Helen of Troy updates Project Pegasus, to reduce global workforce 10%

The company previously announced a global restructuring plan intended to expand operating margins through initiatives designed to improve effectiveness and efficiency. Project Pegasus, under the leadership of the COO, Noel Geoffroy, and with advice from a premium global consulting firm, includes initiatives to further optimize the company’s brand portfolio, streamline and simplify the organization, accelerate cost of goods savings projects, enhance the efficiency of its supply chain network, optimize its indirect spending, and improve its cash flow and working capital, as well as other activities. The company anticipates these initiatives will create operating efficiencies, as well as provide a platform to fund future growth investments. As part of the Pegasus workstream focused on streamlining and simplifying the organization, the company is announcing three major changes to the structure of its organization. The first change results in combining the Beauty and Health & Wellness businesses into a single reportable segment that will be referred to and reported as "Beauty & Wellness." The second is the creation of a North America Regional Market Organization responsible for sales and go to market strategies for all categories and channels in the United States and Canada. The third is further centralization of certain functions under shared services, especially in Operations and Finance to better support the business segments and RMOs. The new structure will reduce the size of the global workforce by approximately 10%. The majority of the role reductions will be completed by March 1st, 2023. Nearly all of the remaining role reductions are expected to be completed before the end of fiscal year 2024. The company believes that these changes better focus business segment resources on brand development, consumer-centric innovation and marketing, the RMOs on sales and go to market strategies, and shared services on their respective areas of expertise while also creating a more efficient and effective organizational structure. Beginning with the company’s fiscal 2023 Form 10-K, future disclosures will reflect the two reportable segments, Home & Outdoor and Beauty & Wellness. Consistent with the second quarter of fiscal 2023, the company continues to have the following expectations regarding Project Pegasus: Targeted annualized pre-tax operating profit improvements of approximately $75 million to $85 million, which the company expects to begin in fiscal 2024 and be substantially achieved by the end of fiscal 2026. Estimated cadence of the recognition of the savings will be approximately 25% in fiscal 2024, approximately 50% in fiscal 2025 and approximately 25% in fiscal 2026. Total profit improvements to be realized approximately 60% through reduced cost of goods sold and 40% through lower SG&A. Total one-time pre-tax restructuring charges of approximately $85 million to $95 million over the duration of the plan, which is expected to be completed during fiscal 2025 and will primarily be comprised of severance and employee related costs, professional fees, contract termination costs, and other exit and disposal costs. All of the company’s operating segments and shared services will be impacted by the plan.