We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Helen of Troy (HELE) Earnings & Sales Beat Estimates in Q2
Read MoreHide Full Article
Helen of Troy Limited (HELE - Free Report) reported robust second-quarter fiscal 2021 results, with the top and the bottom line increasing year over year and beating the Zacks Consensus Estimate. Results gained from strength in all segments, solid online growth and contributions from Drybar Products’ acquisition.
Given the unprecedented impacts of COVID-19, management did not provide any guidance for fiscal 2021. While the company has been undertaking measures to preserve cash flow and curtail costs, given a solid performance, management stated that it has relaxed some of these measures at the end of the second quarter. Moreover, it expects to keep on making higher investments in marketing and other growth areas.
Apart from these, the company is making certain investments in its Phase II Transformation efforts. Also, as part of its strategy of keeping focus on Leadership Brands, the company decided to divest some assets in its mass channel personal care business (Personal Care). It expects the divestiture to close in fiscal 2021.
Helen of Troy Limited Price, Consensus and EPS Surprise
Adjusted earnings increased 68.3% year over year to $3.77 per share, easily surpassing the Zacks Consensus Estimate of $2.39. Higher operating income across all segments was the key driver. The upside was partly offset by elevated income tax expenses and an increase in the number of shares outstanding.
Net sales advanced 28.2% year over year to $530.9 million, beating the consensus mark of $447.2 million. The year-over-year growth was driven by 25.7% organic sales growth and gains from the acquisition of Drybar Products. Notably, organic sales growth was backed growth in brick and mortar revenues, strong international sales along with solid online revenues. This was somewhat negated by soft sales in Personal Care segment, coronavirus-led store closures and reduced store traffic at specific retail customers.
Consolidated gross margin moved up 0.4 percentage points to 43.4%, courtesy of favorable product mix in the Organic Beauty business and the Health and Home segment, as well as positive impact from Drybar Products' buyout and improved channel mix in the Housewares unit. Also, reduced air freight charges and decrease in direct import sales contributed to the upside. This was partly countered by an adverse product mix in Housewares segment.
Adjusted operating income surged 64.9% to $108.5 million and the adjusted operating margin expanded 4.5 percentage points to 20.4%. The upside in operating margin can be attributable to improved sales, some factors that boosted gross margin and cost-containment efforts. Adjusted EBITDA grew 62.5% to $113.4 million.
Segmental Performance
Net sales in the Housewares segment increased 20.3% to $201.9 million driven by growth in organic business. Organic growth was backed by increased demand for OXO brand products amid COVID-19, higher online sales for OXO as well as Hydro Flask, improved revenues from the club channel. Also, increased international sales and new product launches were a reason. Adjusted operating income in the unit improved 27.1% to $47.8 million.
Net sales in the Health & Home segment advanced 33.2% to $211.5 million, thanks to organic business growth of 33.1%. Organic sales were backed by burgeoning demand for healthy living and healthcare products across domestic and international markets, both in stores and online amid the pandemic. Also, demand stemming from wildfire activity on the west coast of the United States led to the upside. Adjusted operating income increased significantly to $37.8 million.
Sales in the Beauty segment jumped 34.6% to $117.5 million, thanks to contributions from the buyout of Drybar Products along with organic business growth stemming from strength in the appliance category, expansion in distribution as well as higher international sales. Adjusted operating income surged significantly to $22.9 million.
Other Financial Details
The company ended the quarter with cash and cash equivalents of $148.4 million and total debt (short and long-term) of $300.1 million. At the end of six months ended Aug 31, net cash from operating activities was $186.3 million.
We note that shares of this Zacks Rank #2 (Buy) company have gained 8.1% year-to-date against the industry’s decline of 24.9%.
United Natural Foods (UNFI - Free Report) , with a Zacks Rank #1, has a trailing four-quarter earnings surprise of 4.8%, on average.
Medifast, Inc. (MED - Free Report) , with a Zacks Rank #2, has a trailing four-quarter earnings surprise of 15.8%, on average
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Helen of Troy (HELE) Earnings & Sales Beat Estimates in Q2
Helen of Troy Limited (HELE - Free Report) reported robust second-quarter fiscal 2021 results, with the top and the bottom line increasing year over year and beating the Zacks Consensus Estimate. Results gained from strength in all segments, solid online growth and contributions from Drybar Products’ acquisition.
Given the unprecedented impacts of COVID-19, management did not provide any guidance for fiscal 2021. While the company has been undertaking measures to preserve cash flow and curtail costs, given a solid performance, management stated that it has relaxed some of these measures at the end of the second quarter. Moreover, it expects to keep on making higher investments in marketing and other growth areas.
Apart from these, the company is making certain investments in its Phase II Transformation efforts. Also, as part of its strategy of keeping focus on Leadership Brands, the company decided to divest some assets in its mass channel personal care business (Personal Care). It expects the divestiture to close in fiscal 2021.
Helen of Troy Limited Price, Consensus and EPS Surprise
Helen of Troy Limited price-consensus-eps-surprise-chart | Helen of Troy Limited Quote
Results in Detail
Adjusted earnings increased 68.3% year over year to $3.77 per share, easily surpassing the Zacks Consensus Estimate of $2.39. Higher operating income across all segments was the key driver. The upside was partly offset by elevated income tax expenses and an increase in the number of shares outstanding.
Net sales advanced 28.2% year over year to $530.9 million, beating the consensus mark of $447.2 million. The year-over-year growth was driven by 25.7% organic sales growth and gains from the acquisition of Drybar Products. Notably, organic sales growth was backed growth in brick and mortar revenues, strong international sales along with solid online revenues. This was somewhat negated by soft sales in Personal Care segment, coronavirus-led store closures and reduced store traffic at specific retail customers.
Consolidated gross margin moved up 0.4 percentage points to 43.4%, courtesy of favorable product mix in the Organic Beauty business and the Health and Home segment, as well as positive impact from Drybar Products' buyout and improved channel mix in the Housewares unit. Also, reduced air freight charges and decrease in direct import sales contributed to the upside. This was partly countered by an adverse product mix in Housewares segment.
Adjusted operating income surged 64.9% to $108.5 million and the adjusted operating margin expanded 4.5 percentage points to 20.4%. The upside in operating margin can be attributable to improved sales, some factors that boosted gross margin and cost-containment efforts. Adjusted EBITDA grew 62.5% to $113.4 million.
Segmental Performance
Net sales in the Housewares segment increased 20.3% to $201.9 million driven by growth in organic business. Organic growth was backed by increased demand for OXO brand products amid COVID-19, higher online sales for OXO as well as Hydro Flask, improved revenues from the club channel. Also, increased international sales and new product launches were a reason. Adjusted operating income in the unit improved 27.1% to $47.8 million.
Net sales in the Health & Home segment advanced 33.2% to $211.5 million, thanks to organic business growth of 33.1%. Organic sales were backed by burgeoning demand for healthy living and healthcare products across domestic and international markets, both in stores and online amid the pandemic. Also, demand stemming from wildfire activity on the west coast of the United States led to the upside. Adjusted operating income increased significantly to $37.8 million.
Sales in the Beauty segment jumped 34.6% to $117.5 million, thanks to contributions from the buyout of Drybar Products along with organic business growth stemming from strength in the appliance category, expansion in distribution as well as higher international sales. Adjusted operating income surged significantly to $22.9 million.
Other Financial Details
The company ended the quarter with cash and cash equivalents of $148.4 million and total debt (short and long-term) of $300.1 million. At the end of six months ended Aug 31, net cash from operating activities was $186.3 million.
We note that shares of this Zacks Rank #2 (Buy) company have gained 8.1% year-to-date against the industry’s decline of 24.9%.
Some More Solid Staple Picks
Flowers Foods (FLO - Free Report) , with a Zacks Rank #1 (Strong Buy), has a trailing four-quarter earnings surprise of 8.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
United Natural Foods (UNFI - Free Report) , with a Zacks Rank #1, has a trailing four-quarter earnings surprise of 4.8%, on average.
Medifast, Inc. (MED - Free Report) , with a Zacks Rank #2, has a trailing four-quarter earnings surprise of 15.8%, on average
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>