Release Date: July 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Helen Of Troy Ltd (HELE, Financial) is focusing on five key priorities to rebuild its platform for profitable growth, including restoring confidence within the organization and improving go-to-market effectiveness.
- The company is seeing positive underlying improvements, such as US point-of-sale unit growth in 8 out of 11 key brands and strong category growth in areas like prestige hair liquids and air purifiers.
- Helen Of Troy Ltd (HELE) reported strong free cash flow of $45 million compared to $16 million in the same period last year.
- The company is making significant progress on tariff mitigation plans, including building out Southeast Asia sourcing capabilities and implementing strategic price increases.
- Helen Of Troy Ltd (HELE) is expanding distribution for brands like Hydro Flask and Osprey in the EMEA and Asia Pacific regions, indicating growth potential in international markets.
Negative Points
- Q1 results were well below expectations, with a 10.8% consolidated revenue decline, primarily due to tariff-related disruptions.
- The company is experiencing consumer trade-down behavior, with average price compression of 3% to 4% in the US business, impacting revenue and profitability.
- Tariff-related impacts are expected to persist into the second quarter, contributing to continued revenue challenges.
- Helen Of Troy Ltd (HELE) is not providing a full-year outlook due to ongoing uncertainty related to tariffs and their potential impact on revenue and costs.
- The company is facing broader demand softness across categories, driven by shifts in consumer behavior and economic uncertainty, leading to cautious retailer ordering patterns.
Q & A Highlights
Q: Can you provide more details on your pricing strategy and how you are considering elasticity in the current environment?
A: Brian Grass, Interim CEO: We are implementing average price increases across our portfolio ranging from 7% to 10%, with individual product increases varying from 0% to 15%. We are making conservative elasticity assumptions due to the challenging environment. Tracy Scheuerman, Interim CFO, added that pricing is selective by brand, considering the category's nature and country of origin.
Q: How should we think about the long-term earnings power of the business given the current challenges?
A: Brian Grass, Interim CEO: The first half of the fiscal year is heavily impacted by tariffs, but we expect improvements in the second half due to pricing actions and other mitigations. The existing consensus estimate for the full year is not unreasonable, but the cadence of results will differ, with more headwinds in the first half and tailwinds in the second half.
Q: Can you elaborate on the retail distribution gains expected in the second half?
A: Tracy Scheuerman, Interim CFO: We are expanding distribution in Walmart for blood pressure monitors and increasing distribution for Hydro Flask and Osprey in EMEA and Asia Pacific regions. There are some reductions in footprint within the Outdoor segment and adjusted retail levels in Beauty appliances, but overall, we expect net distribution gains.
Q: What is the status of the CEO search process, and what qualities is the Board looking for in the next leader?
A: Brian Grass, Interim CEO: The Board is leading the search, focusing on candidates with experience in brand building and growth. They seek someone who believes in the growth potential of the business and can drive it forward. Meanwhile, we are not standing still and are focusing on product-driven growth.
Q: How are your brands performing at retail, and what is the consumer response?
A: Brian Grass, Interim CEO: We saw positive unit point-of-sale growth in 8 out of 11 brands, indicating consumer interest. However, dollar POS was down, reflecting consumer trade-down behavior. We need to improve dollar performance, but unit growth is a positive leading indicator.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
