Helen of Troy Ltd. (HELE) shares plummeted 9.5% in the pre-market trading on Wednesday after the company reported mixed third-quarter results and downgraded its full-year outlook, citing a weak consumer spending environment and softness in its Beauty segment.

For the third quarter ended November 30, 2024, the company reported:

• Net sales decreased by 3.4% year-over-year to $530.7 million, missing analysts' estimates of $534.3 million.
  • Home & Outdoor segment sales grew 4.3%, driven by growth across all three brands and strength in international markets.
  • Beauty & Wellness segment sales declined 9.3%, impacted by a weak illness season globally, lower hair appliance sales due to softer consumer demand and increased competition, and decreased water filtration sales.
• Adjusted earnings per share (EPS) of $2.67 beat expectations of $2.60, driven by lower commodity and product costs, partly due to Project Pegasus initiatives.
• Adjusted operating margin expanded 30 basis points to 16.6%, driven by lower annual incentive compensation expense and favorable inventory obsolescence expense, partially offset by higher marketing expense.

Looking ahead, Helen of Troy revised its full-year fiscal 2025 outlook:

• Net sales guidance narrowed to $1.888 billion - $1.913 billion, implying a decline of 4.6% - 5.8%, compared to the previous range of a 3.5% - 6% decline.
• Adjusted EPS guidance lowered to $7.15 - $7.40, from the previous range of $7.00 - $7.50.
• Adjusted EBITDA guidance narrowed to $292 million - $295 million, compared to the previous range of $287 million - $297 million.

The company cited lingering inflation, continued consumer spending softness, especially in certain discretionary categories, increased macro uncertainty, a more promotional environment, and retailers' close inventory management as reasons for the lowered outlook.