Helen of Troy Limited HELE reported fourth-quarter fiscal 2026 results, with the top and bottom lines beating the Zacks Consensus Estimate. However, both net sales and earnings experienced year-over-year declines.
HELE’s Quarterly Performance: Key Metrics & Insights
Helen of Troy posted adjusted earnings of 83 cents per share, beating the Zacks Consensus Estimate of 66 cents. The bottom line declined 64.4% from $2.33 reported in the year-ago period.
Helen of Troy Limited Price, Consensus and EPS Surprise
Helen of Troy Limited price-consensus-eps-surprise-chart | Helen of Troy Limited Quote
HELE reported net sales of $470 million, which beat the Zacks Consensus Estimate of $454 million. The top line decreased 3.3% from $485.9 million posted in the year-ago period. This decline was primarily caused by weaker performance in the Beauty & Wellness segment, reflecting lower sales of fans, prestige hair care products, humidifiers and air purifiers. In addition, Home & Outdoor sales declined due to reduced demand in insulated beverageware and home categories. These decreases were partially offset by strong demand for technical, travel and lifestyle packs, increased thermometer sales and organic growth from Olive & June.
The consolidated Gross margin decreased 400 basis points to 44.6% in the quarter. The company attributed the contraction primarily to higher tariffs, less favorable inventory obsolescence compared with the prior year, higher retail trade and promotional expense, and a less favorable channel mix within Home & Outdoor, partially offset by the Olive & June acquisition and lower commodity and product costs. We estimated a 45.5% gross margin.
The consolidated SG&A ratio increased 270 basis points to 38.6% on higher incentive compensation, EPA compliance costs, the impact of the Olive & June acquisition and unfavorable operating leverage.
The adjusted operating income declined 47.7% to $39.2 million, while the adjusted operating margin decreased 710 bps to 8.3%, reflecting higher tariffs, less favorable inventory obsolescence year over year, increased annual incentive compensation, higher retail trade and promotional expenses, an unfavorable channel mix within Home & Outdoor, and unfavorable operating leverage. These headwinds were partially offset by lower commodity and product costs, as well as the favorable impact of the Olive & June acquisition. We expected an adjusted operating margin of 8.7% for the quarter.
HELE’s Segmental Performance
Net sales in the Home & Outdoor segment declined 1.5% to $216.5 million, primarily due to competitive pressures, softer consumer demand, lower replenishment orders and the unfavorable comparison to strong seasonal and holiday retail placements in the prior year within the insulated beverageware category.
Additionally, online home category sales declined, primarily due to retailer pull-forward activity in the fourth quarter of fiscal 2025, driven by tariff uncertainty and anticipated supply disruptions. These headwinds were partially offset by strong demand for technical, travel and lifestyle packs, incremental sales from new product launches in insulated beverageware and elevated closeout sales.
Net sales in the Beauty & Wellness segment fell 4.7% to $253.5 million due to a $23.7 million, or 8.9%, drop in Organic business sales. The decrease reflects lower performance in Wellness, due to shipment pauses supporting the adoption of price increases by retail partners and reduced replenishment orders amid softer demand trends. Beauty also declined due to weaker consumer demand, increased competition and lower replenishment orders.
In addition, a below-average illness season negatively impacted the humidification category. These declines were partially offset by growth in thermometry, mass beauty and continued organic growth from Olive & June.
HELE’s Financial Position
Helen of Troy ended the quarter with cash and cash equivalents of $18.9 million and total short and long-term debt of $780.8 million. Net cash provided by operating activities for the fiscal fourth quarter was $111.3 million. The free cash flow for the same period was $103.1 million.
HELE’s Outlook
For fiscal 2027, the company expects net sales of $1.751 billion to $1.822 billion, including $854 million to $882 million for Home & Outdoor and $897 million to $940 million for Beauty & Wellness. Adjusted earnings are expected in the range of $3.25 to $3.75 per share, with adjusted EBITDA of $190 million to $197 million and free cash flow of $85 million to $100 million.
This Zacks Rank #3 (Hold) company has gained 34% in the past three months against the industry’s decline of 32.1%.
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