Helen of Troy Tracks Higher Start After Solid Quarter (HELE)

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Last Update: 09-Oct-18 08:56 ET

Helen of Troy (HELE 129.70, +7.00) has spiked 5.7% pre-market after beating quarterly expectations and boosting its guidance for the fiscal year. The pre-market strength puts the stock just below its record high (134.26) from October 1.

The consumer company, which owns brands like OXO, Braun, Honeywell Plugged In, Pur, Vicks, and Revlon, among others, reported above-consensus second quarter earnings of $1.98 per share on a 14.1% year/year spike in revenue to $393.5 mln, which was also better than expected.

The company expressed confidence in the operating environment for the remainder of the fiscal year by increasing its earnings and revenue guidance. The company expects that earnings for the fiscal year will be between $7.65 per share and $7.90 per share, up from a previous outlook for earnings between $7.45 per share and $7.70 per share. Revenue is expected between $1.54 bln and $1.56 bln, up from the previous forecast for sales between $1.49 bln and $1.51 bln.

Looking at the details of the company's guidance, net sales of Housewares are expected to grow between 9.0% and 11.0% while Health & Home net sales are expected to increase between 5.0% and 7.0%. Net sales in the Beauty segment are expected to decline in the low- to mid-single digits.

Returning to second quarter results, Leadership Brands revenue grew 20.5% year/year while online sales increased 16.1%, making up 15% of total sales. The company was pleased with sales trends at retail stores and healthy customer replenishment in majority of businesses.

Health & Home net sales grew 20.3% year/year to $175.78 mln while segment operating margin improved to 10.5% from 9.6%. Higher sales of seasonal products, online growth, shelf space gains, and growth in international sales supported the growth rate.

Housewares net sales jumped 19.4% year/year to $137.50 mln while segment operating margin remained at 22.4%. Point of sale growth with existing domestic customers, higher sales in the club channel, increased online sales, new product introductions, and higher customer inventory levels fueled the revenue growth rate.

Beauty segment net sales declined 4.2% to $83.76 mln while segment operating margin weakened to 12.8% from 13.6%. Total adjusted operating margin improved to 15.1% from 14.8% one year ago. The decline in sales was due to lower brick and mortar sales and rationalization of certain brands and products, which offset higher online sales.