Helen of Troy's automated Tennessee hub choked orders for OXO and Hydro Flask

Helen of Troy — parent of OXO, Hydro Flask and Vicks — opened a new automated distribution center in Gallaway, Tennessee, in fiscal 2024 as part of Project Pegasus, a restructuring plan targeting $26–30 million of savings in fiscal 2025. CEO Noel Geoffroy billed the site as bringing "significant new scale and service capabilities that will set us up for years to come" and said it would progressively take on a larger concentration of the company's US volume.

The startup misfired. On a 9 July 2024 earnings call the company reported "unexpected challenges" integrating the automation technology, which hit fulfillment of small retail customer and direct-to-consumer orders for brands like OXO and Hydro Flask. CFO Brian Grass said the issues involved Curlsmith's ERP system at the Tennessee site and had already cost revenue in the first quarter of fiscal 2025.

Only a limited subset of orders relied on the highest level of automation, but Grass warned the impact was "enough to have a meaningful effect on our results for the first half of fiscal '25." The site was supposed to handle greater capacity for inline customization and personalization of direct-to-consumer Hydro Flask orders, per an October 2023 earnings call.

The disruption sat inside a broader supply-chain overhaul that had already cut 18% of SKUs and shrunk the distribution footprint by four sites. Management said shipping throughput improved progressively through June and early July as the Tennessee team worked with suppliers, and expected the issues to subside by the end of the next fiscal quarter.

Lost revenue in Q1 fiscal 2025 from a subset of OXO and Hydro Flask orders — enough for a 'meaningful effect' on first-half results.

Project Pegasus concentrated volume into one highly automated site, so a failure at startup propagated straight into customer orders.

The affected slice was narrow — orders on the highest automation tier, complicated by the Curlsmith ERP integration — but it landed on the company's flagship consumer brands.

The timing was the worst available: the disruption ran directly into the fiscal 2025 first half the $26–30 million savings plan was supposed to prove out.

The highest-automation tier carries the widest failure blast radius: a 'limited subset' of orders can still dent a half-year when it is the tier everything routes through.

Speaking on the results covering the July 22, 2024 report, Geoffroy said the Tennessee team was working diligently with suppliers on the remaining issues and had seen shipping throughput progressively improve during June and early July, with the issues expected to subside by the end of the next fiscal quarter. The company did not respond to a request for comment before publication.