Online channel drives Helen of Troy’s Q1 revenue growth

Consumer products company Helen of Troy (HELE) today reported earnings for the first quarter of fiscal 2019. Consolidated revenue grew 9% to $354.6 million, riding on double-digit growth in the company’s Leadership Brands and online sales. Helen of Troy’s Transformation Plan also contributed to its growth momentum in the quarter.

On the profit front, the company’s reported EPS from continuing operations surged 42.9% to $1.43, while profit jumped 39.9% to $38.2 million. Excluding special items, EPS from continuing operations jumped 32.6% to $1.87. The company’s strong sell-through of its products in the previous quarter helped maintain healthy inventory levels in its operation and at retail.

For fiscal 2019, Helen of Troy anticipates net sales growth of $1.485 billion to $1.510 billion, implying a consolidated sales growth of 0.4% to 2.1%. However, reflecting the impact of share repurchases in the quarter, the company lowered its GAAP EPS outlook to $6.27 to $6.42 from the earlier expected $6.30 to $6.50 outlook. Guidance for adjusted EPS from continuing operations was also lowered to $7.45 to $7.70 from $7.30 to $7.55 anticipated last quarter.

Continuing with the trend, Helen of Troy’s Beauty segment reported a sales decline of 5.8%, reflecting a decline in brick-and-mortar and unfavorable comparison from the retail fill-in of new product introductions in the year-ago period. This segment has been distressed due to the softness in the personal care category, hit by increasing competition. For fiscal 2019, in line with the historical sales trend, the company expects net sales decline in the low-to-mid single digits.

However, both Housewares, and Health & Home segments posted double-digit increases in sales for the quarter increasing 18% and 10.2% respectively. The growth in Housewares was paced by new product introductions, higher online sales, and a favorable impact of foreign currency fluctuations. In the Health & Home segment, sales were driven by wider international distribution and increased online sales.

For Housewares, the company expects net sales growth in the mid-single digits for fiscal 2019, while for the Health & Home segment net sales growth is anticipated in the low-single digits, with an unfavorable impact of about 2.5% from the average cough/cold/flu season assumption.

Helen of Troy said the year-over-year comparison of adjusted EPS is hit by the anticipated increase in investments to support the growth of the company’s Leadership Brands of 14% to 18% in fiscal 2019.