Shares of Helen of Troy Limited (NASDAQ:HELE) tumbled 22.26% in premarket trading after the consumer products firm reported a sharp drop in first-quarter earnings that missed expectations, citing significant tariff-related headwinds.
The company posted adjusted earnings of $0.41 per share, well below Wall Street’s consensus estimate of $0.93, as tariffs weighed heavily on both margins and topline performance.
Revenue declined 10.8% year-over-year to $371.7 million, missing analysts’ forecast of $400.36 million. According to management, tariffs accounted for around 8 percentage points of the revenue contraction. Organic revenue fell 17%, mainly due to declining sales of thermometers, fans, and hair appliances within the Beauty & Wellness division and weaker demand for home and beverageware products in the Home & Outdoor category.
Profitability also took a hit: gross margin slipped 160 basis points to 47.1%, while the adjusted operating margin dropped to 4.3% from 10.3% a year ago. The company also recorded non-cash impairment charges of $414.4 million for the quarter.
“The first quarter was challenging, with tariff-related impacts making up approximately 8 percentage points of the 10.8% consolidated revenue decline,” said interim CEO Brian L. Grass. “That said, we are encouraged by underlying business improvements we saw in the quarter including U.S. point-of-sale unit growth in 8 out of our 11 key brands, growth in our DTC business, Osprey, and Curlsmith, and contribution from Olive & June ahead of our expectations.”
Looking forward, Helen of Troy offered a downbeat outlook for the second quarter. It expects revenue between $408 million and $432 million, well below the $475 million consensus, and adjusted EPS of $0.45 to $0.60, far short of analyst projections of $1.21.
On a positive note, the company said it is making progress in reducing its exposure to tariffs. Helen of Troy now anticipates its net tariff impact on operating income in fiscal 2026 to be less than $15 million, based on current duties. It also aims to lower its cost of goods sold subject to China tariffs to below 25% by the end of that fiscal year.
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