Helen of Troy Stock Plunges After Slashing Profit Outlook
Shares fell more than 6% after the consumer goods maker cut its full-year forecast, citing pressure from US tariffs and a large asset writedown.
Shares of Helen of Troy (HELE) tumbled in early trading after the consumer products company significantly lowered its earnings guidance for fiscal 2026, signaling that pressure from tariffs and a challenging retail environment are weighing on its profitability.
The El Paso-based company, which owns popular brands such as OXO, Hydro Flask, and Braun, saw its stock fall by more than 6% to trade at $19.63. The sell-off was triggered by an announcement that it now expects adjusted diluted earnings per share in the range of $3.25 to $3.75, a sharp reduction from previous forecasts.
While the company reported third-quarter adjusted earnings of $1.71 per share, which met analyst estimates, it booked a substantial GAAP loss of $3.65 per share. According to a regulatory filing, this loss was primarily driven by a non-cash asset impairment charge of $3.11 per share, reflecting a writedown on the value of its assets.
In a statement, Chief Executive G. Scott Uzzell acknowledged the difficulties, stating, "We delivered third quarter results in line with our outlook and are making progress toward stabilizing the business despite the challenging external environment." Despite the broader challenges, Uzzell noted that key brands like OXO and Osprey experienced revenue growth during the quarter.
The revised outlook reflects persistent macroeconomic headwinds, most notably the impact of US tariffs on goods imported from China. Helen of Troy flagged the tariff pain and explained that its guidance accounts for lower direct import orders from retailers who are pulling back due to the duties. The company is actively working to mitigate these costs by diversifying its manufacturing outside of China, with a goal to reduce its cost of goods sold exposed to Chinese tariffs to between 25% and 30% by the end of the fiscal year.
Still, the company anticipates the net impact from tariffs on its operating income to be less than $30 million, an increase from a prior estimate of less than $20 million. This suggests that price increases and cost-cutting measures have not been enough to fully offset the financial strain from the trade policies.
The guidance cut casts a shadow on the company's efforts to navigate a landscape of shifting consumer spending habits and persistent inflation. With a portfolio that spans kitchen gadgets, beauty appliances, and outdoor gear, Helen of Troy is exposed to discretionary spending, which has come under pressure as households prioritize essential goods.
Investors are now recalibrating their expectations for the owner of once high-flying brands like Hydro Flask, which faces a marketplace crowded with competitors. The stock is trading near its 52-week low of $17.01, and the lowered forecast sets a new, more cautious tone for the company's performance heading into the final quarter of its fiscal year.