Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

分组1 - Helen of Troy (HELE) reported quarterly earnings of $0.59 per share, exceeding the Zacks Consensus Estimate of $0.54 per share, but down from $1.21 per share a year ago, indicating an earnings surprise of +9.26% [1] - The company posted revenues of $431.78 million for the quarter ended August 2025, surpassing the Zacks Consensus Estimate by 3.09%, but down from $474.22 million year-over-year [2] - Over the last four quarters, Helen of Troy has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] 分组2 - The stock has underperformed significantly, losing about 53.9% since the beginning of the year compared to the S&P 500's gain of 14.8% [3] - The current consensus EPS estimate for the coming quarter is $2.03 on revenues of $492.27 million, and for the current fiscal year, it is $4.62 on revenues of $1.73 billion [7] - The Zacks Industry Rank indicates that the Cosmetics industry is currently in the bottom 11% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Q2 Fiscal 2026 Results - Net sales decreased by 8.9% to $431.8 million compared to $474.2 million in Q2 FY25 [18, 19] - Organic net sales decreased by 16.0%, with approximately 30% decline driven by tariff-related trade disruptions [19] - Adjusted diluted EPS declined 51.2% to $0.59 compared to $1.21 in Q2 FY25 [18, 19] - Adjusted EBITDA margin decreased by 340 basis points to 8.4% compared to 11.8% in Q2 FY25 [18, 19] - Gross margin decreased by 140 basis points to 44.2% compared to 45.6% in Q2 FY25 [18, 19] Tariff-Related Impacts and Mitigation - Approximately 53% of the consolidated net sales decline was tariff-related [30] - The company expects the unmitigated tariff impact to be less than $20 million in Fiscal Year 2026 [35] - The company is implementing a supplier diversification plan to reduce ongoing exposure to China tariffs, aiming for approximately 25% to 30% of consolidated Cost of Goods Sold (COGS) by the end of Fiscal Year 2026 [37] FY26 Outlook - The company expects net sales to be in the range of $1.739 billion to $1.780 billion, a decline of 8.8% to 6.7% [41] - Adjusted diluted EPS is expected to be in the range of $3.75 to $4.25, a decline of 47.7% to 40.7% [41] - The company anticipates interest expense in the range of $56 million to $57 million and a non-GAAP adjusted effective tax rate range of 15% to 16% [43]

Summary of Key Points Core Viewpoint - U.S. stock futures are slightly lower, with Nasdaq futures down approximately 0.1% on Thursday, indicating a cautious market sentiment [1]. Company-Specific Summaries Helen of Troy Ltd (NASDAQ:HELE) - Helen of Troy reported quarterly earnings of 59 cents per share, surpassing the analyst consensus estimate of 53 cents per share [1]. - The company achieved quarterly sales of $431.781 million, exceeding the analyst consensus estimate of $418.806 million [1]. - For FY2026, Helen of Troy projects adjusted EPS between $3.75 and $4.25, which is below market estimates of $4.58 [1]. - The company anticipates sales in the range of $1.739 billion to $1.780 billion, compared to market estimates of $1.750 billion [1]. - Shares of Helen of Troy fell 16.7% to $23.00 in pre-market trading following the earnings report [2]. Ferrari NV (NYSE:RACE) - Ferrari's shares decreased by 12.4% to $420.00 in pre-market trading after the release of its comprehensive 2030 strategic plan and updated near-term financial guidance [4]. Apogee Therapeutics, Inc. (NASDAQ:APGE) - Apogee Therapeutics' stock tumbled 9.6% to $42.70 in pre-market trading after announcing a $300 million underwritten public offering [4]. AZZ Inc (NYSE:AZZ) - AZZ Inc's shares declined by 9.4% to $96.01 in pre-market trading following weak second-quarter results [4]. Plug Power Inc. (NASDAQ:PLUG) - Plug Power's stock fell 7.8% to $3.37 in pre-market trading after a decline of more than 5% on Wednesday, despite raising $370 million from the immediate exercise of 185.4 million warrants at $2 per share [4]. Other Notable Stocks - Inventiva (NYSE:IVA) shares fell 6.3% to $5.02 in pre-market trading [4]. - NextNRG Inc (NASDAQ:NXXT) saw a decline of 5.8% to $2.59 in pre-market trading [4].

Group 1: Helen of Troy Ltd - Helen of Troy reported quarterly earnings of 59 cents per share, beating the analyst consensus estimate of 53 cents per share [1] - The company reported quarterly sales of $431.781 million, exceeding the analyst consensus estimate of $418.806 million [1] - For FY2026, Helen of Troy expects adjusted EPS of $3.75-$4.25, lower than market estimates of $4.58, and sales of $1.739 billion-$1.780 billion, compared to market estimates of $1.750 billion [1] Group 2: Stock Movements - Helen of Troy shares fell 16.7% to $23.00 in pre-market trading following the earnings report [2] - Ferrari NV shares decreased by 12.4% to $420.00 after releasing its 2030 strategic plan and updated financial guidance [4] - Apogee Therapeutics, Inc. shares tumbled 9.6% to $42.70 after announcing a $300 million public offering [4] - AZZ Inc shares declined 9.4% to $96.01 following weak second-quarter results [4] - Plug Power Inc shares fell 7.8% to $3.37 after raising $370 million from the exercise of warrants [4] - Inventiva shares decreased by 6.3% to $5.02 in pre-market trading [4] - NextNRG Inc shares fell 5.8% to $2.59 in pre-market trading [4]

PART I. FINANCIAL INFORMATION This section provides a comprehensive overview of the company's financial performance and position, including detailed statements and explanatory notes [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Presents unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flows, and detailed explanatory notes [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Presents the company's financial position, detailing assets, liabilities, and stockholders' equity at specific reporting dates | Metric (in thousands) | August 31, 2025 | February 28, 2025 | Change | % Change | | :-------------------- | :-------------- | :---------------- | :----- | :------- | | **Assets:** | | | | | | Total assets, current | $938,129 | $931,712 | $6,417 | 0.7% | | Goodwill | $569,150 | $1,182,899 | $(613,749)| -51.9% | | Other intangible assets, net | $429,025 | $566,756 | $(137,731)| -24.3% | | Total assets | $2,407,554 | $3,132,083 | $(724,529)| -23.1% | | **Liabilities:** | | | | | | Total liabilities, current | $549,952 | $466,259 | $83,693 | 17.9% | | Long-term debt, excluding current maturities | $871,345 | $907,519 | $(36,174)| -4.0% | | Total liabilities | $1,481,272 | $1,448,644 | $32,628 | 2.3% | | **Stockholders' Equity:** | | | | | | Total stockholders' equity | $926,282 | $1,683,439 | $(757,157)| -45.0% | [Condensed Consolidated Statements of (Loss) Income (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20(Loss)%20Income%20(Unaudited)) Details the company's financial performance, including sales revenue, gross profit, operating income, and net (loss) income over specific periods | Metric (in thousands, except per share data) | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :------------------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Sales revenue, net | $431,781 | $474,221 | $803,436 | $891,068 | | Gross profit | $190,681 | $216,070 | $365,692 | $419,149 | | SG&A | $176,999 | $179,692 | $344,663 | $350,173 | | Asset impairment charges | $326,394 | $0 | $740,779 | $0 | | Operating (loss) income | $(315,717) | $34,852 | $(722,755) | $65,615 | | Net (loss) income | $(308,643) | $17,014 | $(759,361) | $23,218 | | Basic (Loss) earnings per share | $(13.44) | $0.75 | $(33.09) | $1.00 | | Diluted (Loss) earnings per share | $(13.44) | $0.74 | $(33.09) | $1.00 | [Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income%20(Unaudited)) Outlines net (loss) income and other comprehensive (loss) income components, reflecting total comprehensive financial performance | Metric (in thousands) | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net (loss) income | $(308,643) | $17,014 | $(759,361) | $23,218 | | Other comprehensive loss, net of tax | $(1,983) | $(4,312) | $(7,739) | $(3,614) | | Comprehensive (loss) income | $(310,626) | $12,702 | $(767,100) | $19,604 | [Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Unaudited)) Shows changes in common stock, additional paid-in capital, retained earnings, and accumulated other comprehensive (loss) income over time | Metric (in thousands) | Balances at Feb 28, 2025 | Net Loss (6 months) | Other Comprehensive Loss (6 months) | Balances at Aug 31, 2025 | | :-------------------- | :----------------------- | :------------------ | :---------------------------------- | :----------------------- | | Common Stock Par Value | $2,286 | - | - | $2,296 | | Additional Paid in Capital | $367,106 | - | - | $377,039 | | Accumulated Other Comprehensive (Loss) Income | $2,278 | - | $(7,739) | $(5,461) | | Retained Earnings | $1,311,769 | $(759,361) | - | $552,408 | | Total Stockholders' Equity | $1,683,439 | $(759,361) | $(7,739) | $926,282 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Summarizes cash inflows and outflows from operating, investing, and financing activities, indicating changes in cash and cash equivalents | Metric (in thousands) | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :-------------------- | :---------------------------- | :---------------------------- | | Net cash provided by operating activities | $47,868 | $69,916 | | Net cash used by investing activities | $(20,975) | $(14,101) | | Net cash used by financing activities | $(23,390) | $(54,179) | | Net increase in cash and cash equivalents | $3,503 | $1,636 | | Cash and cash equivalents, ending balance | $22,370 | $20,137 | [Note 1 - Basis of Presentation and Related Information](index=9&type=section&id=Note%201%20-%20Basis%20of%20Presentation%20and%20Related%20Information) Provides background on Helen of Troy Limited, its business segments, seasonal operations, supply chain, and recent acquisition of Olive & June - Helen of Troy Limited, incorporated in Bermuda in 1994, is a global consumer products company with brands like OXO, Hydro Flask, Osprey, Vicks, Braun, Honeywell, PUR, Hot Tools, Drybar, Curlsmith, Revlon, and Olive & June. It operates two reportable segments: Home & Outdoor and Beauty & Wellness[17](index=17&type=chunk)[18](index=18&type=chunk) - The company's business is seasonal, with the highest sales volume and operating income typically occurring in the **third fiscal quarter** (ending November 30th). Products are primarily purchased from manufacturers in China, Mexico, Vietnam, and the U.S[19](index=19&type=chunk) - On December 16, 2024, the company acquired Olive & June, an omni-channel nail care brand, for an initial cash consideration of **$224.7 million** and contingent cash consideration of up to **$15.0 million**. This acquisition was added to the Beauty & Wellness segment[20](index=20&type=chunk) [Note 2 - New Accounting Pronouncements](index=10&type=section&id=Note%202%20-%20New%20Accounting%20Pronouncements) Discusses recently issued accounting standards, ASU 2025-05 and ASU 2025-06, and their expected impact on the company's financial reporting - ASU 2025-05 (Financial Instruments – Credit Losses) was issued in July 2025, allowing entities to assume current conditions for accounts receivable and contract assets when estimating credit losses. It is effective for fiscal years beginning after December 15, 2025, and is not expected to have a **material impact**[24](index=24&type=chunk) - ASU 2025-06 (Intangibles – Goodwill and Other – Internal-Use Software) was issued in September 2025, requiring capitalization of software costs when management authorizes funding and project completion is probable. It is effective for fiscal years beginning after December 15, 2027, and the company is evaluating its impact[25](index=25&type=chunk) [Note 3 - Accrued Expenses and Other Current Liabilities](index=11&type=section&id=Note%203%20-%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Details the composition and changes in various accrued expenses and other current liabilities, including compensation, sales allowances, and advertising | (in thousands) | August 31, 2025 | February 28, 2025 | Change | % Change | | :------------- | :-------------- | :---------------- | :----- | :------- | | Accrued compensation, benefits and payroll taxes | $26,760 | $16,096 | $10,664 | 66.3% | | Accrued sales discounts and allowances | $46,035 | $36,600 | $9,435 | 25.8% | | Accrued sales returns | $21,559 | $20,190 | $1,369 | 6.8% | | Accrued advertising | $29,199 | $25,716 | $3,483 | 13.5% | | Other | $73,111 | $62,138 | $10,973 | 17.7% | | Total accrued expenses and other current liabilities | $196,664 | $160,740 | $35,924 | 22.3% | [Note 4 - Acquisition of Olive & June](index=11&type=section&id=Note%204%20-%20Acquisition%20of%20Olive%20%26%20June) Provides details on the acquisition of Olive & June, including initial and contingent cash consideration, funding, and recognized goodwill and intangible assets - On December 16, 2024, Helen of Troy acquired Olive & June, an omni-channel nail care brand, for an initial cash consideration of **$224.7 million** (net of cash acquired and a favorable post-closing adjustment of **$3.9 million**) and contingent cash consideration of up to **$15.0 million**[27](index=27&type=chunk) - The acquisition was funded by cash on hand and borrowings from the existing revolving credit facility. The contingent consideration is subject to Olive & June achieving certain annual adjusted EBITDA targets for calendar years **2025-2027**[27](index=27&type=chunk)[28](index=28&type=chunk) - Goodwill of **$150.7 million** was recognized, primarily attributable to expected synergies from leveraging operational scale, customer relationships, and distribution capabilities. Acquired intangible assets included trade names (**$51.0 million**), customer relationships (**$8.0 million**), and non-compete agreements (**$1.6 million**)[29](index=29&type=chunk)[31](index=31&type=chunk) [Note 5 - Goodwill and Intangibles](index=12&type=section&id=Note%205%20-%20Goodwill%20and%20Intangibles) Reports significant asset impairment charges for goodwill and other intangible assets across Home & Outdoor and Beauty & Wellness segments due to market conditions - During the first and second quarters of fiscal 2026, the company recognized pre-tax asset impairment charges totaling **$326.4 million** for the three months ended August 31, 2025, and **$740.8 million** for the six months ended August 31, 2025, due to a sustained decline in stock price, downward revisions to internal forecasts, and macroeconomic factors[33](index=33&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) | Segment (in thousands) | Three Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2025 | | :--------------------- | :------------------------------ | :---------------------------- | | Home & Outdoor | $85,537 | $304,632 | | Beauty & Wellness | $240,857 | $436,147 | | **Total** | **$326,394** | **$740,779** | - Goodwill impairment charges for the six months ended August 31, 2025, totaled **$609.6 million**, with **$229.1 million** in Home & Outdoor (Hydro Flask, Osprey) and **$380.5 million** in Beauty & Wellness (Health & Wellness, Drybar, Curlsmith). The Hydro Flask reporting unit's goodwill was reduced to **zero**[37](index=37&type=chunk)[39](index=39&type=chunk) - Other intangible asset impairment charges for the six months ended August 31, 2025, totaled **$131.2 million**, affecting trade names (Hydro Flask, Osprey, PUR), trademark licenses (Revlon), customer relationships (Drybar, Hydro Flask), and other intangibles (Drybar, Hydro Flask)[39](index=39&type=chunk)[41](index=41&type=chunk) [Note 6 - Share-Based Compensation Plans](index=15&type=section&id=Note%206%20-%20Share-Based%20Compensation%20Plans) Outlines the 2025 Stock Incentive Plan, share-based compensation expense, and unrecognized compensation, including various award types - The 2025 Stock Incentive Plan replaced the 2018 Plan on August 20, 2025, with **1,155,478 shares** available for future issuance. During the first quarter of fiscal 2026, **272,909 service condition awards**, **191,946 performance-based awards**, and **128,081 market condition awards** were granted[43](index=43&type=chunk)[44](index=44&type=chunk) | (in thousands) | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Share-based compensation expense | $9,372 | $5,487 | $9,668 | $11,320 | | Less: income tax benefits | $(445) | $(221) | $(602) | $(485) | | Net expense | $8,927 | $5,266 | $9,066 | $10,835 | - Total unrecognized share-based compensation was **$26.6 million** as of August 31, 2025, to be recognized over a weighted average amortization period of **2.1 years**. This includes estimates for target achievement for fiscal 2026 and 2025 awards, and **zero percent** for fiscal 2024 awards[46](index=46&type=chunk) [Note 7 - Repurchases of Common Stock](index=16&type=section&id=Note%207%20-%20Repurchases%20of%20Common%20Stock) Details the common stock repurchase authorization, remaining availability, and shares acquired in connection with share-based compensation - In August 2024, the Board authorized the repurchase of up to **$500 million** of common stock over **three years**, replacing a former authorization. As of August 31, 2025, **$498.4 million** remained available under this authorization[47](index=47&type=chunk) | (in thousands, except share and per share data) | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :---------------------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Common stock repurchased on the open market: | | | | | | Number of shares | — | — | — | 1,011,243 | | Aggregate value of shares | $— | $— | $— | $100,019 | | Common stock received in connection with share-based compensation: | | | | | | Number of shares | 5,279 | 1,403 | 29,939 | 26,775 | | Aggregate value of shares | $151 | $109 | $1,482 | $3,125 | [Note 8 - Restructuring Plan](index=16&type=section&id=Note%208%20-%20Restructuring%20Plan) Describes Project Pegasus, a global restructuring plan completed in fiscal 2025, aimed at improving efficiency and reducing costs - Project Pegasus, a global restructuring plan initiated in fiscal 2023 to improve efficiency and reduce costs, was completed in the **fourth quarter of fiscal 2025**. Targeted savings are expected through fiscal **2027**[50](index=50&type=chunk) | Metric (in thousands) | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Pre-tax restructuring costs | $3,005 | $1,526 | $3,005 | $3,361 | | Cash restructuring payments | N/A | N/A | $4,000 | $5,600 | | Remaining liability (as of Aug 31, 2025) | N/A | N/A | $3,700 | N/A | [Note 9 - Commitments and Contingencies](index=17&type=section&id=Note%209%20-%20Commitments%20and%20Contingencies) Discusses ongoing legal proceedings, including patent litigation with Brita LP, and discussions with the EPA regarding product packaging claims - The company is involved in patent litigation with Brita LP regarding PUR water filtration systems. The ITC initially ruled against the company but later issued a Final Determination in its favor on **September 19, 2023**. Brita LP is appealing this decision to the Federal Circuit, with oral arguments held on **August 5, 2025**[53](index=53&type=chunk) - Discussions with the U.S. Environmental Protection Agency (EPA) regarding packaging claims on certain air/water filtration and humidifier products were ongoing. The company voluntarily stopped shipments, repackaged products, and expects potential future fines or penalties, though these cannot be **reasonably estimated**[54](index=54&type=chunk)[55](index=55&type=chunk) [Note 10 - Long-Term Debt](index=18&type=section&id=Note%2010%20-%20Long-Term%20Debt) Provides details on the company's Credit Agreement, revolving and term loans, interest rates, and anticipated amendment due to covenant compliance concerns | (in thousands) | August 31, 2025 | February 28, 2025 | Change | % Change | | :------------- | :-------------- | :---------------- | :----- | :------- | | Revolving loans | $411,900 | $678,100 | $(266,200)| -39.3% | | Term loans | $486,719 | $243,750 | $242,969 | 99.7% | | Total borrowings under Credit Agreement | $898,619 | $921,850 | $(23,231)| -2.5% | | Total long-term debt | $893,220 | $916,894 | $(23,674)| -2.6% | | Long-term debt, excluding current maturities | $871,345 | $907,519 | $(36,174)| -4.0% | - The company has a **$1.5 billion** Credit Agreement maturing on **February 15, 2029**, comprising a **$1.0 billion** revolving credit facility, a **$250 million** term loan, and a **$250 million** delayed draw term loan facility. Borrowings bear floating interest rates, with **$625 million** (as of Aug 31, 2025) hedged by interest rate swaps[57](index=57&type=chunk)[59](index=59&type=chunk) - As of August 31, 2025, the company was in compliance with all debt covenants. However, due to negative sales trends and macroeconomic conditions, the company anticipates seeking an amendment to the Credit Agreement in the **third fiscal quarter** to extend temporary adjustments to the maximum leverage ratio and reduce the minimum interest coverage ratio[63](index=63&type=chunk) [Note 11 - Fair Value](index=20&type=section&id=Note%2011%20-%20Fair%20Value) Explains the fair value hierarchy for financial instruments and details non-recurring fair value measurements related to significant asset impairment charges - The company classifies financial assets and liabilities into a fair value hierarchy (**Level 1**, **2**, or **3**). U.S. Treasury Bills are **Level 1**, most other financial instruments are **Level 2**, and the contingent consideration liability from the Olive & June acquisition is **Level 3** due to unobservable inputs (projected adjusted EBITDA)[64](index=64&type=chunk)[70](index=70&type=chunk) | (in thousands) | August 31, 2025 | February 28, 2025 | | :------------- | :-------------- | :---------------- | | **Assets:** | | | | Cash equivalents (money market accounts) | $3,882 | $3,852 | | U.S. Treasury Bills | $11,562 | $11,268 | | Interest rate swaps | $743 | $1,065 | | Foreign currency derivatives | $149 | $2,163 | | **Total assets** | **$16,336** | **$18,348** | | **Liabilities:** | | | | Interest rate swaps | $106 | $221 | | Contingent consideration | $4,100 | $4,100 | | Foreign currency derivatives | $7,692 | $119 | | **Total liabilities** | **$11,898** | **$4,440** | - During the six months ended August 31, 2025, non-recurring fair value measurements resulted from impairment charges of **$609.6 million** for goodwill, **$73.0 million** for indefinite-lived intangible assets, and **$58.2 million** for definite-lived intangible assets[72](index=72&type=chunk)[73](index=73&type=chunk) [Note 12 - Financial Instruments and Risk Management](index=23&type=section&id=Note%2012%20-%20Financial%20Instruments%20and%20Risk%20Management) Describes the company's use of foreign currency forward contracts and interest rate swaps to manage foreign currency and interest rate risks - Approximately **14%** and **15%** of net sales revenue for the three and six months ended August 31, 2025, respectively, were denominated in foreign currencies (primarily Euros, Canadian Dollars, British Pounds). The company uses foreign currency forward contracts to mitigate foreign currency exchange rate risk[77](index=77&type=chunk)[78](index=78&type=chunk) - Foreign currency exchange rate net gains of **$2.9 million** (3 months) and **$9.5 million** (6 months) were recorded in income tax expense for the period ended August 31, 2025, compared to net losses in the prior year[78](index=78&type=chunk) - Interest on outstanding debt is based on floating rates, with **$625 million** (as of Aug 31, 2025) hedged by interest rate swaps to fix rates. Both foreign currency contracts and interest rate swaps are designated as cash flow hedges, with changes in fair value recorded in OCI[79](index=79&type=chunk) [Note 13 - Accumulated Other Comprehensive Income (Loss)](index=26&type=section&id=Note%2013%20-%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) Details the components and changes in accumulated other comprehensive income (loss), primarily influenced by foreign currency contracts | (in thousands) | Balance at Feb 29, 2024 | Other comprehensive income (loss) before reclassification (6 months) | Amounts reclassified out of AOCI (6 months) | Tax effects (6 months) | Balance at Aug 31, 2025 | | :------------- | :---------------------- | :--------------------------------------------------- | :---------------------------------------- | :--------------------- | :---------------------- | | Interest Rate Swaps | $1,917 | $1,870 | $(2,077) | $50 | $489 | | Foreign Currency Contracts | $182 | $(12,075) | $2,493 | $2,000 | $(5,950) | | **Total** | **$2,099** | **$(10,205)** | **$416** | **$2,050** | **$(5,461)** | - The balance of Accumulated Other Comprehensive Income (Loss) shifted from a gain of **$2.1 million** at February 29, 2024, to a loss of **$5.5 million** at August 31, 2025, primarily driven by a significant other comprehensive loss before reclassification from foreign currency contracts[84](index=84&type=chunk) [Note 14 - Segment and Geographic Information](index=26&type=section&id=Note%2014%20-%20Segment%20and%20Geographic%20Information) Provides financial data by reportable segment (Home & Outdoor, Beauty & Wellness) and geographic region, including sales revenue and operating income - The company operates two reportable segments: Home & Outdoor and Beauty & Wellness. Segment performance is assessed by the Chief Operating Decision Maker (CODM) using segment operating income, which includes net sales revenue, cost of goods sold, SG&A, asset impairment, and restructuring charges[85](index=85&type=chunk)[86](index=86&type=chunk) | (in thousands) | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | **Sales revenue, net:** | | | | | | Home & Outdoor | $208,721 | $241,944 | $386,704 | $440,403 | | Beauty & Wellness | $223,060 | $232,277 | $416,732 | $450,665 | | **Operating (loss) income:** | | | | | | Home & Outdoor | $(72,578) | $31,152 | $(286,371) | $47,002 | | Beauty & Wellness | $(243,139) | $3,700 | $(436,384) | $18,613 | | (in thousands) | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Domestic sales revenue, net | $330,496 (76.5%) | $365,750 (77.1%) | $608,456 (75.7%) | $666,430 (74.8%) | | International sales revenue, net | $101,285 (23.5%) | $108,471 (22.9%) | $194,980 (24.3%) | $224,638 (25.2%) | [Note 15 - Income Taxes](index=29&type=section&id=Note%2015%20-%20Income%20Taxes) Discusses the company's tax structure, impact of global tax reforms, and the effect of goodwill and intangible asset impairment charges on income tax benefits - The company's foreign income is largely not subject to U.S. taxation, and intangible assets are primarily owned by foreign affiliates, leading to higher earnings in lower tax jurisdictions[91](index=91&type=chunk) - Global tax reform initiatives, including OECD's Pillar Two (global minimum corporate income tax of **15%**), are expected to increase the fiscal 2026 effective tax rate. Barbados and Bermuda have enacted **9%** and **15%** corporate income tax rates, respectively, effective fiscal **2025/2026**[93](index=93&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) - During the three and six months ended August 31, 2025, the company recognized **$326.4 million** and **$740.8 million**, respectively, in goodwill and other intangible asset impairment charges, including **$246.0 million** and **$511.0 million** of non-deductible goodwill. A valuation allowance of **$13.5 million** (3 months) and **$30.0 million** (6 months) was recorded on a related deferred tax asset[100](index=100&type=chunk)[101](index=101&type=chunk) - The income tax benefit as a percentage of loss before income tax was **6.4%** for the three months ended August 31, 2025 (vs. **22.0%** expense YoY), and **(1.2)%** for the six months ended August 31, 2025 (vs. **42.1%** expense YoY), primarily due to impairment charges and increased tax benefits for discrete items, partially offset by valuation allowances[102](index=102&type=chunk)[103](index=103&type=chunk) [Note 16 - Earnings Per Share](index=30&type=section&id=Note%2016%20-%20Earnings%20Per%20Share) Presents basic and diluted weighted average shares outstanding and explains the exclusion of anti-dilutive securities due to net losses | (in thousands) | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Weighted average shares outstanding, basic | 22,959 | 22,814 | 22,951 | 23,169 | | Weighted average shares outstanding, diluted | 22,959 | 22,839 | 22,951 | 23,236 | | Anti-dilutive securities | 454 | 155 | 442 | 140 | - Due to net losses for the three and six months ended August 31, 2025, incremental shares from share-based compensation arrangements (**53 thousand** and **41 thousand**, respectively) were excluded from diluted EPS computation as their effect would be anti-dilutive[105](index=105&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=32&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Provides management's perspective on financial condition, results of operations, key trends, liquidity, and critical accounting estimates [Overview](index=33&type=section&id=Overview) Introduces Helen of Troy as a global consumer products company, highlights recent CEO appointment, significant asset impairment charges, and the Olive & June acquisition - Helen of Troy is a global consumer products company with a diversified brand portfolio across Home & Outdoor and Beauty & Wellness segments. G. Scott Uzzell was appointed as the **new CEO** effective **September 1, 2025**[109](index=109&type=chunk)[110](index=110&type=chunk) - The company recorded pre-tax asset impairment charges of **$326.4 million** (Q2 FY26) and **$740.8 million** (YTD FY26) due to a sustained decline in stock price and revised internal forecasts[111](index=111&type=chunk) - The acquisition of Olive & June on December 16, 2024, for **$224.7 million** (initial cash) and up to **$15.0 million** (contingent), was added to the Beauty & Wellness segment, aiming to broaden the beauty portfolio and accelerate growth[113](index=113&type=chunk) [Significant Trends Impacting the Business](index=34&type=section&id=Significant%20Trends%20Impacting%20the%20Business) Examines the impact of U.S. tariff policies, macroeconomic conditions, consumer spending shifts, increased competition, and the Project Pegasus restructuring plan - Evolving U.S. tariff policies, including IEEPA and Section 232 tariffs, have increased costs and negatively impacted sales. The company is diversifying production outside China and implementing cost reductions and price increases to mitigate risks[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[118](index=118&type=chunk)[120](index=120&type=chunk) - Macroeconomic trends like high inflation, interest rates, and geopolitical events have negatively impacted consumer disposable income and spending, adversely affecting the business. The company has implemented cost reduction measures and optimized marketing investments[121](index=121&type=chunk)[122](index=122&type=chunk) - Consumer spending shifts and increased competition led to reduced replenishment orders from retailers and declines in online channel net sales (down **22%** for Q2 FY26 YoY). The company has invested in distribution capabilities and a centralized e-commerce platform[124](index=124&type=chunk)[125](index=125&type=chunk)[128](index=128&type=chunk) - Project Pegasus, a restructuring plan completed in Q4 FY25, aims for **$75-85 million** in annualized pre-tax operating profit improvements by end of fiscal **2027**, primarily through reduced cost of goods sold (**60%**) and lower SG&A (**40%**)[129](index=129&type=chunk)[132](index=132&type=chunk) - The company is awaiting the Federal Circuit's opinion on Brita LP's appeal regarding the PUR water filtration patent litigation, which could have a **material adverse impact** if adversely determined[133](index=133&type=chunk) [RESULTS OF OPERATIONS](index=40&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes consolidated net sales revenue, gross profit, operating (loss) income, and net (loss) income, detailing the impact of asset impairment charges and acquisitions | Metric (in thousands) | Q2 FY26 | Q2 FY25 | YTD FY26 | YTD FY25 | | :-------------------- | :------ | :------ | :------- | :------- | | Sales revenue, net | $431,781| $474,221| $803,436 | $891,068 | | Cost of goods sold | $241,100| $258,151| $437,744 | $471,919 | | Gross profit | $190,681| $216,070| $365,692 | $419,149 | | SG&A | $176,999| $179,692| $344,663 | $350,173 | | Asset impairment charges | $326,394| $— | $740,779 | $— | | Restructuring charges | $3,005 | $1,526 | $3,005 | $3,361 | | Operating (loss) income | $(315,717)| $34,852 | $(722,755)| $65,615 | | Net (loss) income | $(308,643)| $17,014 | $(759,361)| $23,218 | | Diluted (Loss) earnings per share | $(13.44)| $0.74 | $(33.09) | $1.00 | - Consolidated net sales revenue decreased **8.9%** in Q2 FY26 and **9.8%** in YTD FY26, primarily due to a **16.0%** (Q2) and **16.5%** (YTD) decline in Organic business, partially offset by the Olive & June acquisition (**7.0%** Q2, **6.8%** YTD contribution)[149](index=149&type=chunk)[151](index=151&type=chunk) - Consolidated operating loss was **$315.7 million** (Q2 FY26) and **$722.8 million** (YTD FY26), largely driven by significant asset impairment charges. Adjusted operating income decreased **41.9%** (Q2) and **51.8%** (YTD) due to higher retail trade/promotional expense, tariffs, increased share-based compensation, and unfavorable operating leverage[145](index=145&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) - Net loss was **$308.6 million** (Q2 FY26) and **$759.4 million** (YTD FY26), resulting in diluted loss per share of **$13.44** (Q2) and **$33.09** (YTD), primarily due to asset impairment charges and lower operating income[145](index=145&type=chunk)[206](index=206&type=chunk)[208](index=208&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's cash flow from operations, investing and financing activities, debt facilities, and anticipated need for Credit Agreement amendments - The company relies on cash flow from operations and borrowings under its Credit Agreement to finance operations, capital expenditures, acquisitions, and share repurchases. Cash and cash equivalents totaled **$22.4 million** as of August 31, 2025[210](index=210&type=chunk) | Cash Flow Activity (in thousands) | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :-------------------------------- | :---------------------------- | :---------------------------- | | Net cash provided by operating activities | $47,868 | $69,916 | | Net cash used by investing activities | $(20,975) | $(14,101) | | Net cash used by financing activities | $(23,390) | $(54,179) | - Investing activities used **$21.0 million** (YTD FY26), an increase from **$14.1 million** (YTD FY25), primarily due to increased capital and intangible asset expenditures for manufacturing diversification outside of China[215](index=215&type=chunk)[216](index=216&type=chunk) - Financing activities used **$23.4 million** (YTD FY26), a decrease from **$54.2 million** (YTD FY25), mainly due to fewer common stock repurchases, partially offset by net repayments of long-term debt[217](index=217&type=chunk) - As of August 31, 2025, **$578.6 million** was available for revolving loans under the Credit Agreement, and **$212.7 million** was available per the maximum leverage ratio. The company expects to seek an amendment to its Credit Agreement due to potential covenant compliance issues from negative sales trends and macroeconomic conditions[221](index=221&type=chunk)[223](index=223&type=chunk) [Critical Accounting Policies and Estimates](index=58&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Explains critical accounting judgments, particularly regarding goodwill and intangible asset impairment testing, fair value determination, and related uncertainties - During Q1 and Q2 FY26, a goodwill impairment triggering event occurred due to a sustained decline in stock price and downward revisions to internal forecasts, leading to quantitative impairment testing[224](index=224&type=chunk)[225](index=225&type=chunk) - Pre-tax asset impairment charges totaled **$326.4 million** (Q2 FY26) and **$740.8 million** (YTD FY26), impacting both Home & Outdoor and Beauty & Wellness segments[226](index=226&type=chunk) - Goodwill impairment charges for YTD FY26 were **$609.6 million**, with Hydro Flask's goodwill reduced to **zero**. The fair value of the OXO reporting unit was **107%** of its carrying value, with a hypothetical **10%** sales decline potentially leading to a **$156.3 million** impairment[229](index=229&type=chunk)[230](index=230&type=chunk)[232](index=232&type=chunk) - Intangible asset impairment charges for YTD FY26 totaled **$73.0 million** for indefinite-lived assets (trade names like Hydro Flask, Osprey, PUR) and **$35.1 million** for definite-lived assets (Revlon, Curlsmith, Drybar trade names). Customer relationships and other intangibles for Drybar and Hydro Flask were reduced to **zero**[237](index=237&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk) - Management judgment in estimating future cash flows, discount rates, and other assumptions for fair value determination is critical and subject to uncertainty from factors like tariffs, economic conditions, and consumer demand, which could lead to **further material impairment charges**[233](index=233&type=chunk)[234](index=234&type=chunk)[244](index=244&type=chunk)[245](index=245&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=65&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Reports no material changes in market risk disclosures since the Form 10-K filing - No material changes in market risk disclosures since the last Form 10-K filing[250](index=250&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=65&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) CEO and CFO concluded disclosure controls were effective, with no material changes in internal control over financial reporting - Disclosure controls and procedures were **effective** at the reasonable assurance level as of August 31, 2025[251](index=251&type=chunk) - No material changes in internal control over financial reporting occurred during the period covered by this Quarterly Report on Form 10-Q[251](index=251&type=chunk) PART II. OTHER INFORMATION This section provides additional information beyond financial statements, covering legal proceedings, risk factors, equity sales, and other disclosures [ITEM 1. LEGAL PROCEEDINGS](index=65&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Details ongoing legal claims and proceedings, noting no material changes since the Form 10-K filing - No material changes in legal proceedings since the Form 10-K, with updates detailed in Note 9[252](index=252&type=chunk) [ITEM 1A. RISK FACTORS](index=65&type=section&id=ITEM%201A.%20RISK%20FACTORS) Refers to risk factors in Form 10-K, confirming no material changes since its filing - No material changes in risk factors since the Form 10-K filing[253](index=253&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=66&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Outlines the common stock repurchase program and shares acquired for tax withholding, with no open market repurchases - A **$500 million** common stock repurchase authorization became effective in August 2024, with **$498.4 million** remaining as of August 31, 2025[254](index=254&type=chunk)[257](index=257&type=chunk) | Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | | :----- | :----------------------------------- | :--------------------------- | | June 1 through June 30, 2025 | 2,929 | $30.72 | | July 1 through July 31, 2025 | 1,701 | $26.84 | | August 1 through August 31, 2025 | 649 | $24.06 | | **Total** | **5,279** | **$28.65** | - Shares purchased include those acquired from associates to satisfy tax withholding on equity awards; there were **no common stock open market repurchases** during the three months ended August 31, 2025[256](index=256&type=chunk) [ITEM 5. OTHER INFORMATION](index=66&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Confirms no Rule 10b5-1 trading plans were adopted or terminated by officers or directors during the period - No Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements were adopted or terminated by officers or directors during the three months ended August 31, 2025[258](index=258&type=chunk) [ITEM 6. EXHIBITS](index=67&type=section&id=ITEM%206.%20EXHIBITS) Lists exhibits filed with the Form 10-Q, including the 2025 Stock Incentive Plan, CEO employment agreement, and certifications - Key exhibits include the 2025 Stock Incentive Plan, CEO employment agreement, CEO/CFO certifications (Rule 13a-14(a) and 18 U.S.C. Section 1350), and iXBRL formatted financial statements[259](index=259&type=chunk) [SIGNATURES](index=68&type=section&id=SIGNATURES) The report was duly signed on October 9, 2025, by the Chief Executive Officer and Chief Financial Officer - The report was signed on **October 9, 2025**, by G. Scott Uzzell (CEO) and Brian L. Grass (CFO)[264](index=264&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) [CEO and CFO Statements](index=1&type=section&id=CEO%20and%20CFO%20Statements) Helen of Troy's new CEO, Mr G Scott Uzzell, expressed confidence in the company's ability to achieve a comeback by focusing on consumers, innovation, and sustainable growth - New CEO Mr G Scott Uzzell is confident in the company's comeback, focusing on consumers, innovation, and sustainable growth[4](index=4&type=chunk) - CFO Mr Brian L Grass noted Q2 net sales and adjusted EPS were at the better end of guidance, despite significant business disruption and cost headwinds[4](index=4&type=chunk) - Company is implementing measures to enhance execution, operational efficiency, go-to-market effectiveness, and fuel product-driven growth[4](index=4&type=chunk) [Second Quarter Fiscal 2026 Financial Highlights](index=1&type=section&id=Second%20Quarter%20Fiscal%202026%20Financial%20Highlights) Helen of Troy Limited reported a consolidated net sales decline of 8.9% to $431.8 million in Q2 FY26, with GAAP diluted loss per share at $13.44 | Metric | Q2 FY26 (Millions) | Q2 FY25 (Millions) | Change (%) | | :-------------------------------- | :----------------- | :----------------- | :--------- | | Consolidated Net Sales Revenue | $431.8 | $474.2 | -8.9% | | Gross Profit Margin | 44.2% | 45.6% | -1.4 pp | | Operating Margin (GAAP) | (73.1)% | 7.3% | -80.4 pp | | Adjusted Operating Margin (Non-GAAP) | 6.2% | 9.8% | -3.6 pp | | GAAP Diluted EPS | ($13.44) | $0.74 | -1916.2% | | Non-GAAP Adjusted Diluted EPS | $0.59 | $1.21 | -51.2% | | Net Cash Used by Operating Activities | ($10.5) | $44.6 (Provided) | -123.5% | | Non-GAAP Adjusted EBITDA Margin | 8.4% | 11.8% | -3.4 pp | [Consolidated Financial Performance (Q2 FY26 vs Q2 FY25)](index=2&type=section&id=Consolidated%20Financial%20Performance%20(Q2%20FY26%20vs%20Q2%20FY25)) [Net Sales Revenue](index=2&type=section&id=Net%20Sales%20Revenue) Consolidated net sales revenue decreased by 8.9% to $431.8 million, driven by a 16.0% organic business decline, partially offset by the Olive & June acquisition | Metric | Q2 FY26 (Millions) | Q2 FY25 (Millions) | Change ($ Millions) | Change (%) | | :----------------------- | :----------------- | :----------------- | :------------------ | :--------- | | Consolidated Net Sales | $431.8 | $474.2 | ($42.4) | -8.9% | | Organic Business Decline | ($76.1) | N/A | N/A | -16.0% | | Olive & June Acquisition | $33.4 | N/A | N/A | +7.0% | - Organic business decline was due to lower sales of thermometers, heaters, hair appliances in Beauty & Wellness, and decreased insulated beverageware and home categories in Home & Outdoor[7](index=7&type=chunk) [Gross Profit and SG&A](index=2&type=section&id=Gross%20Profit%20and%20SG%26A) Consolidated gross profit margin decreased by 140 basis points to 44.2%, while the SG&A ratio increased by 310 basis points to 41.0% | Metric | Q2 FY26 | Q2 FY25 | Change (bps) | | :-------------------------------- | :------ | :------ | :----------- | | Consolidated Gross Profit Margin | 44.2% | 45.6% | -140 | | Consolidated SG&A Ratio | 41.0% | 37.9% | +310 | - Gross profit margin was negatively impacted by approximately **200 basis points** due to higher tariffs on cost of goods sold[7](index=7&type=chunk) - SG&A ratio increase was partially offset by favorable comparative impact of higher distribution center expense in the prior year due to automation startup issues[7](index=7&type=chunk) [Operating Income/Loss and Asset Impairment](index=2&type=section&id=Operating%20Income%2FLoss%20and%20Asset%20Impairment) The company recognized significant non-cash asset impairment charges of $326.4 million, leading to a consolidated operating loss of $315.7 million | Metric | Q2 FY26 (Millions) | Q2 FY25 (Millions) | Change ($ Millions) | | :-------------------------- | :----------------- | :----------------- | :------------------ | | Asset Impairment Charges | $326.4 | — | +$326.4 | | Consolidated Operating (Loss) Income | ($315.7) | $34.9 | ($350.6) | - The impairment charges reduced goodwill by **$292.6 million** and other intangible assets by **$33.8 million**, impacting both Beauty & Wellness and Home & Outdoor segments[7](index=7&type=chunk) [Interest Expense and Income Tax](index=3&type=section&id=Interest%20Expense%20and%20Income%20Tax) Interest expense increased to $14.2 million, primarily due to higher average borrowings, while the income tax benefit was 6.4% of loss before tax | Metric | Q2 FY26 (Millions) | Q2 FY25 (Millions) | Change ($ Millions) | | :-------------------------------- | :----------------- | :----------------- | :------------------ | | Interest Expense | $14.2 | $13.2 | +$1.0 | | Income Tax (Benefit) Expense (% of pre-tax) | (6.4)% | 22.0% | -28.4 pp | - Higher average borrowings were used to fund the Olive & June acquisition, increased inventory due to forward buys in advance of tariffs, and higher tariff costs[8](index=8&type=chunk) [Net Income/Loss and Diluted EPS](index=3&type=section&id=Net%20Income%2FLoss%20and%20Diluted%20EPS) The company reported a net loss of $308.6 million, or diluted loss per share of $13.44, primarily due to asset impairment charges | Metric | Q2 FY26 (Millions) | Q2 FY25 (Millions) | Change ($ Millions) | | :------------------- | :----------------- | :----------------- | :------------------ | | Net (Loss) Income | ($308.6) | $17.0 | ($325.6) | | Diluted (Loss) EPS | ($13.44) | $0.74 | ($14.18) | - The decrease in net income and diluted EPS was primarily driven by the **$294.0 million** after-tax asset impairment charge and lower operating income[8](index=8&type=chunk) [Non-GAAP Adjusted Financial Measures](index=3&type=section&id=Non-GAAP%20Adjusted%20Financial%20Measures) Adjusted operating income decreased by 41.9% to $26.9 million, and adjusted diluted EPS decreased by 51.2% to $0.59 | Metric | Q2 FY26 (Millions) | Q2 FY25 (Millions) | Change ($ Millions) | Change (%) | | :-------------------------- | :----------------- | :----------------- | :------------------ | :--------- | | Adjusted Operating Income | $26.9 | $46.4 | ($19.5) | -41.9% | | Adjusted Operating Margin | 6.2% | 9.8% | -3.6 pp | N/A | | Adjusted EBITDA | $36.2 | $55.8 | ($19.6) | -35.1% | | Adjusted EBITDA Margin | 8.4% | 11.8% | -3.4 pp | N/A | | Adjusted Income | $13.5 | $27.5 | ($14.0) | -50.8% | | Adjusted Diluted EPS | $0.59 | $1.21 | ($0.62) | -51.2% | - The decrease in adjusted operating margin was primarily driven by higher tariffs on cost of goods sold (approx **200 basis points** impact), increased retail trade/promotional expense, higher outbound freight costs, and unfavorable operating leverage[8](index=8&type=chunk) [Segment Performance (Q2 FY26 vs Q2 FY25)](index=4&type=section&id=Segment%20Performance%20(Q2%20FY26%20vs%20Q2%20FY25)) [Home & Outdoor Segment](index=4&type=section&id=Home%20%26%20Outdoor%20Segment) Home & Outdoor net sales revenue decreased by 13.7% to $208.7 million, resulting in an operating loss of $72.6 million due to asset impairment charges | Metric | Q2 FY26 (Millions) | Q2 FY25 (Millions) | Change ($ Millions) | Change (%) | | :-------------------------- | :----------------- | :----------------- | :------------------ | :--------- | | Net Sales Revenue | $208.7 | $241.9 | ($33.2) | -13.7% | | Operating (Loss) Income (GAAP) | ($72.6) | $31.2 | ($103.8) | -332.7% | | Asset Impairment Charges | $85.5 | — | +$85.5 | N/A | | Adjusted Operating Income (Non-GAAP) | $20.1 | $36.3 | ($16.2) | -44.6% | - Key drivers for sales decline include retailer inventory rebalancing, competition, distribution loss, and cancellation of direct import orders due to higher tariffs[12](index=12&type=chunk) - The **670 basis point** decrease in segment operating margin (excluding impairment) was primarily due to higher tariffs, increased retail trade/promotional expense, share-based compensation, outbound freight, and unfavorable operating leverage[10](index=10&type=chunk)[13](index=13&type=chunk) [Beauty & Wellness Segment](index=4&type=section&id=Beauty%20%26%20Wellness%20Segment) Beauty & Wellness net sales revenue decreased by 4.0% to $223.1 million, driven by an 18.2% organic decline, partially offset by the Olive & June acquisition | Metric | Q2 FY26 (Millions) | Q2 FY25 (Millions) | Change ($ Millions) | Change (%) | | :-------------------------- | :----------------- | :----------------- | :------------------ | :--------- | | Net Sales Revenue | $223.1 | $232.3 | ($9.2) | -4.0% | | Organic Business Decline | ($42.3) | N/A | N/A | -18.2% | | Olive & June Acquisition | $33.4 | N/A | N/A | +14.4% | | Operating (Loss) Income (GAAP) | ($243.1) | $3.7 | ($246.8) | -6670.3% | | Asset Impairment Charges | $240.9 | — | +$240.9 | N/A | | Adjusted Operating Income (Non-GAAP) | $6.9 | $10.2 | ($3.3) | -32.4% | - Organic decline in thermometry was due to evolving China market dynamics, heightened competition from domestic sellers, and weaker illness season[14](index=14&type=chunk) - The **260 basis point** decrease in segment operating margin (excluding impairment) was primarily due to higher tariffs, increased retail trade/promotional expense, share-based compensation, outbound freight, increased marketing, and unfavorable operating leverage[15](index=15&type=chunk)[18](index=18&type=chunk) [Balance Sheet and Cash Flow](index=5&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) [Key Balance Sheet Items](index=5&type=section&id=Key%20Balance%20Sheet%20Items) As of August 31, 2025, cash and cash equivalents increased to $22.4 million, while total debt significantly rose to $893.2 million | Metric | August 31, 2025 (Millions) | August 31, 2024 (Millions) | Change ($ Millions) | | :---------------------- | :------------------------- | :------------------------- | :------------------ | | Cash and cash equivalents | $22.4 | $20.1 | +$2.3 | | Accounts receivable turnover | 72.2 days | 69.0 days | +3.2 days | | Inventory | $528.9 | $469.6 | +$59.3 | | Total short- and long-term debt | $893.2 | $713.2 | +$180.0 | [Cash Flow from Operations and Free Cash Flow](index=5&type=section&id=Cash%20Flow%20from%20Operations%20and%20Free%20Cash%20Flow) Net cash provided by operating activities for the first six months of FY26 decreased to $47.9 million, and free cash flow declined to $23.0 million | Metric (Six Months Ended August 31) | FY26 (Millions) | FY25 (Millions) | Change ($ Millions) | | :---------------------------------- | :-------------- | :-------------- | :------------------ | | Net cash provided by operating activities | $47.9 | $69.9 | ($22.0) | | Free cash flow | $23.0 | $55.9 | ($32.9) | [Fiscal 2026 Outlook](index=5&type=section&id=Fiscal%202026%20Outlook) [Tariff Impact and Mitigation](index=5&type=section&id=Tariff%20Impact%20and%20Mitigation) Helen of Troy is assessing tariff exposure and implementing mitigation plans, aiming to reduce net tariff impact on operating income to less than $20 million - Company expects to reduce cost of goods sold exposed to China tariffs to between **25% and 30%** by the end of fiscal 2026, compared to the prior expectation of less than **25%**[17](index=17&type=chunk) - Initiated significant efforts to diversify production outside of China into regions with lower tariffs or overall costs, and to source the same product in more than one region[17](index=17&type=chunk) - Company now believes it can reduce the net tariff impact on operating income to less than **$20 million**, compared to the prior expectation of less than **$15 million**[20](index=20&type=chunk) [Cost Reduction Initiatives](index=6&type=section&id=Cost%20Reduction%20Initiatives) The company continues to implement cost reduction and cash flow preservation measures, including suspending non-critical projects and optimizing working capital - Suspension of non-critical projects and capital expenditures - Actions to reduce overall personnel costs and pause most project and travel expenses - Resumption of optimized marketing, promotional, and new product development investments focused on highest returns - Actions to optimize working capital and balance sheet productivity[20](index=20&type=chunk)[22](index=22&type=chunk) [Consolidated Net Sales Outlook](index=6&type=section&id=Consolidated%20Net%20Sales%20Outlook) For full-year fiscal 2026, Helen of Troy expects consolidated net sales revenue between $1.739 billion and $1.780 billion, implying an 8.8% to 6.7% decline | Period | Outlook Range (Millions) | Implied Decline (YoY) | | :-------------------- | :----------------------- | :-------------------- | | Full Year Fiscal 2026 | $1,739 - $1,780 | 8.8% - 6.7% | | Third Quarter Fiscal 2026 | $491 - $512 | 7.5% - 3.5% | - The sales outlook reflects continued consumer spending softness, increased macro uncertainty, a more promotional environment, and a stretched consumer[21](index=21&type=chunk) [Segment Net Sales Outlook](index=6&type=section&id=Segment%20Net%20Sales%20Outlook) For fiscal 2026, Home & Outdoor net sales are expected to decline by 11.8% to 9.7%, while Beauty & Wellness net sales are projected to decline by 6.2% to 4.0% | Segment | Full Year FY26 Net Sales Decline (YoY) | Q3 FY26 Net Sales Decline/Growth (YoY) | | :---------------- | :------------------------------------- | :------------------------------------- | | Home & Outdoor | 11.8% - 9.7% | 12.8% - 8.7% | | Beauty & Wellness | 6.2% - 4.0% (incl. $109M-$112M from Olive & June) | 2.9% decline - 1.0% growth (incl. $36M-$39M from Olive & June) | [GAAP and Adjusted Diluted EPS Outlook](index=7&type=section&id=GAAP%20and%20Adjusted%20Diluted%20EPS%20Outlook) The company forecasts full-year fiscal 2026 GAAP diluted loss per share of $29.90 to $29.40 and non-GAAP adjusted diluted EPS in the range of $3.75 to $4.25 | Metric | Full Year FY26 Outlook | Q3 FY26 Outlook | | :-------------------------- | :--------------------- | :-------------- | | GAAP Diluted (Loss) EPS | ($29.90) - ($29.40) | $1.85 - $2.05 | | Adjusted Diluted EPS (Non-GAAP) | $3.75 - $4.25 | $1.55 - $1.80 | | Implied Adjusted EPS Decline (YoY) | 47.7% - 40.7% | 41.9% - 32.6% | - Adjusted diluted EPS outlook reflects pressures from a more promotional environment, consumer trade-down, unfavorable product mix, higher commodity/product costs (offset by Project Pegasus and price increases), growth investments, and unfavorable operating leverage[28](index=28&type=chunk) [Key Assumptions for Outlook](index=7&type=section&id=Key%20Assumptions%20for%20Outlook) The outlook assumes an average cough, cold, and flu season, continued softer consumer demand, increased competition, and conservative retailer inventory management - Average cough, cold, and flu season - Continued softer consumer demand and increased competition - Consumer trade-down behavior, reflected in heightened deal-seeking and emphasis on essential categories - Conservative retailer inventory management in response to demand trends[27](index=27&type=chunk) - September 2025 foreign currency exchange rates will remain constant - Full year fiscal 2026 expected interest expense in the range of **$56 million to $57 million** - Third quarter fiscal 2026 reported GAAP effective tax rate range of **(10.0)% to (16.0)%** and adjusted effective tax rate range of **22.0% to 25.0%** - Fiscal 2026 reported GAAP effective tax rate range of **(0.8)% to (0.6)%** and adjusted effective tax rate range of **15.0% to 16.0%** - Full year fiscal 2026 estimated weighted average diluted shares outstanding of **23.0 million**[28](index=28&type=chunk) [Debt Covenants](index=7&type=section&id=Debt%20Covenants) As of August 31, 2025, Helen of Troy was in compliance with all credit agreement covenants, but expects to seek an amendment during Q3 FY26 - Company was in compliance with all credit agreement covenants as of **August 31, 2025**[26](index=26&type=chunk) - Company expects to proactively seek an amendment during Q3 FY26 to extend temporary adjustments to the maximum leverage ratio and reduce the minimum interest coverage ratio[26](index=26&type=chunk) - Preliminary indications are that lenders will be supportive of the potential amendment, but there is no assurance of success[26](index=26&type=chunk) [Additional Company Information](index=8&type=section&id=Additional%20Company%20Information) [Conference Call and Webcast](index=8&type=section&id=Conference%20Call%20and%20Webcast) Helen of Troy Limited will host a teleconference and webcast on October 9, 2025, at 9:00 a.m Eastern Time to discuss its earnings results - Teleconference and webcast scheduled for **October 9, 2025**, at **9:00 a.m Eastern Time**[30](index=30&type=chunk) - Replay available via telephone until **October 23, 2025**, and webcast replay available on the website for one year[30](index=30&type=chunk) [Non-GAAP Financial Measures Disclosure](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20Disclosure) The company uses non-GAAP financial measures to supplement GAAP results, providing useful information for management and investors regarding financial trends - Non-GAAP financial measures are used to supplement GAAP results and provide additional perspective on financial and business trends[31](index=31&type=chunk) - These measures are not GAAP alternatives and may differ from those of other companies; undue reliance should not be placed on them[31](index=31&type=chunk) [About Helen of Troy Limited](index=9&type=section&id=About%20Helen%20of%20Troy%20Limited) Helen of Troy Limited is a global consumer products company known for designing, developing, and marketing branded home, outdoor, beauty, and wellness products - Helen of Troy Limited is a leading global consumer products company[32](index=32&type=chunk) - Portfolio includes well-known brands like OXO, Hydro Flask, Osprey, Vicks, Braun, Honeywell, PUR, Hot Tools, Drybar, Curlsmith, Revlon, and Olive & June[32](index=32&type=chunk) [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) The press release contains forward-looking statements subject to various risks beyond the company's control, including geographic concentration and cybersecurity incidents - Forward-looking statements are subject to risks, many beyond the company's control, that could cause actual results to differ materially[33](index=33&type=chunk) - Risks include geographic concentration of distribution facilities, cyber incidents, ability to introduce new products, dependence on large customers and third-party manufacturers (mostly in Asia) - Other risks involve trade barriers, economic downturns, public health crises, reliance on key officers, licensed trademarks, and the ability to execute strategic initiatives like acquisitions and restructuring plans - Risks also include significant tariffs on imports from China, Mexico or Vietnam, changes in laws and regulations (environmental, employment, tax), and global legal developments regarding privacy and data security[33](index=33&type=chunk)[34](index=34&type=chunk) [Investor Contact](index=10&type=section&id=Investor%20Contact) Contact information for investor relations is provided for Helen of Troy Limited and ICR, Inc - Investor contact information is provided for Helen of Troy Limited (Anne Rakunas) and ICR, Inc (Allison Malkin)[35](index=35&type=chunk) [Detailed Financial Tables and Reconciliations](index=11&type=section&id=Detailed%20Financial%20Tables%20and%20Reconciliations) [Condensed Consolidated Statements of Income](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This section presents the unaudited condensed consolidated statements of income for the three and six months ended August 31, 2025, and 2024 **Three Months Ended August 31:** | Metric (in thousands) | 2025 | % of Sales | 2024 | % of Sales | | :-------------------- | :---------- | :--------- | :---------- | :--------- | | Sales revenue, net | $431,781 | 100.0% | $474,221 | 100.0% | | Cost of goods sold | $241,100 | 55.8% | $258,151 | 54.4% | | Gross profit | $190,681 | 44.2% | $216,070 | 45.6% | | SG&A | $176,999 | 41.0% | $179,692 | 37.9% | | Asset impairment charges | $326,394 | 75.6% | — | —% | | Restructuring charges | $3,005 | 0.7% | $1,526 | 0.3% | | Operating (loss) income | ($315,717) | (73.1)% | $34,852 | 7.3% | | Interest expense | $14,221 | 3.3% | $13,216 | 2.8% | | Net (loss) income | ($308,643) | (71.5)% | $17,014 | 3.6% | | Diluted (loss) earnings per share | ($13.44) | | $0.74 | | **Six Months Ended August 31:** | Metric (in thousands) | 2025 | % of Sales | 2024 | % of Sales | | :-------------------- | :---------- | :--------- | :---------- | :--------- | | Sales revenue, net | $803,436 | 100.0% | $891,068 | 100.0% | | Cost of goods sold | $437,744 | 54.5% | $471,919 | 53.0% | | Gross profit | $365,692 | 45.5% | $419,149 | 47.0% | | SG&A | $344,663 | 42.9% | $350,173 | 39.3% | | Asset impairment charges | $740,779 | 92.2% | — | —% | | Restructuring charges | $3,005 | 0.4% | $3,361 | 0.4% | | Operating (loss) income | ($722,755) | (90.0)% | $65,615 | 7.4% | | Interest expense | $28,029 | 3.5% | $25,759 | 2.9% | | Net (loss) income | ($759,361) | (94.5)% | $23,218 | 2.6% | | Diluted (loss) earnings per share | ($33.09) | | $1.00 | | [Consolidated Net Sales by Geographic Region](index=12&type=section&id=Consolidated%20Net%20Sales%20by%20Geographic%20Region) This table provides a breakdown of consolidated net sales revenue by geographic region (Domestic and International) for the three and six months ended August 31, 2025, and 2024 **Three Months Ended August 31:** | Region (in thousands) | 2025 | % of Total | 2024 | % of Total | | :-------------------- | :---------- | :--------- | :---------- | :--------- | | Domestic sales revenue, net | $330,496 | 76.5% | $365,750 | 77.1% | | International sales revenue, net | $101,285 | 23.5% | $108,471 | 22.9% | | Total sales revenue, net | $431,781 | 100.0% | $474,221 | 100.0% | **Six Months Ended August 31:** | Region (in thousands) | 2025 | % of Total | 2024 | % of Total | | :-------------------- | :---------- | :--------- | :---------- | :--------- | | Domestic sales revenue, net | $608,456 | 75.7% | $666,430 | 74.8% | | International sales revenue, net | $194,980 | 24.3% | $224,638 | 25.2% | | Total sales revenue, net | $803,436 | 100.0% | $891,068 | 100.0% | [Reconciliation of GAAP to Non-GAAP Operating Income/Margin](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Operating%20Income%2FMargin) This section provides a reconciliation of GAAP operating income/loss and operating margin to adjusted operating income and adjusted operating margin (non-GAAP) for both segments and consolidated totals **Three Months Ended August 31, 2025 (Total):** | Metric (in thousands) | Amount | % of Sales | | :-------------------- | :---------- | :--------- | | Operating loss, as reported (GAAP) | ($315,717) | (73.1)% | | Add: Asset impairment charges | $326,394 | 75.6% | | Add: Restructuring charges | $3,005 | 0.7% | | Add: Amortization of intangible assets | $3,885 | 0.9% | | Add: Non-cash share-based compensation | $9,372 | 2.2% | | Adjusted operating income (non-GAAP) | $26,939 | 6.2% | **Three Months Ended August 31, 2024 (Total):** | Metric (in thousands) | Amount | % of Sales | | :-------------------- | :---------- | :--------- | | Operating income, as reported (GAAP) | $34,852 | 7.3% | | Add: Restructuring charges | $1,526 | 0.3% | | Add: Amortization of intangible assets | $4,539 | 1.0% | | Add: Non-cash share-based compensation | $5,487 | 1.2% | | Adjusted operating income (non-GAAP) | $46,404 | 9.8% | **Six Months Ended August 31, 2025 (Total):** | Metric (in thousands) | Amount | % of Sales | | :-------------------- | :---------- | :--------- | | Operating loss, as reported (GAAP) | ($722,755) | (90.0)% | | Add: Asset impairment charges | $740,779 | 92.2% | | Add: CEO succession costs | $3,484 | 0.4% | | Add: Restructuring charges | $3,005 | 0.4% | | Add: Amortization of intangible assets | $8,874 | 1.1% | | Add: Non-cash share-based compensation | $9,668 | 1.2% | | Adjusted operating income (non-GAAP) | $43,055 | 5.4% | **Six Months Ended August 31, 2024 (Total):** | Metric (in thousands) | Amount | % of Sales | | :-------------------- | :---------- | :--------- | | Operating income, as reported (GAAP) | $65,615 | 7.4% | | Add: Restructuring charges | $3,361 | 0.4% | | Add: Amortization of intangible assets | $9,059 | 1.0% | | Add: Non-cash share-based compensation | $11,320 | 1.3% | | Adjusted operating income (non-GAAP) | $89,355 | 10.0% | [Reconciliation of GAAP Operating Income to EBITDA and Adjusted EBITDA](index=14&type=section&id=Reconciliation%20of%20GAAP%20Operating%20Income%20to%20EBITDA%20and%20Adjusted%20EBITDA) This table reconciles GAAP operating income/loss to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the three and six months ended August 31, 2025, and 2024 **Three Months Ended August 31, 2025 (Total):** | Metric (in thousands) | Amount | % of Sales | | :-------------------- | :---------- | :--------- | | Operating loss, as reported (GAAP) | ($315,717) | (73.1)% | | Add: Depreciation and amortization | $12,860 | 3.0% | | EBITDA (non-GAAP) | ($302,608) | (70.1)% | | Add: Asset impairment charges | $326,394 | 75.6% | | Add: Restructuring charges | $3,005 | 0.7% | | Add: Non-cash share-based compensation | $9,372 | 2.2% | | Adjusted EBITDA (non-GAAP) | $36,163 | 8.4% | **Three Months Ended August 31, 2024 (Total):** | Metric (in thousands) | Amount | % of Sales | | :-------------------- | :---------- | :--------- | | Operating income, as reported (GAAP) | $34,852 | 7.3% | | Add: Depreciation and amortization | $13,792 | 2.9% | | EBITDA (non-GAAP) | $48,814 | 10.3% | | Add: Restructuring charges | $1,526 | 0.3% | | Add: Non-cash share-based compensation | $5,487 | 1.2% | | Adjusted EBITDA (non-GAAP) | $55,827 | 11.8% | **Six Months Ended August 31, 2025 (Total):** | Metric (in thousands) | Amount | % of Sales | | :-------------------- | :---------- | :--------- | | Operating loss, as reported (GAAP) | ($722,755) | (90.0)% | | Add: Depreciation and amortization | $26,944 | 3.4% | | EBITDA (non-GAAP) | ($695,254) | (86.5)% | | Add: Asset impairment charges | $740,779 | 92.2% | | Add: CEO succession costs | $3,484 | 0.4% | | Add: Restructuring charges | $3,005 | 0.4% | | Add: Non-cash share-based compensation | $9,668 | 1.2% | | Adjusted EBITDA (non-GAAP) | $61,682 | 7.7% | **Six Months Ended August 31, 2024 (Total):** | Metric (in thousands) | Amount | % of Sales | | :-------------------- | :---------- | :--------- | | Operating income, as reported (GAAP) | $65,615 | 7.4% | | Add: Depreciation and amortization | $27,628 | 3.1% | | EBITDA (non-GAAP) | $93,513 | 10.5% | | Add: Restructuring charges | $3,361 | 0.4% | | Add: Non-cash share-based compensation | $11,320 | 1.3% | | Adjusted EBITDA (non-GAAP) | $108,194 | 12.1% | [Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA](index=15&type=section&id=Reconciliation%20of%20GAAP%20Net%20Income%20to%20EBITDA%20and%20Adjusted%20EBITDA) This table reconciles GAAP net income/loss to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the three and six months ended August 31, 2025, and 2024, and for the trailing twelve months ended August 31, 2025 **Three Months Ended August 31:** | Metric (in thousands) | 2025 | % of Sales | 2024 | % of Sales | | :-------------------- | :---------- | :--------- | :---------- | :--------- | | Net (loss) income, as reported (GAAP) | ($308,643) | (71.5)% | $17,014 | 3.6% | | Add: Interest expense | $14,221 | 3.3% | $13,216 | 2.8% | | Add: Income tax (benefit) expense | ($21,046) | (4.9)% | $4,792 | 1.0% | | Add: Depreciation and amortization | $12,860 | 3.0% | $13,792 | 2.9% | | EBITDA (non-GAAP) | ($302,608) | (70.1)% | $48,814 | 10.3% | | Add: Asset impairment charges | $326,394 | 75.6% | — | —% | | Add: Restructuring charges | $3,005 | 0.7% | $1,526 | 0.3% | | Add: Non-cash share-based compensation | $9,372 | 2.2% | $5,487 | 1.2% | | Adjusted EBITDA (non-GAAP) | $36,163 | 8.4% | $55,827 | 11.8% | **Six Months Ended August 31:** | Metric (in thousands) | 2025 | % of Sales | 2024 | % of Sales | | :-------------------- | :---------- | :--------- | :---------- | :--------- | | Net (loss) income, as reported (GAAP) | ($759,361) | (94.5)% | $23,218 | 2.6% | | Add: Interest expense | $28,029 | 3.5% | $25,759 | 2.9% | | Add: Income tax expense | $9,134 | 1.1% | $16,908 | 1.9% | | Add: Depreciation and amortization | $26,944 | 3.4% | $27,628 | 3.1% | | EBITDA (non-GAAP) | ($695,254) | (86.5)% | $93,513 | 10.5% | | Add: Asset impairment charges | $740,779 | 92.2% | — | —% | | Add: CEO succession costs | $3,484 | 0.4% | — | —% | | Add: Restructuring charges | $3,005 | 0.4% | $3,361 | 0.4% | | Add: Non-cash share-based compensation | $9,668 | 1.2% | $11,320 | 1.3% | | Adjusted EBITDA (non-GAAP) | $61,682 | 7.7% | $108,194 | 12.1% | **Twelve Months Ended August 31, 2025:** | Metric (in thousands) | Amount | | :-------------------- | :---------- | | Net income (loss), as reported (GAAP) | ($658,828) | | Add: Interest expense | $54,192 | | Add: Income tax expense (benefit) | ($39,861) | | Add: Depreciation and amortization | $54,364 | | EBITDA (non-GAAP) | ($590,133) | | Add: Acquisition-related expenses | $3,035 | | Add: Asset impairment charges | $792,234 | | Add: CEO succession costs | $3,484 | | Add: Restructuring charges | $14,466 | | Add: Non-cash share-based compensation | $19,724 | | Adjusted EBITDA (non-GAAP) | $242,810 | [Reconciliation of GAAP Income/EPS to Adjusted Income/EPS](index=16&type=section&id=Reconciliation%20of%20GAAP%20Income%2FEPS%20to%20Adjusted%20Income%2FEPS) This section provides a detailed reconciliation of GAAP (loss) income and diluted (loss) earnings per share to adjusted income and adjusted diluted earnings per share (non-GAAP) for the three and six months ended August 31, 2025, and 2024 **Three Months Ended August 31, 2025:** | Metric | (Loss) Income Before Tax (Thousands) | Tax (Thousands) | Net of Tax (Thousands) | Diluted (Loss) EPS | | :-------------------------------- | :--------------------------------- | :-------------- | :--------------------- | :----------------- | | As reported (GAAP) | ($329,689) | ($21,046) | ($308,643) | ($13.44) | | Add: Asset impairment charges | $326,394 | $32,419 | $293,975 | $12.77 | | Add: Intangible asset reorganization | — | ($13,485) | $13,485 | $0.59 | | Add: Restructuring charges | $3,005 | $421 | $2,584 | $0.11 | | Add: Amortization of intangible assets | $3,885 | $669 | $3,216 | $0.14 | | Add: Non-cash share-based compensation | $9,372 | $445 | $8,927 | $0.39 | | Adjusted (non-GAAP) | $12,967 | ($577) | $13,544 | $0.59 | **Three Months Ended August 31, 2024:** | Metric | Income Before Tax (Thousands) | Tax (Thousands) | Net of Tax (Thousands) | Diluted Earnings Per Share | | :-------------------------------- | :---------------------------- | :-------------- | :--------------------- | :------------------------- | | As reported (GAAP) | $21,806 | $4,792 | $17,014 | $0.74 | | Add: Restructuring charges | $1,526 | $138 | $1,388 | $0.06 | | Add: Amortization of intangible assets | $4,539 | $661 | $3,878 | $0.17 | | Add: Non-cash share-based compensation | $5,487 | $221 | $5,266 | $0.23 | | Adjusted (non-GAAP) | $33,358 | $5,812 | $27,546 | $1.21 | **Six Months Ended August 31, 2025:** | Metric | (Loss) Income Before Tax (Thousands) | Tax (Thousands) | Net of Tax (Thousands) | Diluted (Loss) EPS | | :-------------------------------- | :--------------------------------- | :-------------- | :--------------------- | :----------------- | | As reported (GAAP) | ($750,227) | $9,134 | ($759,361) | ($33.09) | | Add: Asset impairment charges | $740,779 | $10,650 | $730,129 | $31.76 | | Add: CEO succession costs | $3,484 | $153 | $3,331 | $0.14 | | Add: Intangible asset reorganization | — | ($29,959) | $29,959 | $1.30 | | Add: Restructuring charges | $3,005 | $421 | $2,584 | $0.11 | | Add: Amortization of intangible assets | $8,874 | $1,551 | $7,323 | $0.32 | | Add: Non-cash share-based compensation | $9,668 | $602 | $9,066 | $0.39 | | Adjusted (non-GAAP) | $15,583 | ($7,448) | $23,031 | $1.00 | **Six Months Ended August 31, 2024:** | Metric | Income Before Tax (Thousands) | Tax (Thousands) | Net of Tax (Thousands) | Diluted Earnings Per Share | | :-------------------------------- | :---------------------------- | :-------------- | :--------------------- | :------------------------- | | As reported (GAAP) | $40,126 | $16,908 | $23,218 | $1.00 | | Add: Barbados tax reform | — | ($6,045) | $6,045 | $0.26 | | Add: Restructuring charges | $3,361 | $303 | $3,058 | $0.13 | | Add: Amortization of intangible assets | $9,059 | $1,322 | $7,737 | $0.33 | | Add: Non-cash share-based compensation | $11,320 | $485 | $10,835 | $0.47 | | Adjusted (non-GAAP) | $63,866 | $12,973 | $50,893 | $2.19 | [Selected Consolidated Balance Sheet and Cash Flow Information](index=18&type=section&id=Selected%20Consolidated%20Balance%20Sheet%20and%20Cash%20Flow%20Information) This section provides selected unaudited consolidated balance sheet data as of August 31, 2025, and 2024, and cash flow information for the six months ended August 31, 2025, and 2024 **Balance Sheet (in thousands):** | Metric | August 31, 2025 | August 31, 2024 | | :-------------------- | :-------------- | :-------------- | | Cash and cash equivalents | $22,370 | $20,137 | | Receivables, net | $350,231 | $365,675 | | Inventory | $528,893 | $469,625 | | Total assets, current | $938,129 | $900,635 | | Total assets | $2,407,554 | $2,880,377 | | Total liabilities, current | $549,952 | $508,696 | | Total long-term liabilities | $931,320 | $804,101 | | Total debt | $893,220 | $713,235 | | Stockholders' equity | $926,282 | $1,567,580 | **Cash Flow (Six Months Ended August 31, in thousands):** | Metric | 2025 | 2024 | | :-------------------- | :---------- | :---------- | | Depreciation and amortization | $26,944 | $27,628 | | Net cash provided by operating activities | $47,868 | $69,916 | | Capital and intangible asset expenditures | $24,832 | $14,026 | | Net debt (repayments) proceeds | ($23,231) | $46,925 | | Payments for repurchases of common stock | $1,482 | $103,144 | [Reconciliation of GAAP Net Cash Provided by Operating Activities to Free Cash Flow](index=18&type=section&id=Reconciliation%20of%20GAAP%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow) This table reconciles GAAP net cash provided by operating activities to free cash flow (non-GAAP) for the six months ended August 31, 2025, and 2024 **Six Months Ended August 31 (in thousands):** | Metric | 2025 | 2024 | | :-------------------- | :---------- | :---------- | | Net cash provided by operating activities (GAAP) | $47,868 | $69,916 | | Less: Capital and intangible asset expenditures | ($24,832) | ($14,026) | | Free cash flow (non-GAAP) | $23,036 | $55,890 | [Reconciliation of Net Leverage Ratio](index=18&type=section&id=Reconciliation%20of%20Net%20Leverage%20Ratio) This table presents the calculation of the Net Leverage Ratio (non-GAAP) for the twelve months ended August 31, 2025, showing the components of Adjusted EBITDA and net debt **Twelve Months Ended August 31, 2025 (in thousands):** | Metric | Amount | | :-------------------- | :---------- | | Adjusted EBITDA (non-GAAP) | $242,810 | | Pro forma effect of the Olive & June acquisition | $6,260 | | Adjusted EBITDA per the credit agreement | $249,070 | | Total borrowings under the credit agreement, as reported (GAAP) | $898,619 | | Add: Outstanding letters of credit | $9,460 | | Less: Unrestricted cash and cash equivalents | ($27,227) | | Net debt | $880,852 | | Net leverage ratio (non-GAAP) | 3.54 | [Third Quarter and Annual Fiscal 2026 Outlook for Net Sales Revenue and EPS Reconciliation](index=19&type=section&id=Third%20Quarter%20and%20Annual%20Fiscal%202026%20Outlook%20for%20Net%20Sales%20Revenue%20and%20EPS%20Reconciliation) This section provides the outlook for consolidated net sales revenue and EPS reconciliations for Q3 and full fiscal year 2026 **Third Quarter Fiscal 2026 Outlook:** | Metric | Range (Thousands) | | :-------------------- | :---------------- | | Net sales revenue | $491,000 - $512,000 | | Net sales revenue decline | (7.5)% - (3.5)% | **Annual Fiscal 2026 Outlook:** | Metric | Range (Thousands) | | :-------------------- | :---------------- | | Net sales revenue | $1,739,000 - $1,780,000 | | Net sales revenue decline | (8.8)% - (6.7)% | **Third Quarter Fiscal 2026 Outlook (EPS):** | Metric | Diluted EPS (GAAP) | Adjusted Diluted EPS (Non-GAAP) | | :-------------------- | :----------------- | :------------------------------ | | Range | $1.85 - $2.05 | $1.55 - $1.80 | | Effective Tax Rate | (16.0)% - (10.0)% | 25.0% - 22.0% | **Annual Fiscal 2026 Outlook (EPS):** | Metric | Diluted (Loss) EPS (GAAP) | Adjusted Diluted EPS (Non-GAAP) | | :-------------------- | :------------------------ | :------------------------------ | | Range | ($29.90) - ($29.40) | $3.75 - $4.25 | | Effective Tax Rate | (0.6)% - (0.8)% | 16.0% - 15.0% | [Notes to Press Release](index=20&type=section&id=Notes%20to%20Press%20Release) This section provides detailed notes explaining non-GAAP financial measures, organic business definitions, acquisition details, and other financial adjustments - Provides definitions and explanations for non-GAAP financial measures such as Adjusted Operating Income, Adjusted EBITDA, and Free Cash Flow[51](index=51&type=chunk) - Clarifies that 'Organic business' excludes the first twelve months from acquisition date and foreign currency impact, while 'Acquisition' refers to Olive & June sales[51](index=51&type=chunk) - Explains specific adjustments like asset impairment charges, intangible asset reorganization, CEO succession costs, and Barbados tax reform[51](index=51&type=chunk)

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Core Insights - Helen of Troy Limited reported consolidated net sales revenue of $431.8 million for the three-month period ended August 31, 2025, a decrease from $474.2 million in Fiscal 2025 [1] - The gross profit margin for the company was 44.2%, down from 45.6% in the previous fiscal year [1] - The operating margin was reported at (73.1)%, which includes pre-operating expenses [1]

Core Viewpoint - Helen of Troy Limited (NASDAQ:HELE) has experienced a significant decline in its stock's consensus price target over the past year, reflecting a more cautious sentiment among analysts regarding the company's performance [2][6]. Financial Performance - The company's first-quarter fiscal 2026 earnings were disappointing, reporting $0.41 per share, which fell short of the Zacks Consensus Estimate of $0.91 per share and marked a decline from $0.99 per share in the previous year [3][6]. - Consolidated net sales revenue for the company was $371.7 million, down from $416.8 million in the same period of the previous fiscal year, indicating a year-over-year decline [4][6]. Market Sentiment - The average price target for Helen of Troy has decreased from $49.25 a year ago to $27 last month, highlighting a bearish sentiment among analysts [2][6]. - Despite the challenges faced, D.A. Davidson has set a price target of $251 for the stock, suggesting some optimism in the market [4][6]. Strategic Initiatives - The company is actively working to reduce its exposure to China and remains cash flow positive, which may help mitigate some of the negative impacts on its performance [5]. - There has been notable insider buying activity, indicating confidence in the company's future prospects [5][6]. Upcoming Events - Investors are closely monitoring the company's strategic initiatives and are awaiting the announcement of its second-quarter earnings to assess its financial performance and future outlook [5].