Helen of Troy Stock Tumbles After Slashing Full-Year Profit Outlook
Consumer goods firm cuts its adjusted EPS forecast by over 15% at the midpoint, citing increased tariffs and a cautious retail environment.
Shares of Helen of Troy (NASDAQ: HELE) fell more than 3% in early trading after the consumer products company significantly lowered its full-year earnings forecast, citing a challenging consumer landscape and mounting pressure from tariffs.
The El Paso, Texas-based company, which owns popular brands such as OXO, Hydro Flask, and Braun, announced the revised outlook as part of its third-quarter earnings report. Helen of Troy now expects full-year fiscal 2026 adjusted diluted earnings per share (EPS) in a range of $3.25 to $3.75. This represents a substantial reduction from previous estimates and falls well short of analyst consensus expectations that were closer to $4.02.
The market reacted swiftly to the news, with the stock price dropping 3.1% to $21.08 on Thursday morning. The guidance cut overshadowed the company's third-quarter results, which also pointed to significant headwinds. Helen of Troy reported a net loss of $84.1 million, or $3.65 per share, a dramatic reversal from the net profit of $49.6 million, or $2.17 per share, recorded in the same period last year. On an adjusted basis, which excludes certain one-time items, quarterly EPS was $1.71, down from $2.67 a year prior.
In its announcement, the company attributed the sharp downward revision in its forecast to several factors. It highlighted a difficult consumer spending environment and noted that key retailers are maintaining cautious inventory levels, leading to lower replenishment orders. Most critically, the company pointed to an increased financial impact from tariffs.
According to the initial signal that triggered the report, the estimated negative impact from tariffs was revised upward to approximately $30 million for the fiscal year, a significant jump from a prior estimate of $20 million. This increase directly pressures profit margins in an already difficult operating environment.
The company's updated fiscal 2026 outlook also narrowed its forecast for consolidated net sales to a range of $1.758 billion to $1.773 billion. The primary drivers for the outlook change were a decrease in projected operating income, particularly from its Beauty & Wellness segment, and a higher adjusted effective income tax rate.
Helen of Troy's portfolio includes a mix of household staples and discretionary items, making it a barometer for consumer health. Its Housewares segment includes the widely recognized OXO brand of kitchen tools, while its Health & Home division markets products under licenses for brands like Honeywell and Braun. The performance of these segments is closely watched by investors for signs of consumer pullback.
Investors will now be watching to see how the company navigates the dual challenges of cost pressures from tariffs and waning consumer demand through the remainder of its fiscal year. Management's ability to execute on its cost-saving initiatives and maintain brand strength will be critical in the coming quarters.