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Omar Venerio
Omar Venerio
Articles (1575) 

US Market Indexes Higher on Wednesday

Helen of Troy beats earnings estimates

U.S. stocks were bullish on Wednesday after Federal Reserve Chair Jerome Powell suggested the central bank will cut interest rates in the near term. The Dow Jones Industrial Average gained 0.29% to 26,860, the S&P 500 index rose 0.45% to 2,993 and the Nasdaq Composite Index swelled 0.75% to 8,202.

Shares of Helen of Troy Ltd. (NASDAQ:HELE) gained more than 10% on Wednesday after the company posted first-quarter results. Revenue grew 6.1 % from the prior-year quarter to $376.3 million, beating analysts’ expectations by $24.76 million. Earnings of $2.06 per share topped estimates by 37 cents.

By segment, leadership brand net sales grew 7.4%, online channel net sales increased 28% and core business sales rose 6.8%.

“This quarter marks a great start to fiscal 2020 and Phase II of our Transformation, which we recently unveiled during our Investor Day on May 21," CEO Julien R. Mininberg said. "Consolidated core business sales grew 6.8% and adjusted diluted EPS grew 10.2%, both well ahead of our expectations given the especially high year-ago base.”

The GAAP operating income was $47.2 million, or 12.5% of net sales, up from $43.3 million, or 12.2% of net sales, in the prior-year quarter. The non-GAAP adjusted operating income inched up 6.9% to $59.3 million, or 15.8% of net sales, from $55.5 million, or 15.6% of net sales, for the same period last year.

The consolidated gross profit margin decreased 50 basis points to 40.8% due to the negative impact of tariff increases, foreign currency fluctuations and higher freight expenses.

Further, adjusted earnings before interest, taxes, depreciation and amortization rose 6.6% to $63.3 million.

Looking ahead to fiscal 2020, the company expects consolidated net sales between $1.59 billion and $1.62 billion, with Housewares net sales growth of 6% to 8%, Health & Home net sales growth of 2% to 3% and a low single-digit decline in Beauty net sales. Also, it projects consolidated GAAP diluted earnings per share between $6.80 and $6.97 and non-GAAP adjusted diluted earnings between $8.40 and $8.65 per share.

During the quarter ended March 31, Ken Fisher (Trades, Portfolio) reduced his holding by 18.03% to 628,423 shares. Pioneer Investments (Trades, Portfolio) also trimmed its position by 15.38% to 2,200 shares. On the other hand, Jeremy Grantham (Trades, Portfolio) boosted his holding by 792.71% to 220,500 shares. Jim Simons (Trades, Portfolio)' Renaissance Technologies established a position, buying 122,710 shares.

Gainers

Losers

Global markets

The main European stock markets traded lower. The U.K.'s FTSE 100 dipped 0.08%, France's CAC 40 lost 0.08%, Germany's Dax slid 0.51% and Spain's IBEX 35 fell 0.23%.

In Asia, Japan's Nikkei 225 slipped 0.15%, India’s BSE Sensex dropped 0.45%, Hong Kong's Hang Seng advanced 0.31% and China's Shanghai Composite retreated 0.44%.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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