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How Did Helen of Troy’s 1Q17 Earnings Turn Out?

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Price movement

Helen of Troy’s (HELE) stock fell by 3.7% to close at $99.27 per share during the first week of July 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -3.5%, -6.0%, and 5.3%, respectively, as of July 8. HELE is trading 2.5% below its 20-day moving average, 1.2% below its 50-day moving average, and 1.3% above its 200-day moving average.

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Related ETFs and peers

The Vanguard Consumer Discretionary ETF (VCR) invests 0.08% of its holdings in HELE. The ETF tracks a market cap–weighted index of stocks in the US consumer discretionary sector. The YTD price movement of VCR was 3.2% on July 8.

The Vanguard Extended Market ETF (VXF) invests 0.05% of its holdings in HELE. The ETF tracks a market cap–weighted version of the S&P Total Market Index, excluding all S&P 500 stocks.

The market caps of HELE’s competitors are as follows:

  • Newell Brands (NWL): $23.9 billion
  • Clorox Company (CLX): $18.1 billion
  • Revlon (REV): $1.6 billion

Helen of Troy’s performance in fiscal 1Q17

Helen of Troy reported fiscal 1Q17 net sales revenue of $347.9 million, a rise of 0.75% compared to net sales revenue of $345.3 million in fiscal 1Q16. Sales revenue of the Housewares and Health & Home segments rose by 29.8% and 2.3%, respectively, and sales revenue of the Nutritional Supplements and Beauty segments fell by 8.9% and 17.0%, respectively, in fiscal 1Q17 compared to fiscal 1Q16. The company’s gross profit margin rose by 5.5%, and its operating income fell by 13.7% in fiscal 1Q17 compared to the comparable period in the previous year.

Its net income and EPS (earnings per share) fell to $19.0 million and $0.68, respectively, in fiscal 1Q17 compared to $20.4 million and $0.70, respectively, in fiscal 1Q16. For fiscal 1Q17, the company reported adjusted EPS of $1.27, a rise of 19.8% compared to fiscal 1Q16.

HELE’s cash and cash equivalents and inventory rose by 51.5% and 6.7%, respectively, in fiscal 1Q17 compared to fiscal 1Q16. Its debt-to-equity ratio rose to 0.61x in fiscal 1Q17 compared to 0.47x in fiscal 1Q16.

Projections

The company has made the following projections for fiscal 2017:

  • It expects consolidated net sales revenue in the range of $1.57 billion–$1.62 billion, which includes incremental sales from the Hydro Flask acquisition in the range of $60.0 million–$65.0 million for the period subsequent to closing in fiscal 2017.
  • It expects consolidated GAAP (generally accepted accounting principles) EPS in the range of $4.37–$4.77, including an after-tax noncash asset impairment charge of $5.1 million and a patent litigation charge of $1.5 million.
  • The company expects adjusted EPS in the range of $5.85–$6.35. This projection doesn’t include after-tax noncash asset impairment charges, share-based compensation expenses, intangible asset amortization expenses, and patent litigation charges, but it includes incremental adjusted EPS in the range of $0.28–$0.32 per share from the acquisition of Hydro Flask.
  • The company expects its effective tax rate to be in the range of 13%–15%.

Now we’ll discuss Kellogg Company (K).

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