Helen of Troy Shares Down on Q4 Earnings Miss, Sales Decline Y/Y

Helen of Troy Limited HELE saw its share price decrease 12% in Thursday after-hours, following the dismal fourth-quarter fiscal 2025 results. The company’s top and bottom lines decreased year over year. Earnings missed the Zacks Consensus Estimate. Due to evolving global tariff policies and the resulting business and macroeconomic uncertainty, the company is not providing a fiscal 2026 outlook at this time. It is currently evaluating the incremental impact of tariffs along with the full scope and timing of potential mitigation strategies. As part of its response, the company is accelerating efforts to diversify production outside of China to regions with lower tariff exposure and costs, with a goal of reducing China tariff-related cost of goods sold to under 20% by the end of fiscal 2026. That being said, the company remains focused on factors within its control. With prudent steps to preserve margins, reduce debt and strengthen cash flow, the company believes it is well-positioned to navigate a dynamic environment while delivering value to consumers and stakeholders.Helen of Troy Limited Price, Consensus and EPS Surprise Helen of Troy Limited price-consensus-eps-surprise-chart | Helen of Troy Limited QuoteHELE’s Quarterly Performance: Key Metrics and InsightsThe company posted adjusted earnings of $2.33 per share, which includes an unfavorable impact from foreign currency of nearly 11 cents. The metric missed the Zacks Consensus Estimate of $2.34. Moreover, the bottom line declined 4.9% from $2.45 reported in the year-ago period, due to lower adjusted operating income and higher interest expense. These were somewhat countered by a reduced adjusted effective income tax rate and lower weighted average diluted shares outstanding. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)The company reported net sales of $485.9 million, surpassing the Zacks Consensus Estimate of $480 million, while decreasing 0.7% from $489.2 million posted in the year-ago period. This decline was caused by a $23.9 million or 4.9% decrease in Organic business sales. This was mainly due to lower Beauty hair appliance sales in the Beauty & Wellness segment and a drop in insulated beverageware sales within the Home & Outdoor segment. The decline in Organic sales was partially offset by a $23 million or 4.7% contribution from the acquisition of Olive & June.The consolidated gross profit margin contracted 40 basis points (bps) to 48.6% due to a less favorable product mix across segments and an unfavorable customer mix within the Home & Outdoor segment. These factors were partially offset by lower inventory obsolescence expense and reduced commodity and product costs, partly driven by Project Pegasus initiatives. The consolidated SG&A ratio increased 120 basis points (bps) to 35.9, driven by acquisition-related expenses associated with the Olive & June transaction and increased marketing investments as the company reinvested in its brands. These increases were partially offset by lower overall personnel costs, primarily due to reduced annual incentive and share-based compensation expenses.The adjusted operating income declined 9.9% to $75 million, while the adjusted operating margin decreased 160 bps to 15.4%. We expected an adjusted operating margin of 16.5% for the quarter.HELE’s Segmental PerformanceNet sales in the Home & Outdoor segment declined 1.6% to $219.8 million, primarily due to softness in the insulated beverageware category. This was caused by continued competitive pressure, weaker overall consumer demand, reduced replenishment orders from retailers, lower closeout channel sales and decreased club sales in the home category.These were partially offset by growth in packs and the home category. Also, higher international sales across all categories, increased online sales in the home category and expanded retailer distribution in both the insulated beverageware and home categories aided the performance.Net sales in the Beauty & Wellness segment rose 0.1% to $266.1 million. The increase was primarily due to the contribution from the acquisition of Olive & June. This growth was partially offset by a $21.2 million or 8% decline in Organic business, largely due to lower demand for hair appliances and prestige hair liquids amid softer consumer demand, heightened competitive pressures and a net distribution decline. These declines were partially mitigated by growth in the Wellness category across most product lines, including air purification, heaters, humidifiers, fans, and thermometry. However, water filtration sales declined, impacted by the previously disclosed expiration of an out-license relationship and category softness.HELE’s Financial PositionHelen of Troy ended 2025 with cash and cash equivalents of $18.9 million and total short and long-term debt of $916.9 million. Net cash provided by operating activities for fiscal 2025 was $113.2 million. The free cash flow for the same period was $83.1 million.This Zacks Rank #4 (Sell) company has lost 56.5% in the past three months compared with the industry’s decline of 32.8%.Image Source: Zacks Investment ResearchKey PicksUnited Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1.9% and 485.7%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average.Utz Brands UTZ engages in the manufacture, marketing and distribution of snack foods in the United States and presently carries a Zacks Rank of 2. UTZ delivered a trailing four-quarter earnings surprise of 8.8%, on average.The Zacks Consensus Estimate for Utz Brands’ current financial-year sales and earnings indicates growth of 1.4% and 10.4%, respectively, from the year-ago numbers.BJ's Wholesale Club Holdings, Inc. BJ operates membership warehouse clubs on the eastern half of the United States and currently holds a Zacks Rank #2. BJ delivered an earnings surprise of 12% in the trailing four quarters, on average. The Zacks Consensus Estimate for BJ's Wholesale Club’s current fiscal-year sales and earnings implies growth of 5.8% and 4.4%, respectively, from the year-ago figures.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BJ's Wholesale Club Holdings, Inc. (BJ): Free Stock Analysis Report United Natural Foods, Inc. (UNFI): Free Stock Analysis Report Helen of Troy Limited (HELE): Free Stock Analysis Report Utz Brands, Inc. (UTZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks