Helen of Troy Limited (HELE), a leading provider of consumer products, recently reported its second-quarter fiscal 2025 results, revealing a mixed bag of performance. While both sales and earnings declined year-over-year, they surpassed Zacks Consensus Estimates, indicating a degree of resilience in the face of economic headwinds.
Despite ongoing macroeconomic challenges, Helen of Troy achieved early success with its ‘Reset and Revitalize’ initiative, a strategic plan designed to strengthen its core business and reshape its growth portfolio. This initiative is driven by a focus on stronger brand fundamentals, refined marketing and innovation efforts, and an expansion of its distribution network.
The company’s adjusted earnings per share came in at $1.21, exceeding the Zacks Consensus Estimate of $1.08 by approximately 12%. However, the bottom line did experience a 30.5% year-over-year decline, primarily due to reduced adjusted operating income and higher tax rates. These factors were partially offset by lower interest expenses and a reduction in outstanding shares.
Consolidated net sales for the quarter reached $474.2 million, surpassing the Zacks Consensus Estimate of $457 million. Nonetheless, this figure represents a 3.5% decrease from the same period last year. The decline in net sales was attributed to reduced sales of hair appliances, humidifiers, and air purifiers within the Beauty & Wellness unit. This was partly compensated by growth in home and insulated beverageware categories within the Home & Outdoor segment. Furthermore, international expansion and increased sales of fans and thermometers within the Beauty & Wellness category helped mitigate the overall decline in net sales.
Looking ahead to fiscal 2025, Helen of Troy anticipates a range of $1.885 billion to $1.935 billion in consolidated net sales, indicating a projected year-over-year decline of 6% to 3.5%. This forecast reflects concerns about persistent inflation, continued softness in consumer spending, particularly in discretionary product categories, and potential disruptions at the company’s Tennessee distribution facility.
Despite the challenges, Helen of Troy maintains its outlook for fiscal 2025 adjusted EPS to range from $7.00 to $7.50, representing a decline of 15.8% to 21.4%. The company also anticipates adjusted EBITDA to be in the range of $287-$297 million, reflecting a potential fall of 11.8-14.6%.
In addition to Helen of Troy’s performance, the article also highlights three other companies worth considering: The Chef’s Warehouse (CHEF), Flowers Foods (FLO), and McCormick (MKC). These companies are all categorized as Zacks Rank #2 (Buy) and have demonstrated positive earnings surprises and growth potential.
