Helen of Troy Limited (NASDAQ:HELE) stock tumbled Thursday after the consumer products company reported weaker profitability and lowered its fiscal 2026 earnings outlook, despite revenue topping expectations.
The company reported third-quarter adjusted earnings per share of $1.71, in line with the analyst consensus estimate. Quarterly sales of $512.829 million (down 3.4% year over year) outpaced the Street view of $503.587 million.
The lower sales were driven by a decrease from Organic business of $57.1 million, or 10.8%. The Organic business decrease was primarily driven by a decline in insulated beverageware, hair appliances, prestige hair care products, thermometers, humidifiers, and water filtration.
Consolidated gross profit margin decreased 200 basis points to 46.9% primarily due to the net unfavorable impact of higher tariffs and a less favorable inventory obsolescence impact year-over-year.
In the quarter under review, consolidated operating loss was $8.4 million, or (1.6)% of net sales revenue, compared to consolidated operating income of $75.1 million, or 14.2% of net sales revenue.
Adjusted EBITDA was $75.6 million, compared to $96.8 million. Adjusted EBITDA margin was 14.7% compared to 18.2%.
Cash and cash equivalents fell to $27.1 million from $40.8 million, while inventory rose to $505.3 million from $450.7 million.
Inventory included $35 million in higher tariff costs, and total short- and long-term debt increased to $892.4 million from $733.9 million.
Outlook
Helen of Troy cut its fiscal 2026 adjusted EPS forecast to $3.25 to $3.75 from $3.75 to $4.25. The new range sits below the $4.02 analyst estimate.
The company also narrowed its fiscal 2026 sales outlook to $1.758 billion to $1.773 billion from $1.739 billion to $1.780 billion. That compares with the $1.763 billion consensus estimate.
HELE Price Action: Helen of Troy shares were down 12.22% at $18.50 at the time of publication on Thursday. The stock is trading near its 52-week low of $17.01, according to Benzinga Pro data.
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