Helen of Troy Shares Down on Q4 Earnings Miss, Sales Decline Y/Y

Core Insights - Helen of Troy Limited (HELE) experienced a 12% decline in share price after reporting disappointing fourth-quarter fiscal 2025 results, with both top and bottom lines decreasing year over year and earnings missing the Zacks Consensus Estimate [1] Financial Performance - Adjusted earnings per share were $2.33, missing the Zacks Consensus Estimate of$2.34, and down 4.9% from $2.45 in the previous year, attributed to lower adjusted operating income and higher interest expenses [4] - Net sales reached$485.9 million, exceeding the Zacks Consensus Estimate of $480 million, but down 0.7$489.2 million year-over-year, primarily due to a 4.9% decline in Organic business sales [4] - The consolidated gross profit margin contracted by 40 basis points to 48.6%, influenced by a less favorable product mix and customer mix, partially offset by lower inventory obsolescence and reduced commodity costs [5] - The adjusted operating income fell 9.9% to $75 million, with the adjusted operating margin decreasing by 160 basis points to 15.4$219.8 million, mainly due to decreased sales in insulated beverageware amid competitive pressure and weaker consumer demand [8] - The Beauty & Wellness segment saw a slight increase in net sales by 0.1% to 266.1 million, driven by the acquisition of Olive & June, although Organic business sales dropped by 8% [10] Strategic Outlook - The company is not providing a fiscal 2026 outlook due to global tariff policy changes and associated uncertainties, but is focusing on diversifying production outside of China to reduce tariff-related costs to under 20% by the end of fiscal 2026 [2] - Efforts are being made to preserve margins, reduce debt, and strengthen cash flow to navigate the dynamic environment [3] Financial Position - As of the end of fiscal 2025, the company had cash and cash equivalents of 18.9 million and total debt of $916.9 million, with net cash provided by operating activities at$113.2 million and free cash flow at $83.1 million [12]