Helen of Troy NASDAQ: HELE said first-quarter fiscal 2027 results came in ahead of its expectations, with management pointing to stronger sales across both business segments and early progress on a broader effort to restore growth and improve execution.
Chief Executive Officer Scott Uzzell told investors the company is focused on becoming “a better Helen of Troy” before pursuing a bigger growth agenda. He said first-quarter sales exceeded internal expectations in both Home and Outdoor and Beauty and Wellness, while margin and earnings performance reflected intentional investments in brands, innovation and people.
“While we’re encouraged by a solid start to the fiscal year, we remain clear-eyed,” Uzzell said. “This is the first year of a multi-year roadmap.”
Sales Rise Across Both Segments
Chief Financial Officer Brian Grass said consolidated sales increased 8.2% in the quarter, helped by disciplined execution and improving business fundamentals. He noted that results included approximately $4 million to $5 million of favorable order phasing tied to the earlier timing of Prime Day.
Home and Outdoor sales rose 9.5%, with growth across Osprey, OXO and Hydro Flask. Grass said Osprey was the strongest performer, benefiting from improvements in its international distribution network and e-commerce momentum. OXO benefited from lapping prior tariff-related disruption, strong point-of-sale trends and expanded brick-and-mortar distribution, while Hydro Flask growth reflected expanded retail distribution, inventory optimization and e-commerce momentum.
Beauty and Wellness sales increased 7%, with growth in both beauty and wellness. Grass said the wellness portfolio outperformed expectations, driven by Braun, Vicks, Honeywell and PUR. In beauty, Olive & June led growth on expanded distribution, continued innovation and strong consumer engagement, partially offset by softness in some core beauty brands due to ongoing point-of-sale pressure and pricing elasticity.
International sales increased 1.1%, driven by Osprey’s improved distribution network and strength across wellness, partly offset by softer demand in kitchenware and hair appliances in a competitive retail environment.
Brand Innovation and Operating Model Changes
Uzzell said North American point-of-sale trends in tracked channels showed year-over-year consolidated growth, concentrated in Braun, Osprey, OXO and Olive & June. He cited several product examples, including Osprey’s Daylite and Transporter expandable travel packs, OXO’s move into pet products, Braun blood pressure monitors in mass channels and Olive & June’s Star Wars-themed collaboration.
“Brands that deliver meaningful innovation and meet real consumer needs can continue to win, even in a more cautious spending environment,” Uzzell said.
Management framed fiscal 2027 as a year to restore momentum under three pillars: consumer-first innovation, commercial and operational excellence, and people and culture. Uzzell said the company is reshaping its operating model to move decision-making closer to consumers and the marketplace.
As part of that change, Helen of Troy has designated five dedicated segment general managers, each responsible for a brand portfolio including strategy, innovation, commercial execution and business results. Uzzell said the roles include both internal leaders and external hires and are not expected to materially increase operating costs. The company also formalized three geographic general manager roles to accelerate brand development outside North America.
Uzzell said the company is also focused on pricing discipline, improving revenue quality, reducing exposure to lower-margin channels and strengthening e-commerce execution, demand planning and alignment across sales, marketing and product teams.
Margins Pressured by Tariffs and Costs
Grass said margins and profitability were largely in line with expectations. Consolidated gross profit margin fell 110 basis points to 46%, reflecting the unfavorable impact of tariffs, a less favorable inventory obsolescence impact year over year and a less favorable customer mix in Home and Outdoor.
Adjusted operating margin declined 30 basis points to 4%, due to tariffs and higher investment in the organization and go-to-market structure, partially offset by lower outbound freight and operating leverage. SG&A as a percentage of sales decreased to 31% from 45.1% a year earlier, primarily because of a $55 million pre-tax gain from the sale of a distribution facility disclosed in April, partly offset by higher investment in people.
Inventory ended the quarter at $467 million, down $17 million from the prior year despite approximately $15 million of incremental tariff costs in inventory. Grass said net leverage declined to 3.48 times from 3.87 times at the end of the fourth quarter. Free cash flow was slightly negative, mainly because of tariff payments, annual incentive compensation payments and higher cash taxes, partly offset by higher cash earnings.
Guidance Raised for Sales, Earnings Outlook Maintained
Helen of Troy raised its full-year net sales outlook slightly to a range of $1.759 billion to $1.831 billion. The company now expects Home and Outdoor net sales of $859 million to $884 million and Beauty and Wellness net sales of $900 million to $947 million.
The company maintained its adjusted EBITDA outlook of $190 million to $197 million, representing growth of 2.1% to 6.3%, and kept adjusted EPS guidance at $3.25 to $3.75. Free cash flow guidance remained $85 million to $100 million, while planned capital expenditures were increased by $2 million.
Grass said the full-year revenue outlook reflects first-quarter performance, partially offset by the Prime Day-related order pull-forward from the second quarter and revenue risk tied to expected supply disruption, largely from the conflict in the Middle East.
The earnings outlook now includes an estimated $9.2 million pre-tax benefit from phase one tariff refunds. Grass said that benefit is more than offset by expected cost inflation, including higher commodity inputs, unfavorable Chinese yuan fluctuations, increased inbound and outbound freight expense and higher costs to secure goods to avoid supply disruption.
During the question-and-answer session, Grass said the company expects to collect the bulk of the remaining phase one tariff refunds in the second quarter, though later refund phases could extend across several quarters and potentially into fiscal 2028. He said Helen of Troy has paid $71 million in IEEPA tariffs not included in the phase one refund process and expects future refunds could provide upside, but management has not included them in the outlook because timing and collectability remain uncertain.
Management Emphasizes Investment Over Cost Cutting
In response to analyst questions, Uzzell said reinvestment priorities include talent, strategic innovation, omnichannel capabilities, supply chain improvements and international market development. Grass added that future tariff refund benefits would likely be used in part to reinvest in the business and in part to offset any cost inflation beyond current assumptions.
On pricing, Uzzell said the company was able to pass through roughly 80% of its intended pricing actions and is monitoring elasticity by brand and category. Grass said overall point-of-sale dollars are growing across the portfolio, although unit trends remain an area of focus in categories where prices increased.
Looking ahead, Grass said the company expects first-half sales growth in the low- to mid-single digits and a low-single-digit decline in the second half at the midpoint of guidance. He said about 20% of annual adjusted EPS is expected in the first half, including roughly 15% in the second quarter.
Uzzell closed the call by saying Helen of Troy remains focused on restoring brand momentum, standing up the new operating model and improving balance sheet productivity.
About Helen of Troy NASDAQ: HELE
Helen of Troy Limited is a global consumer products company that designs, sources and markets a diversified portfolio of household, health and beauty brands. Headquartered in El Paso, Texas, the company operates through three principal segments—Health & Home, Housewares and Beauty—offering products under well-known names including OXO, Vicks, Braun, Honeywell Home, PUR and Hot Tools. Helen of Troy distributes its products through a combination of mass, specialty and e-commerce channels to consumers, retailers and distributors worldwide.
The Housewares segment features kitchen tools, gadgets and organizational solutions marketed primarily under the OXO brand, recognized for its ergonomic “Good Grips” design.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Helen of Troy, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Helen of Troy wasn't on the list.
While Helen of Troy currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Discover the next wave of investment opportunities with our report, 7 Stocks That Will Be Magnificent in 2026. Explore companies poised to replicate the growth, innovation, and value creation of the tech giants dominating today's markets.
Get This Free Report
