Helen of Troy recorded second-quarter earnings that beat a Wall Street estimate with a strong contribution from the company’s Home & Outdoor business.
Net income was $4.6 million, or 19 cents per diluted share, versus a net loss of $308.6 million, or $13.44 per diluted share, in the year-previous quarter. Adjusted net income was $19 million, or 79 cents per diluted share, versus $13.5 million, or 59 cents per diluted share, in the year-before period.
A Zacks Investment Research analyst consensus estimate pegged earnings per adjusted diluted share at 51 cents and revenues at $441.5 million.
Consolidated net sales were $440.9 million compared to $431.8 million in the year-earlier quarter, the company noted, as organic business advanced 2.1%. Operating income in the quarter was $22.9 million versus an operating loss of $315.7 million in the year-prior period, Helen of Troy reported, while adjusted operating income was $37.9 million versus $26.9 million, Helen of Troy noted.
The company’s Home & Outdoor group — including Oxo kitchenware, Hydro Flask beverageware and Osprey outdoor gear (pictured above)— saw net sales grow 9.2% to $227.9 million year-over year with growth across all brands primarily driven by strong demand for technical, travel and lifestyle packs, an increase in international sales, assortment and distribution gains, higher closeout channel sales and incremental revenue from new product launches, the company reported.
Operating income was $24.1 million versus an operating loss of $72.6 million in the year-past quarter, while adjusted operating income increased 39.2% to $28 million, Helen of Troy stated
Beauty & Wellness— including Revlon hair appliances, Honeywell home environment appliances, Vicks and Braun health care products and PUR water filters — saw net sales revenue slip by 4.5% to $213 million year over year with a decline in beauty hair appliances and prestige hair care products primarily because of softer consumer demand, Helen of Troy said. This included the impact of consumer price sensitivity, continued competition, reduced replenishment orders from retail customers and lower closeout channel sales, as well as a decrease in water filtration principally driven by softer consumer demand and increased competitive marketing activity, according to the company.
Partially offsetting the negative factors, the company reported, were an increase in heater and thermometer sales benefitting from the favorable comparative impact of tariff-related effects reducing direct import orders and disruption in the China market during the period a year previous. Nail care grew behind strong consumer demand, higher replenishment orders and new and expanded distribution, and incremental growth from new product launches, the company noted.
Operating loss was $1.1 million versus an operating loss of $243.1 million in the year-past quarter, while adjusted operating income increased 45.7% to $10 million
For the current fiscal year, Helen of Troy narrowed its consolidated net sales outlook to $1.77 billion to $1.82 billion and raised its adjusted diluted earnings per share outlook to $3.60 to $4.15. The company previously forecast consolidated net sales of $1.76 billion to $1.83 billion and adjusted diluted earnings per share of $3.25 to $3.75.
Helen of Troy second-quarter results included gross pre-tax tariff refunds of $26.9 million, of which $23 million was reinvested during the period, the company indicated, resulting in a net pre-tax benefit of about $4 million, and a diluted EPS benefit of about 12 cents,
In announcing the financial results, G. Scott Uzzell, Helen of Troy CEO, said, “Our second quarter results reflect continued progress against our multi-year roadmap. Sales were in line, and adjusted EBITDA and adjusted EPS were better than expected, without including the net tariff refund benefit in the quarter. Sales growth was broad-based across Home & Outdoor, Wellness, and International, with improving fundamentals across the balance of the portfolio. We also continued to strengthen our balance sheet, generate free cash flow and focus resources on the opportunities with the greatest potential to create value. While there is still meaningful work ahead, we are encouraged by the progress we are making to build a better Helen of Troy on the road to becoming a bigger Helen of Troy. We plan to continue making targeted investments in our brands, capabilities, and organization, including reinvesting the vast majority of tariff refunds, while allowing a portion to support near-term earnings and liquidity.”
