Helen of Troy Q3 Earnings on Deck: Key Factors You Should Understand

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]