Helen of Troy Reports 10.8% Sales Decline, $407 Million Operating Loss

Helen of Troy Limited has reported its first quarter fiscal 2026 results, revealing a significant decline in net sales and a substantial GAAP diluted loss per share. The company's consolidated net sales revenue decreased by 10.8%, totaling $371.7 million compared to $416.8 million in the previous year. This decline was primarily driven by a 17% drop in organic business revenue, particularly in the Beauty & Wellness and Home & Outdoor segments. The company faced challenges such as lower sales of thermometers, fans, and hair appliances, as well as a decrease in home and insulated beverageware sales.

Despite these setbacks, the acquisition of Olive & June contributed positively to net sales, adding $26.8 million. However, the gross profit margin decreased to 47.1% from 48.7% due to factors like consumer trade-down behavior and a less favorable brand mix. The company also reported an operating loss of $407 million, largely due to non-cash asset impairment charges amounting to $414.4 million.

Comparing the actual performance against expectations, the company fell short of the anticipated EPS of $0.91, reporting an adjusted diluted EPS of $0.41. Revenue expectations were also not met, as the actual figure of $371.7 million was below the expected $399.33 million. These results highlight the impact of ongoing challenges, including tariff-related pressures and shifting consumer behaviors.

Looking ahead to the second quarter of fiscal 2026, Helen of Troy has provided a cautious outlook, reflecting the uncertainties in the global market. The company expects consolidated net sales to range between $408 million and $432 million, indicating a potential decline of 14.0% to 8.9% compared to the second quarter of fiscal 2025. This outlook considers continued softness in consumer spending, a more promotional market environment, and the impact of tariffs.

Helen of Troy anticipates a GAAP diluted EPS between $0.56 and $0.68, with an adjusted diluted EPS forecasted to fall between $0.45 and $0.60. The company is actively working to mitigate the impact of tariffs by diversifying production outside of China and implementing cost reduction measures. These efforts aim to reduce the net tariff impact on operating income to less than $15 million.

Despite the challenges, Helen of Troy remains committed to strategic growth investments, albeit with a disciplined approach due to tariff volatility. The company is focused on optimizing its marketing, promotional, and product development strategies to capture opportunities with the highest returns. As it navigates the current economic landscape, Helen of Troy is determined to create a more agile and efficient organization, poised for future success.