Helen of Troy (NASDAQ:HELE) closed fiscal 2026 with fourth-quarter results that management described as a “step in the right direction,” while outlining a multi-year plan aimed at restoring growth momentum and improving execution across its brand portfolio.
Chief Executive Officer G. Scott Uzzell said the company exited the year with “ruthless focus and disciplined execution,” noting that fourth-quarter net sales exceeded expectations and adjusted earnings per share were in line. He added that margins reflected “strategic investment” in brands and people, alongside deliberate choices to position the organization for future growth.
CEO highlights: Stabilization and a multi-year roadmap
Uzzell outlined key actions for fiscal 2027, including a more structured approach to brand investment, building future capabilities tied to consumer insights and innovation, strengthening consumer-centered decision-making, modernizing operations (including a “baseline in AI”), and continuing platform-level improvements.
He also discussed market conditions, calling sales trends volatile. Uzzell said the Home and Outdoor business “held steady,” while Beauty and Wellness “felt the pressure,” citing an unusually weak flu season that reduced demand for wellness replenishment. He added that retail inventories are “finally stabilizing,” with most retailers back to healthy stock levels.
Across brands, Uzzell pointed to innovation launches and product recognition, including Hydro Flask’s expansion of its Micro Hydro franchise and new carryout soft coolers and totes, OXO’s planned expansion into food storage and feeding, and continued innovation at Osprey. In Beauty and Wellness, he highlighted the launch of the Revlon VersaStyler at Walmart, new Curlsmith and Olive & June introductions, and “top industry recognition” for the beauty brands.
Fourth-quarter performance: Sales declines, but strength in key brands
Chief Financial Officer Brian Grass said fourth-quarter net sales, adjusted EPS, and cash flow came in at the “better end” of the company’s expectations. Consolidated sales decreased 3.3% year over year, which Grass said was favorable to the company’s outlook. He attributed the decline to tariff-related revenue disruption and lower core volume, partially offset by pricing actions and the contribution from Olive & June.
By segment:
- Home and Outdoor: Sales declined 1.5%, ahead of expectations. Grass said OXO and Hydro Flask were ahead of plan and Osprey delivered “solid year-over-year growth.” He cited OXO’s point-of-sale strength at value customers and replenishment at mass retailers, Hydro Flask’s performance tied to product launches and strength in closeout as inventory composition improved, and Osprey’s growth driven primarily by e-commerce, new products, adjacent-category expansion, and end-of-season clearance through the outdoor channel.
- Beauty and Wellness: Sales decreased 4.7%, with approximately 2.8 percentage points of the decline driven by tariff-related disruption. Grass said Revlon, Olive & June, and Braun were standouts. Revlon was driven by strong point of sale at Walmart and Target plus international contribution. Olive & June delivered 18% organic growth and contributed 4.9 percentage points to segment growth, supported by “effective digital grassroots marketing,” new products, and strong consumer engagement. Braun performed solidly in EMEA and APAC, aided by early flu incidents, order timing, and replenishment.
International sales grew 5.4%, surpassing expectations, which Grass attributed to strong point of sale, expanded distribution, and new product innovation.
Profitability metrics in the quarter reflected tariff and mix pressures. Gross margin decreased 400 basis points to 44.6%, primarily due to higher tariffs, less favorable inventory obsolescence versus the prior year, higher retail trade and promotional expense, and a less favorable channel mix in Home and Outdoor. SG&A ratio increased 270 basis points, driven by operating leverage, higher annual incentive compensation expense, EPA compliance costs, and the Olive & June acquisition. Adjusted operating margin fell 710 basis points to 8.3%.
Tariffs, pricing actions, and supply chain diversification
Grass provided detail on tariff impacts and mitigation progress. For fiscal 2026, gross unmitigated tariffs reduced gross profit by $51 million. Through “SKU prioritization, cost reductions, price increases, and supplier diversification,” Grass said the company reduced the net operating income impact to less than $30 million for the year.
By year-end, Helen of Troy reduced its cost of goods sold exposure subject to China tariffs to approximately 30%. Grass said the company can currently dual source approximately 45% of annual product volume and expects to reach about 55% by the end of fiscal 2027.
On pricing integrity, Grass said the company temporarily stopped shipments in Beauty and Wellness in the prior quarter to support consistent pricing adoption and has now “resumed shipments in almost all of these instances.” In Q&A, Grass said planned price increases are “almost or effectively 100%” in place, and that the year-over-year revenue impact of price increases in fiscal 2027 versus fiscal 2026 is expected to be about $50 million.
Balance sheet and fiscal 2027 outlook
Grass said the company ended fiscal 2026 with inventory of $456 million, “largely flat” year over year despite $34 million of incremental tariff costs embedded in inventory. He said the company reduced inventory by almost $50 million in the fourth quarter alone by accelerating turns of productive inventory and clearing slower-moving items.
Debt ended at $781 million, and net leverage was 3.87x, up from 3.77x in the third quarter, which Grass attributed primarily to lower trailing 12-month EBITDA, partially offset by free cash flow. He said the company paid down $112 million of debt in the quarter, supported by inventory reduction and receivables conversion. Fiscal-year free cash flow was $132 million despite $72 million of incremental cash outflows for tariff payments and transitory supplier-diversification costs.
After quarter-end, Grass said the company sold its distribution facility in Southaven, Mississippi, generating proceeds of approximately $78 million that were used to pay down debt.
For fiscal 2027, Helen of Troy guided to:
- Net sales: $1.751 billion to $1.822 billion (Home and Outdoor $854 million to $882 million; Beauty and Wellness $897 million to $940 million)
- Adjusted EBITDA: $190 million to $197 million (implying 2.1% to 6.3% year-over-year growth)
- Adjusted EPS: $3.25 to $3.75
- Free cash flow: $85 million to $100 million
Grass said the quarterly cadence is expected to be uneven. At the midpoint, the company expects first-half year-over-year sales growth to be “slightly positive” and second-half sales “slightly negative.” He added that roughly 15% of annual adjusted EPS is expected in the first half, with “roughly break-even” adjusted EPS in the first quarter, driven by higher average tariff costs cycling into cost of goods sold in the first half and the timing of people and brand investments.
Management’s outlook assumes tariffs in place as of April 2026 remain in effect and does not include benefits from potential tariff refunds. Grass said the company expects to reduce China-tariff exposure in cost of goods sold to less than 20% by the end of fiscal 2027 and limit the net operating income impact to less than $10 million for the full year. The outlook also reflects an increase in growth investments of about 40 basis points, with Grass noting the company intends to “lean into any over-performance with additional growth investment.”
During Q&A, Grass said the company has not adjusted its outlook for potential impacts stemming from the Iran conflict, calling it too early to model. However, he said Helen of Troy has taken steps to minimize exposure, including forward-buying some raw materials and working to lock in inbound freight pricing.
Uzzell closed the call by reiterating that fiscal 2027 is intended to be a “pivotal year of restoration,” as the company aims to become “a better company on the road to being a bigger company.”
About Helen of Troy (NASDAQ:HELE)
Helen of Troy Limited is a global consumer products company that designs, sources and markets a diversified portfolio of household, health and beauty brands. Headquartered in El Paso, Texas, the company operates through three principal segments—Health & Home, Housewares and Beauty—offering products under well-known names including OXO, Vicks, Braun, Honeywell Home, PUR and Hot Tools. Helen of Troy distributes its products through a combination of mass, specialty and e-commerce channels to consumers, retailers and distributors worldwide.
The Housewares segment features kitchen tools, gadgets and organizational solutions marketed primarily under the OXO brand, recognized for its ergonomic “Good Grips” design.
