Helen of Troy stock tanks 25% following Q1 earnings report

Helen of Troy Limited (NASDAQ: HELE) is down 25% in premarket on Tuesday after reporting disappointing financial results for its first quarter. 

The stock is taking a hit because the health, home, and beauty products company failed to impress with its future guidance as well. 

Helen of Troy stock is now down about 45% versus the start of 2024. 

Helen of Troy stock sinks on lowered guidance

Helen of Troy lowered its guidance for full-year consolidated net sales to $1.885 billion to $1.935 billion today. 

The Nasdaq-listed firm trimmed its outlook for adjusted EPS as well to 7.0 to $7.50 in fiscal 2025. Noel M. Geoffroy – the chief executive of HELE said in a press release today:

We’re disappointed with the start to our fiscal year. We battled an unusual number of internal and external challenges in the quarter. Many of these challenges became more pronounced toward the end of Q1 and some continue to evolve.

Helen of Troy stock is trading at a year-to-date low at writing. 

Helen of Troy Q1 earnings snapshot

Helen of Troy reported $419 million in revenue for its first financial quarter on Tuesday that fell short of Street expectations by some $29 million. 

At 99 cents, adjusted per-share earnings of the Texas based company also missed consensus by about 60 cents. CEO Geoffroy also said today:

We now see this fiscal year as a time to take action to reset and revitalise our business. As a result, we’re lowering our annual outlook, which delays delivery of long-term financial algorithm in our strategic plan.

Ahead of its earnings release, Wall Street had a consensus “overweight” rating on Helen of Troy stock. On average, analysts saw upside in it to $129 – up roughly 90% from here. 

What else of noteworthy in HELE report?

On the plus side, Helen of Troy improved its gross profit margin by 330 basis points in the recently concluded quarter to 48.7%. 

The $2.0 billion company spent about $100 million to repurchase 1,011,243 of its common shares in Q1. According to chief executive Noel M. Geoffroy:

Despite challenges, I remain confident the strategies we’re implementing are the right ones to improve the long-term health of our brands, return our Company to positive growth, and deliver sustained shareholder value.

Helen of Troy stock does not currently pay a dividend which makes it unattractive for the income investors. HELE traded at a higher of close to $250 during the pandemic in 2021.