Helen Of Troy Stock Earnings Reports

Helen of Troy reported a challenging Q2 FY2026 with consolidated net sales down 8.9% (organic decline ~16%) and adjusted EPS of $0.59 vs. $1.21 prior year. Tariff headwinds (U.S. tariffs on China) materially disrupted direct import orders, pressured margins, and increased inventory/cash outflows. Management highlighted progress on five priorities: restoring stakeholder confidence, improving go-to-market effectiveness, refocusing innovation, enforcing fundamentals, and reinvigorating culture. Operational bright spots included double-digit growth at Hot Tools, Curlsmith, and Osprey; strong performance from Olive & June (reported revenue $33.4M in Q2 and expected FY contribution ~$130–$137M total, incremental ~$109–$112M); encouraging DTC performance (+15% YoY); and improved distribution/service levels. Management has realigned commercial teams around brands, expedited supplier diversification away from China, implemented targeted price increases with key retailers (mostly effective by September), and continues cost-reduction efforts. GAAP operating loss was driven by large non-cash impairments; adjusted operating margin compressed ~360 bps to 6.2%. Inventory ended at $528.9M (including tariff-layered costs and Olive & June inventory). Total debt $893.2M; net leverage ~3.5x. Company remains in covenant compliance but expects to proactively seek covenant flexibility. Guidance: FY2026 net sales $1.74B–$1.78B (decline ~8.8%–6.7%); consolidated adjusted EPS $3.75–$4.25 (decline ~47.7%–40.7%). Q3 guidance: net sales $491M–$512M; adjusted EPS $1.55–$1.80. Management (new CEO Scott Azel) emphasized a multi-quarter renewal focused on people, simplifying decision-making, prioritizing high-potential brands and innovation, improving working capital and balance sheet productivity, and using cash first for core investment and debt reduction before pursuing M&A or returns.