Helen of Troy Ltd (HELE) shares surged over 12% in pre-market trading on Wednesday after the company reported better-than-expected second-quarter results, reaffirming its full-year financial outlook. The company’s strong performance, despite a slight decline in overall sales, fueled optimism among investors.
While total sales for the quarter dipped 3.5% year-over-year to $474.221 million, the results outpaced analyst expectations of $458.237 million. This decline was primarily driven by a decrease in the Beauty & Wellness segment, attributed to lower sales of hair appliances, air purifiers, and humidifiers. However, the Home & Outdoor segment bucked the trend, showing a positive 0.8% growth year-over-year.
Earnings also impressed. Adjusted EPS declined 34.1% year-over-year to $1.21, surpassing the consensus estimate of $1.04. Despite the decline, the company managed to maintain healthy profit margins. The gross profit margin dipped slightly to 45.6%, while the operating margin contracted to 7.3%.
The company’s CEO, Noel M. Geoffroy, expressed satisfaction with the results, stating, “We are pleased to report second-quarter results that were above expectations and we are reaffirming our annual outlook for net sales, adjusted EPS, and adjusted EBITDA. During the quarter, we took decisive actions toward our long-term strategic initiatives, including strengthening the core and further shaping our growth portfolio.”
Looking ahead, Helen of Troy continues to anticipate consolidated net sales revenue in the range of $1.885 billion to $1.935 billion, slightly exceeding the consensus estimate of $1.896 billion. Adjusted EPS is projected to be between $7.00 and $7.50, surpassing the consensus of $7.12. The company also maintained its adjusted EBITDA guidance of $287 million to $297 million, implying a year-over-year decline but reflecting the reinvestment of savings from Project Pegasus for future growth.
Project Pegasus, a strategic initiative aimed at driving long-term growth and efficiency, remains on track to achieve savings of $26 million to $30 million. The company’s commitment to this initiative, coupled with its strong second-quarter performance, suggests a positive outlook for the remainder of the year.
