Helen of Troy Limited (NASDAQ:HELE) saw its shares fall nearly 10% in pre-market trading on Thursday after the group lowered its full-year profit outlook, even as it delivered third-quarter results that came in ahead of expectations.
The consumer products maker reported adjusted earnings of $1.71 per share for the quarter, slightly above the consensus estimate of $1.69. Revenue reached $512.8 million, topping forecasts of $502.42 million. Despite the earnings beat, overall net sales declined 3.4% compared with the same period last year, while adjusted operating margin narrowed sharply to 12.9% from 16.6% a year earlier.
Helen of Troy cut its full-year adjusted earnings guidance to a range of $3.25 to $3.75 per share, well below the market consensus of $4.02. Revenue guidance was left unchanged at $1.758 billion to $1.773 billion. The company said the downward revision reflects intensifying pressure from tariffs, which it now expects will reduce operating income by nearly $30 million this fiscal year, up from a prior estimate of $20 million.
Commenting on the results, chief executive officer G. Scott Uzzell said: “We delivered third quarter results in line with our outlook and are making progress toward stabilizing the business despite the challenging external environment.”
He added: “We grew revenue in key brands – OXO, Osprey, and Olive & June – expanded Organic DTC sales and generated positive free cash flow despite tariff-related headwinds.”
By division, the Home & Outdoor segment posted a 6.7% decline in net sales to $229.6 million, while the Beauty & Wellness segment recorded a modest 0.5% drop to $283.2 million. Organic sales fell 10.8%, partly offset by a 7.1% contribution from the recent Olive & June acquisition.
During the quarter, Helen of Troy also booked non-cash asset impairment charges of $65.9 million, largely tied to the prolonged weakness in its share price. This resulted in a GAAP loss of $3.65 per share.
Looking ahead, the company said it is continuing to roll out cost-cutting initiatives and diversify its supplier base to limit the impact of tariffs. Management aims to reduce exposure to China-related tariffs to between 25% and 30% by the end of fiscal 2026.