EPS of $2.17 decreased by 32.2% from previous year
Gross margin of 48.9%
Net income of 49.62M
""We see significant growth potential in Olive & June as the team continues to build on the brand's strength in consumer obsession and breakthrough commercial and product innovation..."" - Noel Geoffroy
Helen of Troy Limited (HELE) Q3 2025 Results: Navigating a Challenging Consumer Environment
Executive Summary
Helen of Troy Limited (HELE) reported its Q3 2025 results reflecting continued challenges in consumer spending and a notably weak cough, cold, and flu season, which contributed to a net sales decline of 3.4% year-over-year to $530.7 million. Despite these challenges, the company achieved gross profit margins of 48.9%, a 90 basis point increase, indicating effective cost management strategies in place. Management expressed optimism regarding ongoing projects, particularly Project Pegasus aimed at revitalizing the brand portfolio and improving operational efficiencies. With the recent acquisition of Olive & June, the company anticipates additional growth and profitability enhancements moving forward, signaling a focus on long-term strategic initiatives.
Key Performance Indicators
Revenue
530.71M
QoQ: 11.91% | YoY:-3.44%
Gross Profit
259.33M
48.86% margin
QoQ: 20.02% | YoY:-1.69%
Operating Income
75.12M
QoQ: 115.53% | YoY:-29.75%
Net Income
49.62M
QoQ: 191.62% | YoY:-34.63%
EPS
2.17
QoQ: 189.33% | YoY:-32.19%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: $530.7 million, down 3.4% YoY
**Gross Profit**: $259.3 million, with a gross margin of 48.9% (+90bps YoY)
**Operating Income**: $75.1 million, reflecting operating income ratio of 14.2%
**Net Income**: $49.6 million, translating to EPS of $2.17, down 34.6% YoY
**Cash Flow**: Net cash provided by operating activities at $8.3 million with free cash flow of $191,000
Financial Highlights
- Revenue: $530.7 million, down 3.4% YoY
- Gross Profit: $259.3 million, with a gross margin of 48.9% (+90bps YoY)
- Operating Income: $75.1 million, reflecting operating income ratio of 14.2%
- Net Income: $49.6 million, translating to EPS of $2.17, down 34.6% YoY
- Cash Flow: Net cash provided by operating activities at $8.3 million with free cash flow of $191,000
- Debt Levels: Total debt at $734 million with a net leverage ratio of 2.35x
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
530.71M
-3.44%
11.91%
Gross Profit
259.33M
-1.69%
20.02%
Operating Income
75.12M
-29.75%
115.53%
Net Income
49.62M
-34.63%
191.62%
EPS
2.17
-32.19%
189.33%
Key Financial Ratios
currentRatio
1.92
grossProfitMargin
48.9%
operatingProfitMargin
14.2%
netProfitMargin
9.35%
returnOnAssets
1.67%
returnOnEquity
3.05%
debtEquityRatio
0.03
operatingCashFlowPerShare
$0.36
freeCashFlowPerShare
$0.01
priceToBookRatio
1.03
priceEarningsRatio
8.44
Net Income vs. Revenue
Expense Breakdown
Management Commentary
1. Consumer Spending: CEO Noel Geoffroy noted, "...continued cautious consumer spending on discretionary purchases..."
2. Operational Achievements: Highlighting operational progress, the CEO stated, "We are also pleased that our Tennessee distribution facility is running as designed..."
3. Brand Performance: "Fiscal year-to-date, we have grown our U.S. weighted distribution by 11% year-over-year," indicating effective brand positioning and channel expansion.
"We see significant growth potential in Olive & June as the team continues to build on the brand's strength in consumer obsession and breakthrough commercial and product innovation..."
â Noel Geoffroy
"We are beginning to see the benefits of that growth investment in terms of market share improvement for many of our key brands."
â Brian Grass
Forward Guidance
Management forecasts a decline in net sales for the fiscal year, now estimated between $1.888 billion and $1.913 billion, reflecting a negative outlook influenced by a weak illness season. The expected contribution from Olive & June acquisition for Q4 is anticipated to provide a slight uplift in performance, with projections of adjusted EPS for the full fiscal year between $7.15 and $7.40. Attention should be focused on seasonal fluctuations and strategic responses to market conditions.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
HELE Focus
48.86%
14.20%
3.05%
8.44%
IPAR
63.90%
25.00%
12.90%
10.32%
JJSF
33.60%
11.40%
3.87%
21.69%
HIBB
34.30%
7.90%
7.57%
7.91%
LANC
23.10%
10.90%
4.13%
29.24%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, Helen of Troy Limited presents a mixed investment outlook. While the topline revenue decline reflects current consumer trends, the strategic initiatives focused on brand revitalization and expansion into e-commerce channels present a potential rebound in performance. Future revenue growth hinges on successfully navigating through and responding to market challenges, capitalizing on acquisition synergies, and effectively executing against their operational improvements. Investors should monitor the performance of the Olive & June integration and the recovery of seasonal products in the forthcoming quarters.
Key Investment Factors
Growth Potential
The acquisition of Olive & June presents substantial growth potential, especially in the beauty segment, with expected synergies in distribution and product innovation.
Profitability Risk
Risks include vulnerability to macroeconomic factors impacting consumer spending patterns, particularly in discretionary segments, and dependency on a normalized cough, cold, and flu season, significantly affecting Wellness product performance.
Financial Position
With a net leverage ratio of 2.35x and total debt of $734 million, the financial position remains stable yet requires monitoring given rising interest rates and operational flexibility needed for potential market shifts.
SWOT Analysis
Strengths
Strong brand portfolio with significant market share in the Home & Outdoor and Wellness segments.
Improved gross margins due to effective cost management strategies and Project Pegasus efforts.
Weaknesses
Declining net sales in the Beauty & Wellness sector, particularly during a weak cough and cold season.
High dependency on seasonal products which are subject to fluctuations in consumer demand.
Opportunities
Expansion of distribution channels and market penetration, particularly through e-commerce.
Potential revenue increases from the Olive & June acquisition, enhancing the beauty portfolio.
Threats
Challenging macroeconomic conditions leading to cautious consumer spending on non-essential goods.
Increased competition in the beauty and household segments, potentially impacting market share.