Helen of Troy (HELE) Offers Weak Full-Year Outlook

Helen of Troy Limited (NASDAQ:HELE) has been around for more than five decades. It started as a wig store in 1968 and evolved into a leading consumer product company mainly by acquiring businesses in lucrative sectors. It currently owns various famous and trusted brands in the beauty, houseware, and health categories.

The El Paso, Texas-based company recently announced better-than-expected financial results for the first quarter, mainly helped by improved foot traffic. Helen of Troy reported earnings of $2.31 per share for the three months ended May 31, compared to $2.37 per share in the year-ago quarter. Excluding certain items, the company reported adjusted earnings of $3.48 per share, above analysts’ average estimate of $2.63 per share.

Revenue for the quarter rose 28.6 percent on a year-over-year basis to $541.2 million, exceeding the consensus forecast of $439 million. If we look at the performance of key segments, housewares revenue jumped 38 percent to $193.6 million, while health and home revenue inched up 2.1 percent to $204.1 million. Comparatively, beauty revenue skyrocketed 79 percent to $143.5 million.

Speaking on the results, CEO Julien Mininberg said, “We delivered an outstanding first quarter, with even higher sales growth and stronger profitability than we expected. The 28.6% sales growth was broad based, with Beauty and Housewares leading the way as re-openings drove store traffic and our brands continued to distinguish themselves with consumers. Health & Home also grew, surpassing the very large COVID-related first quarter base laid down a year ago. International sales grew even faster than the fleet average as this strategic focus area benefited from prior flywheel investments. We grew adjusted EPS by 37.5%, as the very strong sales growth more than offset normalized spending versus last year and headwinds from widespread inflation affecting nearly all input costs including materials, labor, and transportation.”

Helen of Troy also issued its financial outlook for FY 2022. It expects adjusted earnings in the range of $10.46 per share to $10.97 per share and revenue between $1.93 billion to $1.98 billion for the full year. The guidance was lower than analysts’ average estimate of $11.64 per share for adjusted earnings and $2.02 billion for revenue.

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