I would like to introduce the other Director nominees that are in attendance at this virtual meeting: Mr. Mininberg, Gary B. Abromovitz, Darren G. Woody, Beryl B. Raff, Thurman K. Case, Krista Berry; and Vincent D. Carson. I would also like to acknowledge that we have several officers and employees of Helen of Troy joining us today as well as representatives from our registered public accounting firm, Grant Thornton. Now on to the order of business. And at this point, I would like to ask Mr. Mininberg to lead us through the items before the Annual General Meeting. Julien?

Good afternoon, and thank you, Tim. I would also like to welcome you to our first virtual Annual General Meeting. And I certainly echo Mr. Meeker's comments regarding your health and safety during the pandemic. On behalf of all at Helen of Troy, I would also like to thank our highly dedicated employees, including our own frontline essential workers, who all together have been working tirelessly to help guide the company through the countless challenges from COVID-19. The record date for this annual meeting is June 4 -- June 24, 2020. A complete list of shareholders of the company entitled to vote at this annual meeting as of the close of business on June 24, 2020, was prepared and certified by the company's transfer agent, Computershare Investor Services, and has been kept on file at the principal office of the company for a period of at least 10 days open to examination by any shareholder at any time during usual business hours. This list shows that 25,322,942 common shares of the company are issued and outstanding and entitled to vote at this meeting. Each person who has been duly authorized to act as a proxy for absent shareholders and each shareholder present who intends to vote should have received a ballot. Please remember, if you previously voted by proxy and do not wish to change your vote, your vote has been or will be cast as you're previously instructed and no further action is needed. If you are a record holder and wish to change your vote or if you did not send in a proxy and wish to cast your vote now or if you have not already cast your vote using our electronic voting system, you may cast your vote by clicking on the Vote Here button on the meeting site. Polls have been open for voting since the beginning of this meeting and will remain open until I announce their closure. I would also like to note that a copy of the notice of Annual General Meeting dated July 15, 2020, the proxy statement and the rules of conduct, each prepared in connection with this meeting, are available under the Meeting Materials section on the lower right-hand side of the meeting page. The Board of Directors has appointed one voting official to assist with the voting at this meeting. Andre Miranda, Vice President of Finance Operations, will act as voting official. All questions respecting the conduct of voting, qualifications of voters and acceptance or rejection of votes will be decided by the voting official. When the voting is completed, the voting official will also count the votes and will declare the results of the vote. Will the voting official present the attendance report?

As the voting official, I report that there are present at this meeting in person or by duly authorized proxy the holders of at least a majority of the common shares of the company issued and outstanding and entitled to vote.

Thank you. On the basis of such report, I declare that a quorum is present and that the meeting is now open for business. The proposals to be voted on at this meeting are described in our proxy statement made available to all shareholders. Each proposal will be voted on separately. First scheduled item of business to be conducted at this meeting is to elect the 8 directors nominated by the Nominating Committee of the Board of Directors. Under Bermuda law, election of each director requires the affirmative vote of the majority of the votes cast at the meeting that are entitled to vote on such proposal. The following individuals have been nominated for election as directors: Timothy F. Meeker, Julien R. Mininberg, Gary B. Abromovitz, Darren G. Woody, Beryl B. Raff, Thurman K. Case, Krista Berry and Vincent D. Carson. Their backgrounds and qualifications are stated in the proxy statement. I would now like to call the vote on Proposal 1. If you have already voted and do not wish to change your vote, no further action is necessary. If you intend to change your vote or if you intend to vote now and have met all the requirements specified in the proxy statement regarding voting at this meeting, please click on the Vote Here button located on the meeting site to vote or recast your vote. The next scheduled item of business to be conducted at this meeting is the proposal to approve the following advisory resolution on executive compensation. Resolved that the shareholders of Helen of Troy Limited approve on an advisory basis that at the compensation of the company's named executive officers disclosed in the compensation discussion and analysis, Summary Compensation Table and the related compensation tables, notes and narratives in the proxy statement for the company's 2020 Annual General Meeting of Shareholders. Under Bermuda law, approval of such proposal requires the affirmative vote of the majority of shareholders cast at the meeting that are entitled to vote on such proposal. I would now like to call the vote on Proposal 2. If you intend to change your vote or if you intend to vote now and have met all the requirements specified in the proxy statement regarding voting at the meeting, please click on the Vote Here button located on the meeting site to vote or recast your vote. The last scheduled item of business to be conducted at this meeting is the proposal to appoint Grant Thornton LLP as auditor and independent registered public accounting firm of the company to serve for the 2021 fiscal year and to authorize the Audit Committee of the Board of Directors to set the auditor's remuneration. Under Bermuda law, approval of such appointment and authorization requires the affirmative vote that the majority of voters cast at the meeting that are entitled to vote on such proposal. I would now like to call the vote on Proposal 3. If you intend to change your vote or if you intend to vote now and have met all the requirements specified in the proxy statement regarding voting at the meeting, please click on the Vote Here button located on the meeting side to vote or recast your vote. That concludes the voting at today's annual meeting, and the polls for each matter to be voted on at this annual meeting are now closed. The voting official will now announce the preliminary results.

Thank you. Having canvassed the vote and having ascertained the preliminary results of voting for these proposals, I find preliminarily as follows: On Proposal 1, the majority of the votes cast at the meeting that are entitled to vote on this proposal voted for the election of each of the 8 director nominees to serve until the 2021 Annual Meeting or until their successors are duly elected and qualified. On Proposal 2, the majority of the votes cast at the meeting that are entitled to vote on this proposal have, on an advisory basis, voted to approve the compensation of the company's named executive officers. And on Proposal 3, the majority of the votes cast at the meeting that are entitled to vote on this proposal voted for the appointment of Grant Thornton LLP as auditor and independent registered public accounting firm of the company to serve for the 2021 fiscal year and the authorization of the Audit Committee of the Board of Directors to set the auditor's remuneration.

Thank you. These are preliminary results of voting. The final results will be disclosed in a Form 8-K that will be filed with the Securities and Exchange Commission within the required time line. This completes the items of business to be considered at this meeting. With no other business to be properly brought before this meeting, I respectfully request that, Mr. Meeker, please take us to adjournment.

Thank you for your attendance today and your interest in the company's affairs. We look forward to your participation at next year's meeting. The formal portion of the meeting is closed. I now turn it back over to Mr. Mininberg for his presentation about the company and the Q&A session.

Thank you, Mr. Meeker. Well, without further ado, it would be my absolute pleasure to give all of you, who are with us here today, an overview of where the company is and how we're proceeding on our transformation. So we have prepared some slides for you today, and I look forward to showing them to you now. As you can see on the screen, the 2020 Annual General Meeting of Shareholders includes depiction of our key strategy, which is transformation. And as you look at the image of the gears on the slide, you'll see that in a fairly precise form, we've chosen a number of strategies that together all work to drive the company ahead. As I make the presentation today, I also want to call your attention to our statement with regarding forward-looking statements and also the reconciliation of any non-GAAP financial measures. And as you can see on the screen, our statement of that fact is here. I know you're all fast readers, but it is important, and I'd like to move forward from here. If you take a look now, what you'll see is that in Phase 1 of our transformation, the company spent the 5-year period from fiscal '15 through fiscal '19 on the strategies that you see on the left. And as you can see, we chose a set of strategies that altogether in that interlocking fashion that you can see in the image are designed to propel the company ahead. This was an epic choice for Helen of Troy to put, frankly, first of all, its first and only global strategy, one approved by the Board of Directors and one brought before our shareholders in an Investor Day that we conducted in 2015. Since then, we completed Phase 1, and I'll show you some of the results in a few minutes. And because we have success, we went on to a second phase of transformation, and you can see that on the right-hand side of the slide. That's that same image with the gears. And I can say that they not only interlock in a precise fashion, but they're all highly connected to each other and the intention is to bring Helen of Troy to the whole next level. On this slide that I'm showing now, you can see a bit of detail on each one. And rather than walk you through the specifics of each, I'd rather just give you the general concept. The general concept is that under each of these strategic choices is a very beefy set of key projects, whether it's how we allocate our capital, like you can see in the upper left; how we invest in our leadership brands, as you can see in the middle; or how we now in Phase 2 and for the first time choose international as a primary strategy, and we are doubling down on our bets in international. You can also see that we are working to maximize our operating efficiency, things like leveraging the scale that we have as a total company, being aggressive about how we attack waste across the company and a high rate of return or rate of ROI, as we call it, on the investments that we make. M&A, or mergers and acquisitions, remains a primary goal at Helen of Troy and is a key part of our strategy and also a carryover from the first phase. And we continue to add leadership brands into the company, most recently Drybar. We also have the strategy of accelerating our shared services, and I'll speak more about them in a few minutes. Just to give you the general idea, when we rebuilt the company in the first phase of the transformation, in each of the business units, we took out things like legal, finance, human resources, operations, consolidated them all into a global shared services platform, had enough success with that, that we've decided to accelerate it further in Phase 2 and really move to a world-class operating company. We're now standardizing and simplifying those procedures and we're using the efficiencies that we're generating to fuel the whole flywheel of transformation at the company. We're also further diversifying our global supply chain beyond the original high level of dependency on China. In terms of people, you could see on the bottom of the slide that we're unifying our people and we're also attracting and retaining, now as an employer of choice, top talent all around the world. In terms of inclusion, we've added the ability to include people of all types, diversity. And their high level of engagement makes us a much stronger company. We've added a new training academy of the company, and we've raised the bar on performance and excellence all across the company as we take the company to Phase 2. The last has to do with consumer-centric. And in consumer-centric, I guess, my main point is that we are a consumer-centric company. And that means one that focuses on delighting consumers at every stage of the consumer journey. Each of those strategies is designed to support our major stakeholders. Shareholders, you can see them here on this slide, are supported by our associates, our work with consumers, our work with customers and our work with communities. I would trust you would all agree that if we serve all of those stakeholders well, our long-term shareholders will benefit substantially and will have a sustainable program, and that's exactly our intention. As I move ahead, I want to show you here the goals that we have set for Phase 2 and they are aggressive but achievable. These are average goals, except where otherwise noted. And as you can see on the chart, whether it's organic sales; expansion of our operating margin; growth of our earnings per share; our commitment to continuing to invest in our business, especially our leadership brands; return on our invested capital; our annual cash flow from operations; or our capital expenditures, in each case, we've set aggressive goals, clear goals, numerical ones. And as I mentioned before, on average, during the course of Phase 2, this is what we're shooting for. As you look at the next slide, you'll see our track record is pretty good on this front. And these 4 graphs that you see here show you what happened so far since we began all this in fiscal year '15. The blue bars show the 5 years of Phase 1, and the green bar shows you the 1 year we've had so far in Phase 2. And it's a good story. If you take a look at the revenues, we started out as a $1.3 billion company. And last fiscal year, which we announced our results in April, we're now a $1.7 billion company. We have had a compound annual growth rate of 4.5% during that time. During fiscal year '15 through '19 or said another way, the Phase 1, that number was growing at a 3.7% annual clip. And it's very similar for each of the other measures here. The adjusted operating margin, which you could see on the upper right, was growing at a 6.6% clip so far during the transformation. And you can see inside the bars there that our margin itself has grown by about 158 basis points during that period of time. If you look at the free cash flow in the bottom left, you'll see that we've roughly doubled it. It started out at about $114 million. Last year, it was $254 million, and that's been growing at a 14.3% annual clip. And if you take a look at our earnings per share, it's a straight-up double. We started at $4.50. We closed fiscal '19 at $8.06 and fiscal '20, the last year, at $9.30. And we're very proud to have been able to double the earnings of the company during this period of time. As I take a closer look now on this next slide, on the left side, you'll see that our revenues are accelerating. So just looking at the last 3 or 4 years, you can see that the revenues grew first 4.1%, then 6.9%, then 6.6% and now 10.6%, and that's a pretty healthy level of growth. The total CAGR or compound annual growth rate is about 7% during this period and meaningfully ahead of where we were on average. So we sure like the acceleration. Core of the company is growing at an 8% clip, and that noncore part that you see down in the bottom is actually shrinking at a 7.4% clip. You might think that's a red flag, but it's not. What it is, is a choice. We've chosen to focus on our leadership brands, focus on our core and grow the whole nut faster and faster each year. I mean that's been our track record so far. If you look at the right-hand side of the screen, what you'll see is an improvement also in our profitability. And that improvement in profitability has made a very meaningful difference in our ability to invest. And I mean by that, investing in our leadership brands. They've been growing at an even faster rate. Our ability to improve our operating margin, which I mentioned before, is growing and also our ability to fund the major investments that we make at Helen of Troy. As I move to the next slide, I want to show you that the operating margin is now, as I mentioned before, 15.8%. And the margin expansion is really driven by those leadership brands. That's new products, that's improvements to our portfolio, it's our shared service efficiencies and what we call Project Refuel, which has been a restructuring program to allow us to move from one phase of the company's operations to another. Those investments, you see them down on the bottom in light blue, we've been investing to the point of a 12.6% annual clip. And one might think, well, let me get this straight, you can either expand your margins where you can invest in the business, but you sure can't do both. And I guess my message to you here today is that's exactly what we have done. We've expanded our profitability and increased our investments to 12.6% annual clip, and that's resulted in a very positive flywheel effect for the company. And all that's been done in the face of a few headwinds, whether it's the tariffs that we all saw and went through over the last year or 2, foreign exchange headwinds that have gone against the U.S. dollar and -- sorry, against foreign currency, so hard to bring them back to stronger U.S. dollars and also the challenges that go with operating a company that is growing so quickly that we take on more inventory and all the other challenges of faster growth. As we take a look here at those leadership brands, I want to show you what they are, because I've referred to them more than once here. You can see on the screen here, there's 8 brands, OXO, Honeywell, Braun, Vicks, Hydro Flask, PUR, Hot Tools and Drybar. And these represent the vast majority of our portfolio where really all of that investment is going. As I show you what's in them on this next slide, you'll see that the pillars holding up Helen of Troy are those 8 brands, and they stand on a pretty solid platform. Each of them is differentiated as a market leader. They have higher margins than the company average. They grow through expanding their businesses and into adjacencies. And they're an efficient use of our assets. And each of those brands, as I've mentioned, is growing faster. I can also say that we've accelerated that so far in Phase 2 versus what we've seen in Phase 1, and that's a good sign. It means our investments are paying off. I can say also that when we started this, it was about 60% of the company's revenues were in the leadership brands. And today, through that focus, those investments and that higher rate of return, that number is closer to 80%. You can see also that our brands are resonating in the marketplace. And if you take a look at this slide, you're going to see a lot of awards. The awards are coming on brands like OXO, Hydro Flask and Revlon, 3 spectacular brands, that are being called out by independent market measurement firms like NPD, that's similar for IRI or Nielsen, so you might be familiar with some of those names. But NPD in particular gives awards each year for the brands that have made the biggest difference in the prior year. And you can see that our brands have not been shy in winning them. OXO has won in the last 3 or 4 years 5 different awards. Hydro Flask has won 3. And Revlon has won 1 and been nominated for the other. If you look over on the right-hand side, you'll see that these awards are for things like fastest market share growth, the top increase in online market share growth. In the case of OXO, kind of the granddaddy of them all, our biggest brand, it won a new award that's never been given by NPD before, which is what they call an industry award for the top increase in the entire housewares industry in the United States in calendar year 2019. We're awfully proud of these brands and hopefully gives you a sense that they're winning in the marketplace. They're also taking notes, as you can see on this slide, or being noticed by the industry and consumers. You'll see on this slide about 40 different design awards or excellence awards or endorsements and all of these in the last 24 months. So whether it's iF, Red Dot awards, which are highly prestigious; Good Housekeeping awards, Allure magazine, Glamour magazine, Cosmopolitan magazine. And you can also see that the brands that are listed under there are pretty much all of ours, Hot Tools, Hydro Flask, Honeywell, OXO, Braun, PUR, Revlon and on it goes. I think the message is that we're very proud that our brands are getting this kind of attention by consumers with market share and by the industry with awards. We're also proud of our growth online. If you take a look at this slide, you'll see that when we began the transformation in Phase I, about 6% of all the sales of Helen of Troy were online. Today, that number is 28%. And there's a pretty steady growth in every single year between the 2 points. So if you look at Phase 1 on the left side of the chart, we tripled that number, 6% became 19%. And since then, in the very early days of Phase 2, the 19% went first to 24% and now to 28%. That's a lot of growth. And what it does is it resonates with consumers that we are available online. It speaks to our own transformation that we're able to bring our products online at this rate. And it also speaks to capability growth and the kind of people that work at Helen of Troy. We're proud of this. And frankly, we've benchmarked ourselves against pretty much all of our competitors, including the ones in our proxy statement and none others in our checking have numbers like this. Culture is also a big deal at Helen of Troy. And the slide that you can see now demonstrates the foundation of our culture. We call it I RISE, and you can see here that, that's a mnemonic. It stands for things like in touch, mutual respect, ingenuity, shared success and truly exceptional people. There's a statement under each of those, and you can see it here for exactly what we mean by that. And hanging off of each of these are cascaded or specific behaviors that all of us at Helen of Troy practice and live every single day. As a result of all of this, we've come together in a big way as a company. So for those of you who know us for a long time, you might remember that we were a beauty company that later branched out into housewares and later branched out into health and home. In the last 6 or 7 years of transformation, we've brought that together under this statement of corporate identity that you see here. It kind of fits on a postcard, who are we? And in about 100 words, we've been able to define exactly who we are. And you could see how we boldly bring brands into our family. We're proudly powered by our exceptional people. And we seek out to build world-class brands. We literally live this every single day. And I could say that when this was rolled out around Helen of Troy, it was just kind of a heck, yes, resonating all around the world as people came together as one company. So whether it's the culture, whether it's the statement of corporate identity, the online, the results that you saw on hard measures like earnings, cash flow, earnings per share, margins, revenues, et cetera, it all rolls up into performance. And that's what you could see on this slide. This slide shows our shareholder return during that same period of time. We announced a change from our founder who did a wonderful job creating Helen of Troy and bringing it so far to this era in 2014. That's where this chart begins. We've indexed our stock performance against some good benchmarks. One of them is the NASDAQ Composite where we trade. So that's all the companies on the NASDAQ. Another is a bit more specific to our industry. The gray line here is the Dow Jones U.S. personal care products group. And then the orange line -- or the -- sorry, the red line -- sorry, yellow line is our peer group, the ones that are stated in our proxy statement. And you can see that in all time periods, we've met or significantly exceeded the performance of the best of any of those indexes, and on a total basis, have outperformed all of them by a fairly large margin. We're proud of this, and we're not done yet, frankly. We believe the best is yet to come at Helen of Troy, and we're proud of what we've been able to do so far. So you might have that question of what are you doing right now. So that's what these next 2 slides are about. The first one shows our results. At the beginning of the first quarter -- sorry, at the beginning of this fiscal year, which is our first quarter. And those results are excellent, and you can see it here. We grew the consolidated net sales of the company by 11.8%. The leadership brands grew at even a faster clip, 15.7%. The adjusted diluted earnings per share faster than that, 22.8%. And the online growth at 33%, the fastest of them all. These are just 4 of the measures, but there are many more. I can also show you that if you look at this slide, how we split by business and how each of our business units have grown. I could say here, the key word is diversification. We have a diversified portfolio, and that served us extremely well in the COVID era. You can see it here. The Health & Home business on the left grew almost 30% in the first quarter, so think of thermometers, humidifiers, air purifiers, water purifiers. Housewares not only held its own, but after growing 23% in the last fiscal year first quarter, shrank 3%, this one. So imagine in a COVID environment, with most of the stores closed, the business keeping 20 -- at 23 point growth versus when everything was open and there was no COVID. OXO performed especially well as we were all home and cooking and cleaning, and God forbid, a little barware every now and then. And in the case of the Hydro Flask business, it held up particularly well with all the stores closed. And remember, it wasn't an essential item, as deemed by Amazon and others, still very late in the quarter compared to more essential items like Lysol or Purell or things like that, thermometers during that period. Beauty grew during the quarter. Beauty grew 5%, and that includes Drybar. If you take the Drybar acquisition out, it declined only 1.5%. Again, the stores were closed, the vast majority, in the first quarter. Obviously, most of that was online. And we shined, as we said before, in that area. I'd like to change now to a different thought, which is to just update you on a couple of key areas in the company, and then I'll let you go to some questions and answers. In terms of those updates, a little on the -- our COVID response as a company, a little update on Diversity, Equity and Inclusion; on ESG or environmental, social and governance; and on innovation, particularly in Beauty, which is a business that we've been able to successfully turn around, and innovation was one of the keys. Starting with COVID. You can see here on the slide that we came into the crisis with a very healthy business. We had momentum. You saw that on the prior slides with that growth and all through Phase 1 and into Phase 2, we were rocking and we still are. You see the fact that we've accelerated. We do have that trusted and diversified portfolio. We have very significant market share positions and the awards to show for it. Exceptional people all around Helen of Troy, and that culture has united them. No time more than now during our lockdown period has that been tested, and it's been impressive how our people have responded. Our shared services are highly capable and fully operational at this time. And we have a proven ability to stay nimble. Boy, did that come in handy as the crisis unfolded. We acted very quickly and decisively to protect our people, temporarily reduce our costs and to adapt whether it was travel, office closures, how we ship, our testing protocols, safety protocols, all of it. We focused on protecting the capabilities that we built during all those years of transformation. So 6 years of building, we were not prepared to let COVID tear that down. So instead, we went for some temporary cost interventions where we shared sacrifice. We shared it in personnel costs. And we made decisions about what we would invest in, what might slide to the right for a bit on our time lines of further investing in Phase 2. As we did so, consumer demand surged, and you saw that in the prior results, and we faced some supply constraints. So as we shipped all that we had, we were quickly making more, whether it was in China, Mexico or other suppliers and flowing to the work. That's worked very well for us so well, in fact, that we've been able now to lean back in to those same initiatives back into our people and into new hiring and further selected investments in Phase 2. And that's helping the company considerably as we try to accelerate even in the face of COVID. So we're proud so far. And that said, we're humble. COVID is a monster. Every day is a new one. And I don't think I'd have to tell anyone on this call that we're -- none of us are able to predict the future of it. But we certainly are adapting well, and we've been highly resilient and successful so far. I'll move now to the Diversity, Equity and Inclusion area. This is important. And my main message here is that we're building something here that's built to last. This is not a knee-jerk reaction to what we've seen all in the news so many find problematic. We do, too. We actively condemn racism in any form as well as the violence and destruction that's been seen. None of this is right. And Helen of Troy has decided to invest heavily in this area. What does that mean? It means making Diversity, Equity and Inclusion much more explicit. We've revisited some of our factual -- foundational documents and updated them. We've created immediate, purposeful and focused elements to build over time. And you can see them here on the slide. Each of these 8 red circles orbit around that program. And whether it's our own leadership, who we are, how we train, develop, recruit, listen to our people internally and also externally, what we participate in, in terms of our own people internally as well as externally, donations we make in terms of time, volunteerism and money and how it interacts with ESG or environmental, social and governance. All of these elements are part of the program. And as I emphasized at the beginning, it's built to last. This is not a knee-jerk. It's something that we think is a multiyear project, and we think it's going to make us much stronger as an employer of choice and as an outstanding organization. ESG, I've mentioned it once or twice, so I thought I'd pause for just a minute to update you on that. ESG is a big deal. Environmental, social and governance is a wonderful way to serve all kinds of shareholders -- stakeholders, including our shareholders, and build sustainable platform for the long term. We established a task force inside of the company a while back, and it is getting some specifically very positive results. We're going to add a new leader over the entire ESG program later this calendar year. We have a 3-year road map of activities, and that whole approach is linked to our brands, our products, our packaging, our employees, communities, our supply chain, our sources, our energy consumption and the environment itself. And the idea is improvement for all stakeholders, and you can see here on the right-hand side of the chart exactly what we mean by each of those under each of the 3 areas. In terms of ESG, I can also say that it's very much in action at the company. And I'm going to show you, if you'll allow me, just a couple of short videos to see how our brands are living this, and they have been for some time. So the first one here is in our Health & Home division, that large group that was about 40% of our sales, and the PUR brand is inside Health & Home. And what I can say here is that we're very proud of our ability to participate in crisis, whether it was Flint, Michigan, a few years back or more recently in Newark, New Jersey. I think this video tells the story, and I'll play it for you now. [Presentation]

We're very proud of that. And it's not just on PUR. As you can see here in our Housewares division, the OXO brand has joined with 1% for the Planet. This is -- you may have heard of this broad initiative. It has many, many top brands included in it. And 1% of the Planet -- for the Planet allows us to take 1% of our revenues on OXO and other expenditures on the brand, whether it's our volunteerism, our donations and other activities and contribute it to causes that are very resonant with the OXO audience and with what the brand stands for. I'm going to show you a short video here of what we mean by that. [Presentation]

Great. Well, good stuff on OXO. And 1/3 of our leadership brands and the last ones that I'll show you today pertain to our Hydro Flask brand. And on the Hydro Flask brand, we have 2 major initiatives around ESG. One of them we call Parks for All, which has to do with inclusion, meaning all people, and also parks, which is the environmental aspect. And we've been at this for some time. This video will show you that, and I'll show you an even shorter one with regard to Hydro Flask on the environmental front. [Presentation]

You get the idea. Parks for All has been going for some time, and you saw some pretty amazing statistics there as well, and we're just getting started. Hydro Flask has grown a lot, and our ability to contribute and the ability to make a difference has been very well noted, and we won a lot of awards for that. Our last one here has to do with the environmental side, and I'll play that for you now the shortest of all the videos. [Presentation]

As I hope you can see, ESG is very much in action at Helen of Troy at a corporate level. It's highly connected to diversity and inclusion. It's good for our shareholders, it's good for all stakeholders, and it's good for our brands. And you can see it's very much on the equity of our brands as well, which we think is very important. Well, before I leave you today, I just wanted to talk a bit about innovation and specifically on Beauty. As I mentioned before, we're consumer-centric and no place more so in the last few years than in Beauty. And you can see that our Beauty division here on this slide is focused on making everyone look and feel more beautiful. We made the acquisition of Drybar, as you see here. We did this in January of 2020. It's very fast growing in the year in which we bought it. COVID, of course, has changed things temporarily with the salons. But nonetheless, we're holding our own and doing quite well, as we announced in the first quarter results back in July. It's a prestige haircare brand, and adding something of that nature to Helen of Troy rounds out our portfolio very nicely. Think of good, better and best, good Revlon, better Hot Tools, best Drybar. And that gives us 3 different types of consumers, 3 different price points and different channels to compete in as well, different levels of technology and benefits. It also gives us something unique that's very special about Drybar which is kind of a moated brand. And what I mean by the moat is who else has got 150 salons around them that are extremely popular with millions of users each year in a non-COVID year that 7,000 or 8,000 times a day are giving demonstrations by professional stylists of using Drybar products on women who are there for blowouts. And those very products are not only for sale in the store, but there's for sale through Ulta, Sephora, Nordstrom, now Amazon as well and able to allow women to extend their blowout at home or to just do the blowout at home. And that gives them all kinds of flexibility. We're proud of the acquisition. We're excited about what it brings to Helen of Troy, and we'll definitely keep you posted on its progress. Innovation at Beauty has been a big deal. If you look at this slide, what you'll see is our volumizer on the left-hand side, and it doesn't look like a hair dryer, it doesn't look like a curling iron, it doesn't look like a straightening iron either. What it is, is a combination of a round brush and a dryer in one unit that's incredibly light, powerful and saves women time. It's a one-step hair dryer and volumizer. And the result has just been an explosive response by consumers. You can see it here on the slide. And if you can't see the number, I'll help you. It's 63,000 reviews on Amazon. It's Amazon's top choice. Got 4.4 out of 5 stars. And the volumizer has become the overwhelming market leader, not only on Amazon, but is now helping us take market leadership at stores such as Target, Ulta and others. And we are making a very big difference with this product in consumers' lives. It's not just on Revlon. We've now proliferated it on to other parts of our business as well. So it's on Revlon. It's on Hot Tools. And as you can see, I hope, in the pictures, it has the ability to remove its heads now and to go across into our other brands as well. So I guess when I sum it all up, what do you have with Helen of Troy these days? You have a company that can create value, and it works kind of like a flywheel. Helen of Troy invests in its leadership brands, it innovates. That drives organic revenue growth. Our margins expand as we sweeten our mix and get good ROI. To put those shared services to work to add further value and efficiencies to the business, all that runs through a highly efficient, debt and tax structure. We attack the waste in our working capital all the time, whether it's inventory, accounts receivable or any other area. We invest with low capital expenditure. And then we put new capital to work, either acquisition or low-risk investments. And from time-to-time, we buy back stock and return capital to shareholders that way. The more we do this and the faster it goes, the more it's a flywheel. And as we add new businesses to it like Drybar, Hydro Flask and so many others, we believe that we can keep this going for some time on a sustainable basis. So with that, I'll simply say thank you. Helen of Troy is all about elevating lives and soaring together. And I'm very grateful to all of you for believing in us and allowing me to update you here today. As a reminder, we do have a few minutes for questions and only confirmed shareholders as of the record date are permitted to ask questions. Questions pertinent to meeting matters may be asked by typing in the box provided on your screen. While we are waiting for questions to be submitted, we will answer questions that our shareholders previously submitted in our online pre-meeting shareholder forum. In case we are unable to answer all questions submitted due to the time constraints, we will post the answers to all remaining questions on our Investor Relations website as soon as practical, following the end of this meeting. These answers will remain available for 1 year after the date of the meeting.

Well, thank you. Our first question is a 2-part question. The first part being, are there any longer-term sales trends that are emerging from changes in consumer behavior during the pandemic? And the second part being, is the high demand for Health & Home products sustainable?

Yes. I'm glad this one came up. There are long-term sales trends that are emerging from changes in the pandemic. We haven't yet seen the long term. So I can't say with certainty, but I can definitely say that the long-term trend of people shopping online is accelerating. You saw that in our own results that I showed you earlier, when we went from 24% to 28% in a single quarter. You also see it broadly in other companies that announced that consumers are increasingly moving from bricks to click, as they say. You can see it at Amazon in their results. You can see it all over the world and maybe practice the same behavior yourself. So this is definitely a long-term trend. It was going on for some time, but it is accelerating in COVID for obvious reasons. That doesn't mean brick-and-mortar is out. Brick-and-mortar is still the rest of our business and even bigger portion of most other companies. And that means that the balance is simply shifting. I do not believe there will be a time when online replaces brick-and-mortar, but that balance or that tipping point is going faster. Another area that I think is changing is the institutional, whether it's warehouses, factories, office buildings, airports, schools, universities. So many places today are looking for ways to preserve people's health. That's very good for a company like ours. We sell air purifiers, water purifiers, thermometers, all kinds of products that are good for institutions. So short term, I think there's a trend in that direction, you can see it. We see it in our sales. And long term, frankly, it creates an opportunity, which is to make products that are even better suited to institutions. So think of ones that are connected devices that are allowed to be controlled by -- like a hotel out of their central group and all the ones in the room, all the air purifiers to see when you need to change their filters and that kind of thing. So short and long term. And the last thing I'd say that's clear about the high demand for Health & Home products is, first of all, the diversified portfolio has made a big difference for us. Health & Home has been a steady grower for us since Helen of Troy bought it at the end of 2010. And that portfolio has performed well over time. In terms of sustainability, I think that it adds a lot of value to have things like thermometers, humidifiers, inhalants, water, air, et cetera, fans, heaters. So whether it's hot, cold, people are sick, there's concerns about water, like you saw in the Newark situation. There is a sustainability to this -- wildfires out in California is yet another example. That said, you don't get 100-year flood every year, and COVID does feel like 100-year flood. So we're looking for other ways to make sure that we keep our sales going with new products, innovation, international expansion, et cetera. And we have the whole rest of our portfolio, which is the vast -- the rest of the company or 60% of Helen of Troy sales. Are there other questions?

Yes. Next question is international is a big area of focus in your Phase 2. Can you talk about specific progress you've made outside the U.S.?

Yes. International represents about 20% of Helen of Troy's portfolio, and our brands are generally world equities, global equities. Think of Honeywell, Vicks, Braun, OXO as examples. And we have the ability now to bring these into larger markets, China being an example, Mexico, most of the big European countries. We've made a lot of progress on this. During Phase 1, we did these things, but we did not make it the primary focus of those brands. In Phase 2, doubling down on international is one of the strategies that we've chosen. And while we're still highly focused on the United States, and it is our primary market, the expansion efforts in places like China, Europe, in fact, all of EMEA and Asia Pacific are our chosen areas. We've added a new President to the company during Phase 2 about a year ago, and that President is focused on all 3 of our business units in those 2 regions, EMEA and Asia Pacific. As well as Helen of Troy grew in the first quarter, which was at 11.8% clip, international grew faster than that in Q1. And so we like our start to the fiscal year. And I can also say that during the course of Phase 2, our plans are considerable in those 2 regions. And we believe, as we announced about a year, almost 1.5 years ago now, that there's an incremental $100 million worth of revenues on an organic basis without acquisition in international during the 5-year period of Phase 2. So we like our prospects and we like our progress so far.

Great. We have another question. Your online sales have increased as a percentage of total. How have your digital initiatives served you well during COVID when more consumers are shopping online? How did these initiatives fit with the importance of brick-and-mortar sales?

Yes, we touched on some aspects of this a little earlier, but I think the story is a bit bigger. If you go all the way back to the beginning of Phase 1, you can see that digital was not a big deal at Helen of Troy, 6%. If you go to where we are now, just before COVID, that number was 24%. Now during COVID, it has accelerated. So the answer to the specific question of how have they increased, the answer is they increased 33% from the same period 1 year ago. And they're about 4x or a little bit more than that versus where we were 6 years ago. The digital initiatives during COVID have really been important. Think of consumers. Let's start right there. We're consumer-centric. If you're worried about COVID-19, and everybody is, you don't just need a thermometer, you probably need more than one. You need one for your go-bag, you need one for your family. You might need one for work, although many of us are working from home now. And you're concerned. And maybe you need more than one type of thermometers. We make all the types. You might want a no-touch thermometer that scans without touching, ear thermometer that's highly noninvasive or a more traditional thermometer. We make all of these, and that's important. We also find that whether it's air purifiers, humidifiers, et cetera, online has been absolutely critical to drive their sales. It also increases our response time. For example, during the month of July, Good Morning America put out about a 5-minute segment on the importance of air purifiers on television. The world is masking up, so is the United States. And air purifiers help a lot with indoor air quality. I personally believe that will be true even more so as we go into the fall and the winter. Unfortunately, COVID is still with us, but we'll be more indoors. When that happens, it's even more important to monitor indoor air quality. So selling all of that online makes it possible for people to research the products, buy the products, have them delivered to their homes. And frankly, our sales have responded accordingly, and that's a good thing. In terms of what it means for brick-and-mortar, as I said before, brick-and-mortar remains important. Just math. If we're 28% online, it means that we're roughly 72% not online. And that brick-and-mortar piece is the rest, and that's very important to shoppers. For omnichannel, we'll be wherever consumers want to be, and brick-and-mortar is a very important part. I think of it super-simple, which is, do you go to stores or do you go online? And for almost anyone in the world, the answer is, you do both. If you want more stuff online, we're there. If you want to be there in the stores, we're also there. So we support our customers and we support our consumers, and online is a big driver for us.

You've touched on this a little bit. But can you talk a bit about how the Helen of Troy corporate culture has helped the company navigate through this pandemic, this crisis?

Yes, I'm awfully grateful for the culture at Helen of Troy, and I'm very proud of it as well. In fact, I would say that without the work that's been done in the last 4 or 5 years on the subject of culture, we would not have been able to navigate the crisis nearly as well. We have remarkable people at Helen of Troy. And as you heard earlier, whether it's the I RISE culture or that corporate identity centered on elevating lives and soaring together, the way our people have come together working largely from home and many of them, frontline essential workers working right in our warehouses or test labs or our facilities around the world, people have relied on that ingenuity, on that excellence, on that feeling of ownership throughout the company. And many of them are shareholders, in fact, the vast majority. And as a result, our people have come together in the biggest way. That unity, that interdependency has allowed people to do together what none of them can do alone. The sort of deposit that we've made on the subject of culture have really paid off during this period of time. And we continue to invest in it even now, whether it's through online sessions, through collaboration tools like Teams or Zoom or others that we use at the company, video and even what we're doing today. We find ways to collaborate and make sure that people stick together. So I'd say that the culture is not only a big deal, but it has been an enabler in the crisis. I can also say that if you look on Glassdoor or other objective online and outside measures, you'll see that it helps us recruit, and people consistently speak about the culture as one of the main reasons they join the company or one of the main reasons they like the company, recommend it to their friends. And that's why we're now a 4-star operation in -- on Glassdoor. And 5 years ago, we were more of a 2, 2.5-star operation.

Well, thank you, Julien. I don't believe we have any more time for questions. So I'll turn it back to you.

Great. Well, thank you, [ Will ]. And those were good questions, I appreciate that, from shareholders. And that does conclude our Q&A session. And as a reminder to our participants, we will post answers to any remaining questions on our Investor Relations website as soon as practical. So we'd ask you -- our great thanks. Stay safe. Stay healthy. And thank you for spending time with us today. We're very excited about our prospects, and we appreciate your confidence in Helen of Troy.

The meeting has now concluded. Thank you for attending. You may now disconnect your lines.