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    HELE
    Earnings call· May 2026(Q1 FY27)

    HELEN OF TROY Q1 FY27 earnings call HELE

    Jul 8, 2026 Source

    Executive summary

    Helen of Troy Q1 FY27 — Sales Ahead of Expectations, Reinvestment in Growth

    Helen of Troy delivered Q1 FY27 sales ahead of expectations, driven by strong performance in both Home & Outdoor and Beauty & Wellness segments. The company is executing a "growth-first" strategy, reinvesting overperformance into brands, innovation, and people, while navigating a dynamic operating environment marked by consumer pressure and supply chain volatility. Management remains focused on operational discipline and strategic investments to build long-term momentum.

    Highlights

    4

    • Consolidated sales increased 8.2%, favorable to expectations.

    • Home & Outdoor sales increased 9.5% with broad-based growth.

    • Beauty & Wellness sales increased 7%, outperforming expectations.

    • Net leverage ratio decreased to 3.48x from 3.87x at the end of Q4.

    Concerns

    4

    • Gross profit margin decreased 110 basis points to 46% due to tariffs and inventory obsolescence.

    • Adjusted operating margin decreased 30 basis points to 4% due to tariffs and higher investment.

    • Full-year outlook reflects revenue risk of approximately $15M from expected supply disruption.

    • Cost inflation for the remainder of the year is expected to more than offset the $9.2M Phase 1 tariff refunds.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year FY27 Net Sales
    $1.759B to $1.831B
    high materiality
    Medium
    Full-year FY27 Home & Outdoor Net Sales
    $859M to $884M
    medium materiality
    Medium
    Full-year FY27 Beauty & Wellness Net Sales
    $900M to $947M
    medium materiality
    Medium
    Full-year FY27 Adjusted EBITDA
    $190M to $197M
    high materiality
    Medium
    Full-year FY27 Adjusted EPS
    $3.25 to $3.75
    high materiality
    Medium
    Full-year FY27 Free Cash Flow
    $85M to $100M
    medium materiality
    Medium
    Full-year FY27 Capital Expenditure
    increased by $2M
    medium materiality
    Medium
    First Half FY27 Sales Growth
    low to mid-single digits
    medium materiality
    Medium
    Second Half FY27 Sales Growth
    low single-digit decline
    medium materiality
    Medium
    First Half FY27 Adjusted EPS Contribution
    roughly 20%
    low materiality
    Medium
    Second Quarter FY27 Adjusted EPS Contribution
    roughly 15%
    low materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Home & Outdoor
    Broad-based growth across all three brands in the segment.
    Osprey growth driven by improvements in international distribution network and e-commerce momentumOXO benefited from lapping prior year tariff-related disruption, strong point-of-sale trends and expanded brick-and-mortar distributionHydro Flask growth reflects expanded retail distribution, inventory optimization and e-commerce momentum
    		—9.5%——
    Beauty & Wellness
    Growth in both Beauty and Wellness portfolios, with some core beauty brands facing continued softness.
    Wellness portfolio outperformed expectations driven by growth across Braun, Vicks, Honeywell and PUR, due to lapping prior year tariff-related disruption, solid point of sale and expanded distributionOlive & June led with strong growth supported by expanded distribution, continued innovation and strong consumer engagementGains partially offset by continued softness in some core beauty brands, reflecting ongoing point-of-sale pressure and pricing elasticity impacts
    		—7%——
    International
    Overall growth driven by Osprey and wellness, but impacted by softer demand in other categories.
    Growth driven primarily by Osprey's improved distribution network and broad-based strength across the wellness portfolioPartially offset by softer consumer demand in Kitchenware and hair appliances amid a competitive retail environment
    		—1.1%——

    Operational metrics

    11
    Inventory
    $467M$17M decrease from prior year
    Q1 FY27

    Despite incremental tariff costs in inventory, overall inventory decreased.

    Total Debt Reduction
    $716M
    Q1 FY27

    Reduced total debt using proceeds from the sale of a distribution facility.

    Net Leverage Ratio
    3.48xcompared to 3.87x at the end of Q4
    Q1 FY27

    Decreased sequentially due to debt reduction.

    Phase 1 Tariff Refunds (Q1 recognized)
    $1.8M
    Q1 FY27

    Pretax benefit recognized for Phase 1 tariff refunds estimated to be collectible.

    Phase 1 Tariff Refunds (FY27 estimate)
    $9.2M
    FY27

    Estimated pretax benefit for Phase 1 tariff refunds for the full fiscal year.

    EPA Tariffs Paid
    $71M
    prior periods

    Tariffs paid that were not included in the Phase 1 refund process, expected to be subject to future refunds.

    SG&A Ratio
    31%compared to 45.1% in same period last year
    Q1 FY27

    Significant decrease driven by a one-time gain.

    Adjusted Operating Margin
    4%decreased 30 bps
    Q1 FY27

    Impacted by tariffs and investment, partially offset by efficiencies.

    Gross Profit Margin
    46%decreased 110 bps
    Q1 FY27

    Primary drivers of compression were tariffs and inventory obsolescence.

    Retailer Order Pull Forward
    $4M to $5M
    Q1 FY27

    Benefited Q1 sales results, pulled from Q2.

    SG&A Investment Increase (Base Plan)
    40 bps
    FY27

    Consistent with original outlook, represents an increase in investment.

    Industry KPIs

    4
    MetricValueDetails
    Foreign exchange impactunfavorable Chinese yuan fluctuations
    Full year guidance revisionsNet sales raised; Adjusted EBITDA, Adjusted EPS, Free Cash Flow maintained; Capital expenditure increased
    Tariff trade impact by segment$1.8M (Q1); $9.2M (FY27 estimate)USD
    Segment revenue operating income mixHome & Outdoor sales increased 9.5%; Beauty & Wellness sales increased 7%; International sales increased 1.1%%

    Product announcements

    4
    ProductTypeDetails
    Osprey Daylight and Transporter Expandable Travel Packslaunch
    OXO Pet Category Productsexpansion
    Braun Blood Pressure Monitorslaunch
    Olive & June Star Wars Collaborationlaunch

    Deals & partnerships

    1
    Not stateddivestiture$55M

    Sale of a distribution facility, proceeds used to lower outstanding borrowings.

    Risks & headwinds

    5
    Consumer Pressureongoing

    softer and more selective discretionary demand

    Mitigation: focused on innovation, value positioning, and operational discipline.

    Volatile Cost Environment / Inflationremainder of FY27

    increases in commodity inputs, unfavorable Chinese yuan fluctuations, increased inbound and outbound freight expense, and higher cost of secured goods to avoid supply disruption. Expected to more than offset $9.2M Phase 1 tariff refunds.

    Mitigation: using tariff refund benefits to mitigate costs, disciplined approach to capital allocation, working capital efficiency.

    Geopolitical and Supply Chain Disruptionremainder of FY27

    revenue risk from expected supply disruption of approximately $15M (from 2-3 pinch points)

    Mitigation: securing goods to avoid disruption, conservative outlook embedded in guidance.

    Retailer Behaviorongoing

    cautious retailer behavior and elevated promotional intensity

    Mitigation: improving revenue quality, deliberate product/channel mix, consistent pricing/promotion.

    Pricing ElasticityQ1 FY27 and ongoing

    pricing elasticity impacts in some core beauty brands

    Mitigation: continuous monitoring, potential adjustments to price mix.

    Q&A highlights

    8

    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

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Pillars and Operating Model Evolution

    Helen of Troy is focused on three strategic pillars: consumer-first innovation, commercial and operational excellence, and people and culture. The company is reshaping its operating model by designating five dedicated segment general managers with full ownership of brand portfolios and three geographic general managers to accelerate brand development beyond North America. This aims to bring decision-making closer to the consumer, enhance ownership, and leverage existing international structures without materially increasing operating costs.

    02

    Commercial and Operational Discipline

    The company is strengthening commercial and operational fundamentals through disciplined pricing strategies, which are largely holding in the market despite some elasticity. Efforts include improving revenue quality by optimizing product and channel mix, reducing exposure to lower-margin channels, and shifting towards higher-value products. Additionally, the company is enhancing e-commerce discipline, digital shelf effectiveness, and building a more connected approach to demand planning and inventory management.

    03

    Reinvestment Strategy and Tariff Refunds

    Helen of Troy is adopting a "growth-first" model, committing to reinvesting overperformance and potential tariff refunds back into the business. Key areas for reinvestment include talent development, strategic innovation, omnichannel acceleration, supply chain improvements, and agile international market entry. The company expects to recognize a pretax benefit of approximately $9.2 million from Phase 1 tariff refunds for FY27, with future phases potentially providing additional upside that would also be largely reinvested.

    04

    Dynamic Operating Environment and Cost Pressures

    The company continues to navigate a challenging macro environment characterized by persistent consumer pressure🌐, cautious retailer behavior, and elevated promotional intensity. Heightened geopolitical and supply chain disruption🌐s, particularly from the Middle East conflict, are exacerbating cost inflation from commodity inputs, unfavorable Chinese yuan fluctuations, and increased freight expenses. These rising costs are expected to more than offset the Phase 1 tariff refund benefits for the remainder of the year.

    05

    Balance Sheet and Capital Allocation

    Helen of Troy reduced its total debt by $716 million in Q1 FY27, utilizing proceeds from the sale of a distribution facility, which lowered its net leverage ratio to 3.48x from 3.87x. While free cash flow was slightly negative in the quarter due to tariff payments and incentive compensation, the company maintains its full-year free cash flow outlook. Planned capital expenditures are being increased by $2 million to support key product development and commercial initiatives, reflecting a disciplined approach to capital allocation.

    AI-generated summary of the company’s earnings call. Not investment advice.