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Q3 Fiscal 2026 Results - Net sales revenue decreased by 34% from $5307 million in Q3 FY25 to $5128 million in Q3 FY26[16] - Organic net sales decreased by 108% with 33% or $173 million of the decline due to tariff-related revenue disruptions[17] - Gross margin decreased by 200 basis points from 489% in Q3 FY25 to 469% in Q3 FY26 primarily due to higher tariffs and less favorable inventory obsolescence[16, 17] - Adjusted EBITDA margin decreased by 350 basis points from 182% in Q3 FY25 to 147% in Q3 FY26 primarily due to lower gross profit margin and a higher SG&A rate[16, 17] - Adjusted diluted EPS decreased from $267 in Q3 FY25 to $171 in Q3 FY26 primarily due to lower adjusted operating income and higher interest expense[16, 17] - Free cash flow decreased from $561 million YTD FY25 to $288 million YTD FY26[16] Tariff Mitigation and Outlook - The company expects to reduce the remaining unmitigated tariff impact to less than $30 million in Fiscal 2026[30] - The company is implementing a dual sourcing strategy to lessen exposure to China manufacturing with a goal of 40% dual sourcing by the end of FY26 and 60% by the end of FY27[30, 33] - The company anticipates consolidated net sales of $1758 to $1773 billion for the full year Fiscal 2026[36] - The company projects adjusted diluted EPS of $325 to $375 for the full year Fiscal 2026[36]

Financial Performance - Management reduced forecasts for net sales revenue, gross margin, and earnings before interest and taxes due to tariff policies and macroeconomic conditions, impacting consumer spending and retailer orders [36]. - For the three months ended November 30, 2025, total sales revenue was $512.8 million, a decrease of 3.4% from $530.7 million in the same period of 2024 [92]. - For the nine months ended November 30, 2025, total sales revenue was $1.316 billion, down 7.4% from $1.422 billion in the same period of 2024 [92]. - The company incurred an operating loss of $731.1 million for the nine months ended November 30, 2025, compared to an operating income of $140.7 million in the same period of 2024 [92]. - Consolidated operating loss was $8.4 million for the three months ended November 30, 2025, compared to operating income of $75.1 million for the same period last year, with an operating margin decrease to (1.6)% from 14.2% [150]. - Net loss was $84.1 million for the three months ended November 30, 2025, compared to net income of $49.6 million for the same period last year, resulting in a diluted loss per share of $3.65 [150]. - For the first nine months of fiscal 2026, net loss was $843.4 million, compared to net income of $72.8 million, leading to a diluted loss per share of $36.70 versus diluted earnings per share of $3.15 [215]. Asset Impairment - Goodwill impairment charges for the Home & Outdoor segment totaled $648.6 million for the nine months ended November 30, 2025, with significant charges from Hydro Flask and Osprey reporting units [37]. - The Beauty & Wellness segment recorded goodwill impairment charges of $207.3 million for Health & Wellness, Drybar, Curlsmith, and Revlon businesses for the nine months ended November 30, 2025 [38]. - Impairment charges during the nine months ended November 30, 2025, totaled $648.6 million for goodwill, $97.0 million for indefinite-lived intangible assets, and $61.1 million for definite-lived intangible assets [77]. - The company recognized pre-tax asset impairment charges of $65.9 million for the three months ended November 30, 2025, and $806.7 million for the nine months ended November 30, 2025 [233]. Stock and Shareholder Actions - The company authorized a repurchase of up to $500 million of common stock, with $498.2 million remaining available for purchase as of November 30, 2025 [47]. - The company repurchased 1,011,243 shares of common stock for an aggregate value of $100.019 million at an average price of $98.91 per share during the nine months ended November 30, 2024 [49]. - The company recorded share-based compensation expense of $14.7 million for the nine months ended November 30, 2025, net of income tax benefits [45]. Debt and Financing - As of November 30, 2025, total long-term debt was $892.393 million, with a weighted average interest rate of 5.8% [57]. - The company entered into a credit agreement providing for aggregate commitments of $1.5 billion, including a $1.0 billion revolving credit facility and a $250 million term loan facility [58]. - The outstanding principal balance under the Credit Agreement was $897.5 million as of November 30, 2025, with $625 million hedged using interest rate swaps [83]. - The company was in compliance with all covenants under the terms of the amended credit agreement as of November 30, 2025 [66]. Segment Performance - The company operates through two reportable segments: Home & Outdoor and Beauty & Wellness, with performance assessed using segment operating income [90]. - The Home & Outdoor segment reported sales revenue of $229.6 million, down 6.7% from $246.1 million year-over-year [92]. - The Beauty & Wellness segment generated sales revenue of $283.2 million, a slight decrease from $284.6 million in the prior year [92]. - Organic business revenue declined by $57.1 million, or 10.8%, for the three months ended November 30, 2025, primarily due to lower sales in Beauty & Wellness and Home & Outdoor segments [154]. Tax and Regulatory Matters - The company expects an increase in its effective tax rate for fiscal 2026 due to global tax reform initiatives, including the implementation of Pillar Two [103]. - Income tax expense for the three months ended November 30, 2025, was $60.0 million on a pre-tax loss of $24.0 million, compared to $13.5 million on pre-tax income of $63.2 million for the same period last year [108]. - For the nine months ended November 30, 2025, income tax expense was $69.2 million on a pre-tax loss of $774.2 million, compared to $30.4 million on pre-tax income of $103.3 million for the same period last year [109]. Operational Challenges - The company experienced reduced replenishment orders from retail customers due to softer consumer demand, adversely impacting sales and cash flows during fiscal 2025 [129]. - The company expects continued uncertainty in its business due to inflation, tariffs, and consumer confidence, which may adversely impact results [127]. - The cough/cold/flu season for 2024-2025 was below historical averages, which may affect sales in the Beauty & Wellness segment [144]. Acquisitions and Growth Strategies - The company completed the acquisition of Olive & June for an initial cash consideration of $224.7 million, which is expected to enhance its Beauty portfolio and drive greater earnings growth [117]. - The Olive & June acquisition contributed $37.7 million, or 7.1%, to consolidated net sales revenue growth for the three months ended November 30, 2025 [155]. - The Olive & June acquisition contributed $97.9 million, or 13.3%, to segment net sales revenue growth for the first nine months of Fiscal 2026 [164]. Restructuring Initiatives - Project Pegasus, a global restructuring plan, was completed in Q4 of fiscal 2025, with expected savings to be realized through fiscal 2027, incurring restructuring charges of $3.5 million and $6.9 million for the three and nine months ended November 30, 2024, respectively [50][51]. - The company incurred cash restructuring payments of $5.7 million and $9.8 million for the nine months ended November 30, 2025, and 2024, respectively [51]. - The company has a remaining liability of $7.7 million related to restructuring charges as of February 28, 2025, from Project Pegasus [134].

Exhibit 99.1 Helen of Troy Limited Reports Third Quarter Fiscal 2026 Results Consolidated Net Sales Decline of 3.4% GAAP Diluted Loss Per Share of $3.65 Adjusted Diluted EPS of $1.71 (1) Updates Fiscal 2026 Outlook: Consolidated Net Sales of $1.758-$1.773 Billion GAAP Diluted Loss Per Share of $36.07-$35.57 Adjusted Diluted EPS of $3.25-$3.75 El Paso, Texas, January 8, 2026 — Helen of Troy Limited (NASDAQ: HELE), designer, developer, and worldwide marketer of branded consumer home, outdoor, beauty, and well ...

Core Insights - Helen of Troy Limited reported consolidated net sales revenue of $512.8 million for the three-month period ended November 30, 2025, a decrease from $530.7 million in Fiscal 2025 [1] - The gross profit margin for the company was 46.9%, down from 48.9% in the previous fiscal year [1] - The operating margin was reported at (1.6)%, which includes pre-operating expenses [1]

Helen of Troy Limited (NASDAQ:HELE) will release earnings results for its third quarter before the opening bell on Thursday, Jan. 8, 2025.Analysts expect the El Paso, Texas-based company to report quarterly earnings at $1.68 per share, down from $2.67 per share in the year-ago period. The consensus estimate for Helen of Troy's quarterly revenue is $502.17 million, up from $530.71 million a year earlier, according to data from Benzinga Pro.On Nov. 25, Helen of Troy announced amendment to existing credit agre ...

Helen of Troy Limited (NASDAQ:HELE) will release earnings results for its third quarter before the opening bell on Thursday, Jan. 8, 2025.Analysts expect the El Paso, Texas-based company to report quarterly earnings at $1.68 per share, down from $2.67 per share in the year-ago period. The consensus estimate for Helen of Troy's quarterly revenue is $502.17 million, up from $530.71 million a year earlier, according to data from Benzinga Pro.On Nov. 25, Helen of Troy announced amendment to existing credit agre ...

Core Insights - Helen of Troy Limited (HELE) is expected to report a decline in both revenue and earnings for the third quarter of fiscal 2026, with projected revenues of $505.4 million, reflecting a 4.8% decrease year-over-year [1][9] - The earnings per share (EPS) estimate has decreased to $1.75, indicating a 36% decline compared to the same quarter last year [2][9] Revenue and Earnings Outlook - The Zacks Consensus Estimate for HELE's quarterly revenues is $505.4 million, which is a 4.8% decrease from the prior-year quarter [1][9] - The consensus estimate for quarterly earnings has moved down to $1.75 per share, representing a 36% decline from the previous year's figure [2][9] Market Conditions and Challenges - The company is facing pressure due to persistent softness in consumer spending across discretionary categories, leading to weak demand and limited unit volumes [3] - Retailers are maintaining cautious inventory positions, resulting in lower replenishment orders, while tariff-related pullbacks in direct import orders are disrupting sales patterns [3] - An expected 12.5% drop in organic volumes for the fiscal third quarter is anticipated [3] Cost and Expense Factors - Rising Selling, General and Administrative (SG&A) expenses are a concern, with an expected 180-basis-point increase in adjusted SG&A ratio to 34.1% of sales in the fiscal third quarter [4] - Tariff-related product costs and elevated operating and logistics expenses are pressuring the cost of goods sold and margins [5] Strategic Initiatives - The strength of the company's Leadership Brands is providing some support amid broader challenges [6] - Operational discipline and portfolio optimization efforts are stabilizing performance, while the global restructuring initiative, Project Pegasus, is delivering cost savings [6] Earnings Prediction - The current model does not predict an earnings beat for HELE, with a Zacks Rank of 3 and an Earnings ESP of -6.57% [7]

Industry Overview - The Zacks Cosmetics industry is facing challenges due to softer consumer spending, uneven retail restocking, and persistent cost pressures, which are squeezing margins and reshaping demand trends [1][4]. - Companies in this industry manufacture and market a variety of beauty and personal care products, including skincare, fragrance, makeup, and hair care items [3]. Current Challenges - Rising costs for packaging, ingredients, logistics, and promotional activities are impacting profit margins, while trade tensions and potential supply chain disruptions add uncertainty [1][4]. - Consumers are prioritizing essential purchases over discretionary spending, leading to decreased demand for cosmetics [4]. Long-term Growth Drivers - Despite near-term pressures, long-term fundamentals are supported by innovation and digital transformation, with companies investing in product innovation and enhanced e-commerce capabilities [2][6]. - The demand for organic and clean beauty products is growing, prompting companies to innovate and expand their offerings [6]. Industry Performance - The Zacks Cosmetics industry currently holds a Zacks Industry Rank of 177, placing it in the bottom 27% of over 243 Zacks industries, indicating dull near-term prospects [7][8]. - The industry has underperformed the S&P 500, returning 10% over the past year compared to the S&P 500's growth of 18.3% [11]. Valuation Metrics - The industry is trading at a forward 12-month price-to-earnings (P/E) ratio of 28.99X, higher than the S&P 500's 23.45X and the sector's 16.42X [14]. Notable Companies - **The Estee Lauder Companies**: Focused on restoring profitability and driving long-term growth through innovation and digital channels, with a Zacks Rank of 1 [17]. The consensus estimate for its EPS has increased by 0.5% to $2.15 [18]. - **Coty Inc.**: Currently holds a Zacks Rank of 3, focusing on stabilizing its Consumer Beauty segment and enhancing e-commerce capabilities. The EPS estimate remains unchanged at 42 cents [21][22]. - **Helen of Troy Limited**: Also holds a Zacks Rank of 3, pursuing sustainable growth through its Leadership Brands and strategic investments. The EPS estimate has decreased by 1.2% to $4.05 [29][24]. - **European Wax Center, Inc.**: Positioned for long-term expansion with a Zacks Rank of 3, focusing on customer acquisition and operational productivity. The EPS estimate has decreased by 4.7% to 61 cents [27][28].

Group 1 - The article discusses the investment potential of Helen of Troy (HELE), highlighting that shares appeared undervalued over a year ago amid concerns regarding the Olive & June acquisition [1] - The company faced challenges due to inflationary pressures impacting consumer discretionary spending, which negatively affected its business operations and execution [1] - The investment group "Value In Corporate Events" focuses on identifying opportunities in major corporate events such as IPOs, mergers & acquisitions, and earnings reports, providing coverage of 10 significant events monthly [1]