Helen of Troy Raises Fiscal 2027 Profit and Cash-Flow Outlook
Adjusted diluted EPS guidance moved to $3.60–$4.15 and free cash flow to $120–$140 million after a $440.9 million sales quarter.
Helen of Troy Limited (HELE) raised its fiscal 2027 earnings and cash-generation outlook after a second quarter in which sales growth cooled and Beauty & Wellness reversed to a decline, while adjusted operating margin recovered from a first-quarter dip.
The global consumer products company, which licenses brands including OXO, Hydro Flask, Osprey and Vicks, reported consolidated net sales of $440.9 million for the three months ended August 31, 2026, up 2.1% from a year earlier. That pace slowed from 8.2% growth in the first quarter of fiscal 2027, after a 3.3% decline in the fourth quarter of fiscal 2026.
Home & Outdoor remained the growth engine. Segment net sales rose 9.2% to $227.9 million, a modest sequential slowdown from 9.5% growth to $194.9 million in the prior quarter. The increase reflected growth across all brands, driven by strong demand for technical, travel and lifestyle packs, higher international sales, assortment and distribution gains, increased closeout channel sales and new product launches. Home & Outdoor operating income was $24.1 million, or 10.6% of segment sales, versus an operating loss of $72.6 million a year earlier that included $85.5 million of pre-tax asset impairment charges. Adjusted operating income in the segment was $28.0 million, or 12.3% of sales.
Beauty & Wellness net sales fell 4.5% to $213.0 million after 7.0% growth to $207.2 million in the prior quarter. The decline reflected softer demand in hair appliances and prestige hair care, including consumer price sensitivity, competition, reduced retail replenishment and lower closeout sales, and a decrease in water filtration. Those declines were partially offset by higher heater and thermometer sales, nail-care growth and new product launches. Beauty & Wellness posted an operating loss of $1.1 million, or (0.5)% of sales, versus an operating loss of $243.1 million a year earlier that included $240.9 million of pre-tax impairment charges. Adjusted operating income in the segment was $10.0 million, or 4.7% of sales.
Gross profit margin expanded 800 basis points to 52.2% from 46.0% in the prior quarter. The increase primarily reflected tariff refunds, net of higher tariff costs, totaling about 560 basis points, and lower retail trade and promotional expense, offset by inflationary product costs and a less favorable inventory obsolescence impact. Second-quarter results included gross pre-tax tariff refunds of $26.9 million, of which about $23 million was reinvested, producing a net pre-tax benefit of about $4.0 million and a diluted EPS benefit of about $0.12.
GAAP operating margin was 5.2%, versus (73.1)% a year earlier, which included $326.4 million of non-cash asset impairment charges. Adjusted operating margin was 8.6%, versus 6.2% a year earlier. Adjusted EBITDA was $49.4 million, or an 11.2% margin, versus $36.2 million, or 8.4%, a year earlier. GAAP diluted earnings were $0.19 a share, versus a diluted loss of $13.44 a year earlier. Adjusted diluted EPS was $0.79, versus $0.59 a year earlier. Interest expense was $10.9 million. Net cash provided by operating activities was $57.1 million.
Cash and cash equivalents were $22.6 million. Inventory was $480.3 million. Total short- and long-term debt was $672.6 million. Beginning in the quarter, the company began adjusting divestiture litigation costs related to the 2021 HRB Brands personal-care sale in its non-GAAP measures.
For fiscal 2027, Helen of Troy narrowed the consolidated net sales outlook to $1.768 billion to $1.822 billion, or 1.0% to 2.0% growth, from $1.759 billion to $1.831 billion. It raised GAAP diluted EPS to $3.63 to $4.26 and adjusted diluted EPS to $3.60 to $4.15. Adjusted EBITDA guidance moved to $203 million to $210 million, operating cash flow to $163 million to $179 million, and free cash flow to $120 million to $140 million. Home & Outdoor sales are now seen at $851 million to $876 million; Beauty & Wellness at $917 million to $946 million. The outlook includes an estimated pre-tax benefit of about $80.5 million from Phase 1 through 3 tariff refunds, with the company planning to reinvest 83% to 88% of those refunds. Capital expenditures are now expected at $39 million to $43 million. Net leverage is targeted at 2.7 times or less by year-end.