[Q1 FY2026 Financial & Operational Highlights](index=1&type=section&id=Helen%20of%20Troy%20Limited%20Reports%20First%20Quarter%20Fiscal%202026%20Results) [Executive Summary](index=1&type=section&id=Executive%20Summary%20-%20First%20Quarter%20of%20Fiscal%202026%20Compared%20to%20Fiscal%202025) Helen of Troy reported a 10.8% sales decline and a significant GAAP loss per share due to impairment charges, alongside strategic operational focus Key Financial Metrics | Metric | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | **Consolidated Net Sales** | $371.7M | $416.8M | | **GAAP Diluted (Loss) EPS** | $(19.65) | $0.26 | | **Adjusted Diluted EPS** | $0.41 | $0.99 | | **Operating Margin (GAAP)** | (109.5)% | 7.4% | | **Adjusted Operating Margin** | 4.3% | 10.3% | | **Cash Flow from Operations** | $58.3M | $25.3M | - The Board's search for a new CEO is well underway, focusing on finding a leader with experience in diversified global organizations to bolster the company's brands[4](index=4&type=chunk) - The interim CEO has prioritized a 'back to fundamentals' approach, focusing on improving go-to-market effectiveness, simplifying operations, driving product innovation, and sharpening spending[4](index=4&type=chunk) - Tariff-related impacts were a major headwind, contributing approximately **8 percentage points** to the **10.8% consolidated revenue decline**[4](index=4&type=chunk) [Consolidated Financial Performance](index=2&type=section&id=Consolidated%20Results%20-%20First%20Quarter%20Fiscal%202026%20Compared%20to%20First%20Quarter%20Fiscal%202025) Consolidated net sales decreased 10.8% to $371.7 million, primarily impacted by a $414.4 million asset impairment charge leading to a GAAP operating loss - The company recognized a significant non-cash asset impairment charge of **$414.4 million**, impacting goodwill (**$317.0 million**) and other intangible assets (**$97.4 million**) across both segments[7](index=7&type=chunk)[8](index=8&type=chunk) - The **10.8% sales decrease** was driven by a **17.0% decline in Organic business**, partially offset by a **6.4% positive impact** from the Olive & June acquisition[7](index=7&type=chunk) - Gross profit margin fell to **47.1% from 48.7%**, primarily due to the comparative impact of favorable inventory obsolescence in the prior year, consumer trade-down, and higher retail trade expense[7](index=7&type=chunk) Consolidated Financial Summary | Metric | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | **Net Sales Revenue** | $371.7M | $416.8M | | **Gross Profit** | $175.0M | $203.1M | | **Operating (Loss) Income (GAAP)** | $(407.0)M | $30.8M | | **Net (Loss) Income (GAAP)** | $(450.7)M | $6.2M | | **Adjusted Operating Income** | $16.1M | $43.0M | [Segment Performance](index=4&type=section&id=Segment%20Results%20-%20First%20Quarter%20Fiscal%202026%20Compared%20to%20First%20Quarter%20Fiscal%202025) Both segments experienced sales declines and significant operating losses due to large impairment charges, with adjusted operating income substantially decreasing Segment Performance Overview | Segment | Net Sales (Q1 FY26) | YoY Change | Adjusted Operating Margin (Q1 FY26) | Adjusted Operating Margin (Q1 FY25) | | :--- | :--- | :--- | :--- | :--- | | **Home & Outdoor** | $178.0M | (10.3)% | 5.0% | 10.6% | | **Beauty & Wellness** | $193.7M | (11.3)% | 3.7% | 10.0% | [Home & Outdoor](index=4&type=section&id=Home%20%26%20Outdoor) Home & Outdoor net sales decreased 10.3% to $178.0 million, primarily due to softer demand and tariffs, leading to a $213.8 million operating loss from impairment - Key drivers for the sales decline included softer demand for home/beverageware, tariff-related order cancellations, retailer pull-forward activity in the prior quarter, and lower closeout sales[15](index=15&type=chunk) - The segment's operating loss of **$213.8 million** included a **$219.1 million pre-tax asset impairment charge**[11](index=11&type=chunk) Home & Outdoor Segment Financials | Metric | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | **Net Sales Revenue** | $178.0M | $198.5M | | **Operating (Loss) Income (GAAP)** | $(213.8)M | $15.9M | | **Adjusted Operating Income** | $8.9M | $21.1M | [Beauty & Wellness](index=4&type=section&id=Beauty%20%26%20Wellness) Beauty & Wellness net sales decreased 11.3% to $193.7 million, with organic decline offset by acquisition, leading to a $193.2 million operating loss from impairment - The organic business decline of **23.0%** was partially offset by a **12.3% contribution** from the Olive & June acquisition[13](index=13&type=chunk) - Organic sales fell due to a decline in international thermometry (China market dynamics), lower fan sales (reduced demand and tariff impact), and softer sales of hair appliances (competition and demand)[16](index=16&type=chunk) - The segment's operating loss of **$193.2 million** included a **$195.3 million pre-tax impairment charge**[14](index=14&type=chunk) Beauty & Wellness Segment Financials | Metric | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | **Net Sales Revenue** | $193.7M | $218.4M | | **Operating (Loss) Income (GAAP)** | $(193.2)M | $14.9M | | **Adjusted Operating Income** | $7.3M | $21.9M | [Financial Position and Cash Flow](index=5&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20-%20First%20Quarter%20Fiscal%202026%20Compared%20to%20First%20Quarter%20Fiscal%202025) Inventory and total debt increased, while net cash from operating activities more than doubled to $58.3 million, and free cash flow significantly improved Balance Sheet Summary | Balance Sheet Item | May 31, 2025 | May 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $22.7M | $16.1M | | **Inventory** | $484.1M | $444.7M | | **Total debt** | $871.0M | $748.4M | Cash Flow Summary | Cash Flow Item (3 months ended) | May 31, 2025 | May 31, 2024 | | :--- | :--- | :--- | | **Net cash from operating activities** | $58.3M | $25.3M | | **Free cash flow** | $45.0M | $16.2M | [Second Quarter Fiscal 2026 Outlook](index=5&type=section&id=Second%20Quarter%20Fiscal%202026%20Outlook) Q2 FY2026 outlook projects consolidated net sales of $408-432 million, reflecting continued consumer softness and tariff impacts, with mitigation efforts Q2 FY2026 Financial Outlook | Q2 FY2026 Outlook | Low End | High End | | :--- | :--- | :--- | | **Consolidated Net Sales** | $408M | $432M | | **YoY Sales Decline** | (14.0)% | (8.9)% | | **GAAP Diluted EPS** | $0.56 | $0.68 | | **Adjusted Diluted EPS** | $0.45 | $0.60 | - The company is actively mitigating tariff risks by diversifying production outside of China, aiming to reduce its cost of goods sold exposed to China tariffs to less than **25% by the end of fiscal 2026**[19](index=19&type=chunk) - The outlook reflects continued challenges, including consumer spending softness, a more promotional environment, retailer inventory rebalancing, and competitive pressure in China[22](index=22&type=chunk)[24](index=24&type=chunk) - Cost reduction measures remain in place, including suspension of non-critical projects, reduced personnel costs, and optimized marketing and inventory purchases[21](index=21&type=chunk) [Financial Statements and Reconciliations](index=10&type=section&id=Financial%20Statements%20and%20Reconciliations) This section provides detailed unaudited financial statements for Q1 FY2026, including income, balance sheet, cash flow, and GAAP to non-GAAP reconciliations [Condensed Consolidated Statements of Income](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(5)) The company reported a net loss of $450.7 million for the quarter, primarily due to a $414.4 million asset impairment charge Condensed Consolidated Statements of Income (in thousands) | (in thousands) | Three Months Ended May 31, 2025 | Three Months Ended May 31, 2024 | | :--- | :--- | :--- | | **Sales revenue, net** | $371,655 | $416,847 | | **Gross profit** | $175,011 | $203,079 | | **Asset impairment charges** | $414,385 | $— | | **Operating (loss) income** | $(407,038) | $30,763 | | **Net (loss) income** | $(450,718) | $6,204 | | **Diluted (loss) earnings per share** | $(19.65) | $0.26 | [Reconciliation of GAAP to Non-GAAP Operating Income](index=11&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures%20%E2%80%93%20GAAP%20Operating%20(Loss)%20Income%20and%20Operating%20Margin%20to%20Adjusted%20Operating%20Income%20and%20Adjusted%20Operating%20Margin%20(Non-GAAP)%20(1)) This section reconciles GAAP operating loss to adjusted operating income, showing a Q1 FY2026 adjusted operating income of $16.1 million after key adjustments Reconciliation of Operating Income (in thousands) | (in thousands) | Q1 FY2026 | | :--- | :--- | | **Operating loss, as reported (GAAP)** | $(407,038) | | Asset impairment charges | $414,385 | | CEO succession costs | $3,484 | | Amortization of intangible assets | $4,989 | | Non-cash share-based compensation | $296 | | **Adjusted operating income (non-GAAP)** | **$16,116** | [Reconciliation of GAAP Net Income to Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures%20%E2%80%93%20GAAP%20Net%20(Loss)%20Income%20to%20EBITDA%20(Earnings%20(Loss)%20Before%20Interest,%20Taxes,%20Depreciation%20and%20Amortization),%20Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Margin%20(Non-GAAP)%20(1)) Adjusted EBITDA for the quarter was $25.5 million, reconciled from a GAAP net loss of $450.7 million by adjusting for interest, taxes, D&A, and impairment charges Reconciliation of Net Income to Adjusted EBITDA (in thousands) | (in thousands) | Q1 FY2026 | | :--- | :--- | | **Net (loss) income, as reported (GAAP)** | $(450,718) | | Interest expense | $13,808 | | Income tax expense | $30,180 | | Depreciation and amortization | $14,084 | | **EBITDA (non-GAAP)** | **$(392,646)** | | Asset impairment charges | $414,385 | | CEO succession costs | $3,484 | | **Adjusted EBITDA (non-GAAP)** | **$25,519** | [Reconciliation of GAAP to Non-GAAP Net Income and EPS](index=13&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures%20%E2%80%93%20GAAP%20(Loss)%20Income%20and%20Diluted%20(Loss)%20Earnings%20Per%20Share%20to%20Adjusted%20Income%20and%20Adjusted%20Diluted%20Earnings%20Per%20Share%20(Non-GAAP)%20(1)) GAAP net loss of $450.7 million, or $(19.65) per share, was reconciled to an adjusted net income of $9.5 million, or $0.41 per share Reconciliation of Net Income and EPS (in thousands, except per share) | (in thousands, except per share) | Net of Tax | Per Share | | :--- | :--- | :--- | | **As reported (GAAP)** | $(450,718) | $(19.65) | | Asset impairment charges | $436,154 | $18.99 | | CEO succession costs | $3,331 | $0.15 | | Intangible asset reorganization | $16,474 | $0.72 | | Amortization of intangible assets | $4,107 | $0.18 | | **Adjusted (non-GAAP)** | **$9,487** | **$0.41** |

Core Viewpoint - Analysts expect Helen of Troy (HELE) to report quarterly earnings of $0.91 per share, reflecting an 8.1% year-over-year decline, with revenues projected at $399.33 million, down 4.2% from the previous year [1]. Earnings Estimates - Revisions to earnings estimates are crucial indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock performance [2]. - The consensus EPS estimate for the quarter has remained unchanged over the last 30 days, indicating analysts' reassessment of their initial estimates [1]. Key Metrics - Analysts predict 'Net sales- Beauty & Wellness' will reach $220.42 million, indicating a year-over-year increase of 0.9% [4]. - 'Net sales- Home & Outdoor' is expected to be $178.91 million, suggesting a decline of 9.9% year over year [4]. - The consensus estimate for 'Adjusted operating income (non-GAAP)- Beauty & Wellness' is $20.55 million, down from $21.88 million in the same quarter last year [4]. - 'Adjusted operating income (non-GAAP)- Home & Outdoor' is projected at $22.84 million, compared to $21.07 million reported in the same quarter last year [5]. Stock Performance - Shares of Helen of Troy have returned +16.9% over the past month, outperforming the Zacks S&P 500 composite's +5.2% change [5]. - Despite recent performance, HELE holds a Zacks Rank 5 (Strong Sell), indicating expectations of underperformance relative to the overall market in the near future [5].

Core Insights - Helen of Troy Limited (HELE) is expected to report a decline in both revenue and earnings for the first quarter of fiscal 2026, with revenues estimated at $399.3 million, reflecting a 4.2% decrease from the previous year [1][2] - The earnings per share (EPS) estimate remains unchanged at 91 cents, indicating an 8.1% decline compared to the same quarter last year [2] Economic Environment - The company is facing a challenging macroeconomic environment characterized by softening consumer demand, tighter retailer inventory levels, and persistent inflationary pressures [2][3] - Financially strained consumers are prioritizing essential items, leading to a decline in discretionary spending [2] Company Performance Challenges - Helen of Troy is experiencing rising selling, general and administrative (SG&A) expenses due to increased marketing investments [3] - The company anticipates a weaker-than-usual first quarter due to multiple headwinds, including conservative retailer ordering patterns and paused direct import shipments from China due to elevated tariff levels [4] - International revenues are expected to decline, particularly due to weaker sales in China amid ongoing trade tensions [4] Earnings Outlook - The current model does not predict an earnings beat for Helen of Troy, as it holds a Zacks Rank of 5 (Strong Sell) and an Earnings ESP of 0.00% [5]

Core Insights - Helen of Troy Limited (HELE) is experiencing a management shake-up and is facing challenges due to tariffs, with expected earnings decline of 15.6% in fiscal 2026 [1][7] Financial Performance - In the fourth quarter of fiscal 2025, Helen of Troy reported earnings of $2.33, missing the Zacks Consensus by a penny, which was $2.34 [2] - Sales for the same quarter fell by 0.7% year-over-year [2] Management Changes - The CEO, Noel Geoffroy, resigned on May 2, 2025, following the earnings report, and Brian Grass, the CFO, was appointed as interim CEO [8] Tariff Impact and Mitigation Strategies - Helen of Troy has significant exposure to tariffs and did not provide guidance for fiscal 2026, indicating a grim outlook [3][4] - The company aims to reduce its cost of goods sold exposed to China tariffs to less than 20% by the end of fiscal 2026 [5] - To mitigate tariff risks, the company is diversifying production outside of China and considering price increases to customers [4][5] Analyst Reactions - Analysts have cut fiscal 2026 earnings estimates, with the Zacks Consensus dropping from $7.76 to $6.05, reflecting a 15.6% decline from the previous fiscal year earnings of $7.17 [7] Stock Performance - Shares of Helen of Troy have decreased by 58.9% year-to-date and are trading at new 5-year lows [9] - The company has a forward price-to-earnings (P/E) ratio of 4.2, which raises concerns given the recent earnings estimate cuts [11]

Core Viewpoint - Helen of Troy's shares dropped 10.4% following the abrupt resignation of CEO Noel Geoffroy, raising concerns about underlying issues within the company [1][2][3] Company Leadership Changes - CEO Noel Geoffroy stepped down "effective immediately" after only one year in the role, which suggests a sudden decision that may indicate deeper problems [3] - CFO Brian Grass has been appointed as interim CEO while the board searches for a permanent successor, but this has not alleviated investor concerns [4] Financial Performance - Helen of Troy's stock has declined 58% year-to-date, despite slightly beating revenue expectations last quarter [5] - The company's adjusted (non-GAAP) EPS fell short of estimates, and overall revenue decreased by 0.7%, with organic revenue declining by 4.9% [5] - The acquisition of Olive & June increased the company's debt by $235 million, adding financial pressure in a potential recession [5] Market Conditions and Risks - The decline in stock price is largely attributed to the uncertainty surrounding tariffs, as the company manufactures products in China, Vietnam, and Mexico [8] - Investors are apprehensive due to the sudden CEO resignation and lack of a prepared successor, which contributes to the perception of risk despite a low valuation based on expected earnings [9]

Core Insights - Helen of Troy Limited (HELE) experienced a 12% decline in share price after reporting disappointing fourth-quarter fiscal 2025 results, with both top and bottom lines decreasing year over year and earnings missing the Zacks Consensus Estimate [1] Financial Performance - Adjusted earnings per share were $2.33, missing the Zacks Consensus Estimate of $2.34, and down 4.9% from $2.45 in the previous year, attributed to lower adjusted operating income and higher interest expenses [4] - Net sales reached $485.9 million, exceeding the Zacks Consensus Estimate of $480 million, but down 0.7% from $489.2 million year-over-year, primarily due to a 4.9% decline in Organic business sales [4] - The consolidated gross profit margin contracted by 40 basis points to 48.6%, influenced by a less favorable product mix and customer mix, partially offset by lower inventory obsolescence and reduced commodity costs [5] - The adjusted operating income fell 9.9% to $75 million, with the adjusted operating margin decreasing by 160 basis points to 15.4% [7] Segment Performance - In the Home & Outdoor segment, net sales declined 1.6% to $219.8 million, mainly due to decreased sales in insulated beverageware amid competitive pressure and weaker consumer demand [8] - The Beauty & Wellness segment saw a slight increase in net sales by 0.1% to $266.1 million, driven by the acquisition of Olive & June, although Organic business sales dropped by 8% [10] Strategic Outlook - The company is not providing a fiscal 2026 outlook due to global tariff policy changes and associated uncertainties, but is focusing on diversifying production outside of China to reduce tariff-related costs to under 20% by the end of fiscal 2026 [2] - Efforts are being made to preserve margins, reduce debt, and strengthen cash flow to navigate the dynamic environment [3] Financial Position - As of the end of fiscal 2025, the company had cash and cash equivalents of $18.9 million and total debt of $916.9 million, with net cash provided by operating activities at $113.2 million and free cash flow at $83.1 million [12]

Financial Data and Key Metrics Changes - Consolidated net sales decreased by 0.7%, which was at the higher end of the range implied in the full-year outlook despite an unfavorable foreign currency impact of 0.5% [61] - Consolidated gross profit margin decreased by 40 basis points to 48.6% primarily due to a less favorable product mix and customer mix [62] - GAAP operating margin for the quarter was 0.4% compared to 13.5% in the same period last year, primarily due to non-cash asset impairment charges of $51.5 million [63] - Non-GAAP adjusted EPS was $2.33, down from $2.45 in the same period last year, primarily due to lower adjusted operating income and higher interest expense [69] Business Line Data and Key Metrics Changes - Total sales in the Beauty & Wellness segment increased by 0.1%, driven by contributions from Olive & June, Honeywell, Vicks, and Braun [61] - Home & Outdoor saw an organic business decline of 1.2%, driven by Hydro Flask, partially offset by growth in Osprey and OXO [62] - Adjusted operating margin for Beauty & Wellness declined by 220 basis points to 13.4%, primarily due to incremental growth investments and a less favorable product mix [67] Market Data and Key Metrics Changes - International net sales grew by 5.3%, reflecting expanded distribution and greater collaboration between brand and sales teams [25] - The US weighted distribution increased by approximately 12% year-over-year, making brands more available to shoppers [25] - The competitive environment intensified, with retailers closely managing their inventory [21] Company Strategy and Development Direction - The company is focusing on diversifying its supply chain outside of China and has paused certain purchases from China to manage short-term demand [14][15] - The company aims to leverage its brands that resonate well during economic downturns, offering value to consumers [18] - Strategic choices include growing brands through consumer obsession, leveraging scale, and opportunistic M&A [50] Management's Comments on Operating Environment and Future Outlook - The management acknowledged significant uncertainty and disruption due to global trade policy changes, impacting consumer behavior [11] - The company is not providing fiscal '26 guidance due to the volatile environment and is assessing the incremental tariff impact [53] - Management expressed confidence in navigating the current environment, drawing on past experiences during the pandemic [54] Other Important Information - The company reported the largest year of Project Pegasus savings, contributing to a 60 basis point increase in gross margin [24] - The acquisition of Olive & June is expected to perform well in a cost-conscious environment [84] - The company ended the fourth quarter with total debt of $917 million, reflecting the acquisition of Olive & June [69] Q&A Session Summary Question: Can you talk about the diversification of your manufacturing base? - Management indicated a blend of existing and new suppliers for diversification efforts, with a larger percentage being existing suppliers [88][90] Question: What is the potential cost increase of new manufacturing locations? - Management stated that they are seeing the ability to be cost-neutral irrespective of tariffs, with additional costs mainly from the transition process [93] Question: What are the expected tariff impacts for the year? - Management estimated over $200 million of impact to fiscal year '26 based on current tariff rates [105] Question: Do you expect positive free cash flow for the full year? - Management confirmed that they expect positive free cash flow for the full year [107] Question: What are the expectations for Q1 sales dynamics? - Management anticipates softness in Q1 due to various factors, including retailer adjustments and direct import impacts [110]

Core Insights - Helen of Troy (HELE) reported revenue of $485.89 million for the quarter ended February 2025, reflecting a year-over-year decline of 0.7% and an EPS of $2.33 compared to $2.45 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $480.25 million by 1.17%, while the EPS fell short of the consensus estimate of $2.34 by 0.43% [1] Financial Performance - Net sales in the Beauty & Wellness segment reached $266.07 million, surpassing the average estimate of $251.19 million by three analysts, marking a year-over-year increase of 0.1% [4] - Net sales in the Home & Outdoor segment totaled $219.82 million, below the average estimate of $229.09 million, representing a year-over-year decline of 1.6% [4] - Adjusted operating income (non-GAAP) for Beauty & Wellness was $35.77 million, slightly below the two-analyst average estimate of $37.58 million [4] - Adjusted operating income (non-GAAP) for Home & Outdoor was $39.27 million, exceeding the two-analyst average estimate of $38.42 million [4] Stock Performance - Shares of Helen of Troy have declined by 33.7% over the past month, in contrast to the Zacks S&P 500 composite's decline of 5.1% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Helen of Troy (HELE) Q4 2025 Earnings Call April 24, 2025 09:00 AM ET Company Participants Sabrina McKee - Senior Vice President of Business Development and Investor RelationsNoel Geoffroy - CEOBrian Grass - Chief Financial OfficerBob Labick - President Conference Call Participants Rupesh Parikh - Senior Equity Research AnalystSusan Anderson - Managing Director & Senior AnalystPeter Grom - Equity Research Analyst Operator and welcome to the Helen of Troy Fourth Quarter Fiscal twenty twenty five Earnings Con ...

Helen of Troy (HELE) Q4 2025 Earnings Call April 24, 2025 09:00 AM ET Company Participants Sabrina McKee - Senior Vice President of Business Development and Investor RelationsNoel Geoffroy - CEOBrian Grass - Chief Financial OfficerBob Labick - President Conference Call Participants Rupesh Parikh - Senior Equity Research AnalystSusan Anderson - Managing Director & Senior AnalystPeter Grom - Equity Research Analyst Operator and welcome to the Helen of Troy Fourth Quarter Fiscal twenty twenty five Earnings Con ...