Helen of Troy raises FY27 sales outlook, warns of supply risks
Helen of Troy Limited reported first quarter fiscal 2027 results with net sales of $402.1 million, an 8.2% increase, and GAAP diluted EPS of $1.51. The company raised its full-year net sales outlook to $1.759 billion to $1.831 billion while affirming GAAP EPS guidance of $3.57 to $4.18. Management warned of potential supply disruptions due to the Middle East conflict and softer consumer demand.
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Helen of Troy Limited reported first quarter fiscal 2027 results for the three-month period ended May 31, 2026, delivering consolidated net sales growth of 8.2% and GAAP diluted earnings per share of $1.51. The company raised its full-year consolidated net sales outlook while affirming its GAAP diluted EPS guidance range, reflecting early signs of progress against its multi-year strategic roadmap despite warnings about supply chain disruptions and softer consumer demand. Management highlighted that revenue risk from expected supply disruption is largely driven by the conflict in the Middle East, alongside risks from cautious retailers and inflation.
First Quarter Fiscal 2027 Financial Highlights
The following table summarizes key consolidated financial metrics for the first quarter of fiscal 2027 compared to the same period in fiscal 2026:
| Metric: | Q1 FY2027 | Q1 FY2026 |
|---|---|---|
| Net Sales Revenue: | $402.1 million | $371.7 million |
| Net Sales Growth: | 8.2% | — |
| Gross Profit Margin: | 46.0% | 47.1% |
| GAAP Operating Margin: | 15.0% | (109.5)% |
| Non-GAAP Adjusted Operating Margin: | 4.0% | 4.3% |
| GAAP Diluted EPS: | $1.51 | $(19.65) |
| Non-GAAP Adjusted Diluted EPS: | $0.17 | $0.41 |
| Net Income (Loss): | $35.8 million | $(450.7) million |
| Adjusted EBITDA Margin: | 6.3% | 6.9% |
Consolidated net sales revenue increased $30.5 million, or 8.2%, to $402.1 million, with growth recorded in both segments. GAAP diluted EPS of $1.51 includes an after-tax gain of $1.74 on the sale of a distribution facility. Non-GAAP adjusted diluted EPS of $0.17 decreased 58.5% compared to $0.41 in the prior year period, primarily due to an increase in adjusted income tax expense, partially offset by lower interest expense. Consolidated gross profit margin decreased 110 basis points to 46.0%, primarily reflecting the net unfavorable impact of tariffs, a less favorable inventory obsolescence impact year-over-year, and a less favorable customer mix within the Home & Outdoor segment.
Segment Performance
The company operates through two reportable segments — Home & Outdoor and Beauty & Wellness. The table below presents segment-level net sales and adjusted operating margin for the first quarter:
| Segment: | Q1 FY2027 Net Sales | Net Sales Growth | Q1 FY2027 Adj. Operating Margin | Q1 FY2026 Adj. Operating Margin |
|---|---|---|---|---|
| Home & Outdoor: | $194.9 million | 9.5% | 6.3% | 5.0% |
| Beauty & Wellness: | $207.2 million | 7.0% | 1.8% | 3.7% |
| Total: | $402.1 million | 8.2% | 4.0% | 4.3% |
Home & Outdoor net sales revenue increased $16.9 million, or 9.5%, to $194.9 million, driven by strong international demand for technical, lifestyle and travel packs, incremental sales from new product launches, higher sales from expanded distribution in the home and insulated beverageware categories, and a favorable comparison to the prior year period as tariff uncertainty had pulled retailer orders out of the first quarter of fiscal 2026 and into the fourth quarter of fiscal 2025. Home & Outdoor adjusted operating income increased 39.2% to $12.3 million, or 6.3% of segment net sales revenue.
Beauty & Wellness net sales revenue increased $13.5 million, or 7.0%, to $207.2 million, driven by growth in nail care due to new and expanded distribution, higher fan and thermometer sales, and growth in Wellness from incremental new product launches. Beauty & Wellness adjusted operating income decreased 48.2% to $3.8 million, or 1.8% of segment net sales revenue, impacted by the net unfavorable impact of tariffs, higher share-based compensation expense, and a less favorable inventory obsolescence impact year-over-year.
Balance Sheet and Cash Flow
Key balance sheet and cash flow metrics as of and for the three months ended May 31, 2026, are presented below:
| Metric: | May 31, 2026 | May 31, 2025 |
|---|---|---|
| Cash and Cash Equivalents: | $21.7 million | $22.7 million |
| Inventory: | $467.4 million | $484.1 million |
| Total Debt: | $716.1 million | $871.0 million |
| Accounts Receivable Turnover: | 66.6 days | 69.7 days |
| Net Cash (Used) by Operating Activities: | $(0.6) million | $58.3 million |
Inventory of $467.4 million includes approximately $15 million of incremental tariff costs. Total short- and long-term debt declined to $716.1 million from $871.0 million in the prior year period, reflecting continued prioritization of debt reduction. Net cash used by operating activities for the first quarter was $0.6 million, compared to net cash provided of $58.3 million in the same period last year.
Fiscal 2027 Annual Outlook
The company raised its fiscal 2027 annual outlook for consolidated net sales while maintaining its GAAP diluted EPS range. The following table summarizes the updated outlook:
| Metric: | Fiscal 2027 Outlook |
|---|---|
| Consolidated Net Sales: | $1.759 billion to $1.831 billion |
| Home & Outdoor Net Sales: | $859 million to $884 million |
| Beauty & Wellness Net Sales: | $900 million to $947 million |
| GAAP Diluted EPS: | $3.57 to $4.18 |
| Adjusted Diluted EPS (Non-GAAP): | $3.25 to $3.75 |
| GAAP Net Income: | $85 million to $100 million |
| Adjusted EBITDA (Non-GAAP): | $190 million to $197 million |
| Operating Cash Flow (GAAP): | $119 million to $130 million |
| Free Cash Flow (Non-GAAP): | $85 million to $100 million |
The outlook assumes tariff rates in place as of June 2026 remain in effect for the balance of fiscal 2027, and includes the benefit from Phase 1 tariff refunds of approximately $9.2 million. The company expects interest expense in the range of $45.5 million to $47.5 million, a GAAP effective tax rate of 27.2% to 29.7%, an adjusted effective tax rate of 24.0% to 26.0%, capital expenditures of $30 million to $34 million, and a net leverage ratio of approximately 3.2x or lower by the end of fiscal 2027. Weighted average diluted shares outstanding are expected to be 23.8 million. Management noted that first-quarter revenue received a temporary $4 million to $5 million boost from earlier Prime Day order timing and embedded potential supply risk tied to two or three supply-chain pinch points in the outlook.
Management Commentary
G. Scott Uzzell, Chief Executive Officer, stated: "We are off to a solid start in fiscal 2027, with first quarter net sales and adjusted EPS above our expectations and growth across both segments. We believe these results reflect early signs of progress against our multi-year roadmap and the disciplined execution of our teams — including POS gains across a number of our key brands — as we continue to sharpen how the business runs, invest in our brands and capabilities, and get closer to the consumer. While there is still meaningful work ahead and we are navigating a dynamic operating environment, we are encouraged by the progress we are making and believe we are creating the foundation for more consistent, long-term growth."
How does the company plan to mitigate the specific supply chain pinch points and Middle East conflict risks identified in the outlook to meet the raised sales guidance?
What specific strategic initiatives are being implemented to reverse the margin compression and operating income decline in the Beauty & Wellness segment?
With operating cash flow turning negative in the first quarter, what actions will be taken to ensure the company meets its full-year operating cash flow and free cash flow targets?
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