Helen of Troy (HELE) Q1 FY27 earnings call: guidance and Q&A

When will tariff refunds hit the P&L, and where are the best opportunities for reinvestment to drive near-term growth?

Phase 1 refunds ($7M remaining) are expected in Q2, but future phases are uncertain and could spread into FY28. A spread-out cadence allows for better execution of reinvestment. Reinvestment focuses on talent, strategic innovation, omnichannel acceleration, supply chain, and agile international market entry.

“If it's all in 1 quarter, it's very hard to match up the spending with the benefit if it's spread out over a period of time, I think we can really do well to invest to benefit and improve the health of our businesses.”

asked by Bob Labick · answered by Brian Grass

Can you unpack the revenue risk from expected supply disruption, and is it just conservatism or based on clear line of sight?

The supply risk is approximately $15M, stemming from 2-3 pinch points, exacerbated by recent geopolitical events. The outlook embeds a conservative estimate, acknowledging the volatility of the situation.

“it's really 2 or 3 pinch points or being -- we're trying to be conservative and hopefully appreciate that as volatile. I mean, 1 day, 2 days ago, I would have said things are moderating, but up until last night, things going in the other direction.”

asked by Peter Grom · answered by Brian Grass

Would including all phases of tariff refunds be enough to offset the expected inflation, as originally implied in April?

Yes, if all due tariff refunds are collected, the benefit would likely be greater than the inflationary cost pressure for fiscal '27.

“In terms of impact of fiscal '27, I would expect if we're able to collect all of the tariff refunds that we are do that the tariff refund benefit would be greater than the inflationary cost pressure. Yes, that's a reasonable assumption.”

asked by Peter Grom · answered by Brian Grass

What is the confidence level in holding current pricing given the tough consumer backdrop and promotional environment, and what's embedded for the promotional backdrop?

Approximately 80% of desired pricing has been passed through and is largely holding, with continuous monitoring. POS dollar growth is positive, and elasticity assumptions were built into the outlook, with current performance better than initially assumed.

“But for the most part, we feel like 80% of where we wanted to get pricing we were able to pass it through, and we're competing in those markets.”

asked by Olivia Tong Cheang · answered by George Uzzell

Can you discuss the confidence in the recovery path given the flattish sales assumption for the next three quarters after Q1, and what underlying category growth is embedded?

Q1 had a very low comparison base due to prior year tariff disruption, which moderates in later quarters, explaining the decelerating growth. The forecast is based on current POS trends and known innovation/distribution, not aggressive category expansion assumptions, making it a very supportable forecast.

“We've kind of kept current state with respect to that and are really using current POS trends to project the remainder of the year, which I think is the right thing to do.”

asked by Olivia Tong Cheang · answered by Brian Grass

Where is the expanded distribution in Home & Outdoor and insulated beverages, and did core sales grow in existing channels?

In Home, Walmart distribution is a driver. For Hydro Flask, expansion is with DICK'S Sporting Goods and Target planogram resets. Good e-commerce momentum is also seen across these brands, including Amazon.

“in home, it's Walmart distribution, that expansion that's driving it. And then we're also seeing good growth on Amazon part of that due to the prime day shift. And then on Hydro Flask, the distribution expansion is with DICK'S Sporting Goods, and then we also had a target planogram reset”

asked by Susan Anderson · answered by Brian Grass

Are the declines in core beauty brands (excluding Olive & June) moderating, and is the trend line improving sequentially?

While not yet where the company wants to be, there are "bright spots" and indicators of improving POS trends in the core beauty brands.

“We're still not where we want to be if you look at the rest of that. If you take Beauty carve out all of the June from Beauty, we're still not where we want to be, but we do see some bright spots in terms of trend line improving with respect to POS.”

asked by Susan Anderson · answered by Brian Grass

How is the company thinking about SG&A investment and its cadence going forward, especially with increased brand investment?

The base plan assumes a 40 bps increase in SG&A. Any overperformance or tariff refund benefits would be largely reinvested, significantly increasing SG&A. The exact margin impact is uncertain due to the unpredictable timing of future tariff refunds, but the intent is to deploy a high proportion of benefits.

“We're sticking with our 40 basis point increase in the base plan. And then when we get the tariff refunds, we'll be looking to amp that up significantly can't tell you exactly what the margins will look like, but hopefully, you've got enough direction.”

asked by Susan Anderson · answered by Brian Grass