EL PASO, Texas - Helen of Troy Limited (NASDAQ: HELE), a global designer, developer, and marketer of consumer products, reported a disappointing start to its fiscal year 2025, with first-quarter earnings and revenue falling short of Wall Street expectations.
The company's adjusted earnings per share (EPS) of $0.99 were significantly below the analyst estimate of $1.59. Revenue also missed the mark, coming in at $416.8 million against the consensus estimate of $445.85 million.
The company's stock plummeted by 26% following the release of these results.
Helen of Troy cited a combination of internal and external challenges that led to performance below their initial outlook. CEO Noel M. Geoffroy expressed disappointment with the quarter's results, attributing the shortfall to heightened challenges towards the end of the quarter, some of which continue to evolve.
In comparison to the same quarter last year, consolidated net sales revenue saw a decline of 12.2%, with notable decreases in sales of hair appliances, prestige hair care products, and humidifiers in the Beauty & Wellness segment. The Home & Outdoor segment also experienced a downturn, primarily due to lower replenishment orders from retail customers and issues at the company's Tennessee distribution facility.
Despite the increase in consolidated gross profit margin, which improved by 330 basis points to 48.7% compared to 45.4%, the company's operating margin declined to 7.4% from 8.6%. Additionally, the non-GAAP adjusted EBITDA margin decreased to 12.6% from 15.2%.
Looking ahead, Helen of Troy has revised its fiscal 2025 outlook, lowering its consolidated net sales to a range of $1.885-$1.935 billion, with adjusted diluted EPS now expected to be between $7.00 and $7.50. This updated guidance falls short of the analyst consensus of $8.93 for adjusted EPS and $1.98 billion for revenue.
Geoffroy remains confident in the company's long-term strategies, emphasizing the ongoing benefits of Project Pegasus, a restructuring plan aimed at delivering savings and improving efficiency. He also highlighted investments in new talent and enhanced data analytics capabilities as key factors in revitalizing the business.
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