Helen of Troy Reports Second Quarter Fiscal 2027 Results

Consolidated Net Sales Growth of 2.1%
GAAP Net Income of $4.6 Million; Diluted EPS of $0.19
Adjusted Income⁽¹⁾ of $19.0 Million; Adjusted Diluted EPS⁽¹⁾ of $0.79
Cash Flow From Operations of $57.1 Million; Adjusted EBITDA⁽¹⁾ of $49.4 Million

Updates Fiscal 2027 Outlook:
Narrows Consolidated Net Sales to $1.768-$1.822 Billion
Raises GAAP Diluted EPS to $3.63-$4.26 and Adjusted Diluted EPS to $3.60-$4.15
Raises GAAP Net Income to $88-$103 Million and Cash Flow from Operations to $163-$179 Million
Raises Adjusted EBITDA to $203-$210 Million
Raises Free Cash Flow⁽¹⁾⁽²⁾ to $120-$140 Million

EL PASO, Texas--(BUSINESS WIRE)--Helen of Troy Limited (NASDAQ: HELE) reported results for the three-month period ended August 31, 2026.

Executive Summary - Second Quarter of Fiscal 2027 Compared to Fiscal 2026

Second quarter results include gross pre-tax tariff refunds of $26.9 million, of which approximately $23 million was reinvested in the quarter, resulting in a net pre-tax benefit of approximately $4.0 million, and a diluted EPS benefit of approximately $0.12, using the estimated annual adjusted effective tax rate.

• Consolidated net sales revenue of $440.9 million compared to $431.8 million
• Gross profit margin of 52.2% compared to 44.2%
• Operating margin of 5.2% compared to (73.1)%, which included the unfavorable impact of non-cash asset impairment charges⁽³⁾ of (75.6%) in the same period last year
• Non-GAAP adjusted operating margin⁽¹⁾ of 8.6% compared to 6.2%
• GAAP diluted earnings per share of $0.19 compared to diluted loss per share of $13.44, which included after-tax non-cash asset impairment charges of $12.77 in the same period last year
• Non-GAAP adjusted diluted EPS of $0.79 compared to $0.59
• Net cash provided by operating activities of $57.1 million compared to net cash used by operating activities of $10.5 million
• Non-GAAP adjusted EBITDA margin⁽¹⁾ of 11.2% compared to 8.4%

Mr. G. Scott Uzzell, Chief Executive Officer, stated: “Our second quarter results reflect continued progress against our multi-year roadmap. Sales were in line, and Adjusted EBITDA and Adjusted EPS were better than expected, without including the net tariff refund benefit in the quarter. Sales growth was broad-based across Home & Outdoor, Wellness, and International, with improving fundamentals across the balance of the portfolio. We also continued to strengthen our balance sheet, generate free cash flow, and focus resources on the opportunities with the greatest potential to create value.

While there is still meaningful work ahead, we are encouraged by the progress we are making to build a Better Helen of Troy on the road to becoming a Bigger Helen of Troy. We plan to continue making targeted investments in our brands, capabilities, and organization, including reinvesting the vast majority of tariff refunds, while allowing a portion to support near-term earnings and liquidity.”

Consolidated Results - Second Quarter Fiscal 2027 Compared to Second Quarter Fiscal 2026

• Consolidated net sales revenue increased $9.1 million, or 2.1%, to $440.9 million, primarily due to growth in Home & Outdoor across all brands driven by strong demand for packs, higher international sales, assortment and distribution gains, increased closeout channel sales, and new product launches. This growth was partially offset by a decrease in Beauty & Wellness driven by declines in hair appliances, prestige hair care and water filtration, partially offset by growth in heaters, thermometers and nail care.
  
  
• Consolidated gross profit margin increased 800 basis points to 52.2% primarily reflecting the favorable impact of tariff refunds, net of higher tariff costs, totaling approximately 560 basis points, and lower overall retail trade and promotional expense year-over-year. These factors were partially offset by inflationary product cost pressure primarily due to commodities, fuel prices, freight, foreign currency and supply availability, and a less favorable inventory obsolescence impact year-over-year.
  
  
• Consolidated selling, general and administrative expense (“SG&A”) ratio increased to 46.4% reflecting the stated intention to reinvest tariff refunds and consisting of: (1) an increase in personnel expense, which includes investment in the organizational structure, higher incentive compensation and health insurance expense year-over-year, (2) increased packaging related costs, which includes investment in packaging redesign and disposal costs to comply with extended producer responsibility programs, (3) divestiture litigation costs⁽⁵⁾ and (4) higher marketing expense, which includes incremental investments in demand creation, consumer insights, and content development.
  
  
• Consolidated operating income was $22.9 million, or 5.2% of net sales revenue, compared to an operating loss of $315.7 million, or (73.1)% of net sales revenue, which included non-cash asset impairment charges of $326.4 million. The remaining increase of 270 basis points was primarily due to the increase in gross profit margin, partially offset by an increase in the aforementioned consolidated SG&A ratio.
  
  
• Interest expense was $10.9 million, compared to $14.2 million. The decrease primarily reflects lower average borrowings outstanding and a lower average effective interest rate inclusive of the impact of interest rate swaps.
  
  
• Income tax expense was $9.2 million on pre-tax income of $13.8 million, compared to an income tax benefit of $21.0 million on a pre-tax loss of $329.7 million for the same period last year. The increase in income tax expense and effective tax rate was primarily due to an increase in jurisdictions with losses excluded from the estimated annual effective tax rate calculation in fiscal 2027, and was also affected by impairment charges and the timing of related tax effects and deferred tax asset valuation allowances recognized in the same period last year.
  
  
• Net income was $4.6 million, compared to net loss of $308.6 million. Diluted earnings per share was $0.19, compared to diluted loss per share of $13.44, which included after-tax asset impairment charges and related valuation allowances on deferred tax assets of $13.36. The remaining increase reflects higher operating income exclusive of the aforementioned items and a decrease in interest expense, partially offset by higher income tax expense.
  
  
• Non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $49.4 million, compared to $36.2 million. Non-GAAP adjusted EBITDA margin was 11.2% compared to 8.4%.

On an adjusted basis (non-GAAP) for the second quarters of fiscal 2027 and 2026, excluding asset impairment charges⁽³⁾, divestiture litigation costs⁽⁵⁾, intangible asset reorganization⁽⁶⁾, restructuring charges, amortization of intangible assets and non-cash share-based compensation, as applicable:

• Adjusted operating income increased $11.0 million, or 40.9%, to $37.9 million, or 8.6% of net sales revenue, an increase of 240 basis points. The increase was primarily driven by the favorable impact of tariff refunds, net of higher tariff costs, lower overall retail trade and promotional expense, and the impact of favorable operating leverage, partially offset by an increase in personnel expense, higher packaging related costs, inflationary product cost pressure, increased marketing expense, and a less favorable inventory obsolescence impact year-over-year.
  
  
• Adjusted income increased $5.5 million, or 40.3%, to $19.0 million and adjusted diluted EPS increased 33.9% to $0.79. The increase in adjusted diluted EPS was primarily due to higher adjusted operating income and a decrease in interest expense, partially offset by an increase in adjusted income tax expense and higher weighted average diluted shares outstanding.

Divestiture litigation costs relate to the divestiture of the Company’s North America personal care business to HRB Brands LLC (“HRB Brands”) that closed on June 7, 2021. After the sale, the Company was named in lawsuits related to the use of products previously sold by the business. Under the asset purchase agreement, the Company tendered indemnification of these cases to HRB Brands, who assumed defense of the claims. After many years, HRB Brands asserted that it was contesting the indemnification of these cases. Consequently, in order to protect the Company’s rights and defenses, the Company began to defend the cases. The Company maintains its position that HRB Brands is obligated to defend and indemnify the Company against these claims and plans to vigorously contest the position HRB Brands has taken. With respect to the cases, the Company believes it has substantial defenses against them. Due to HRB Brands’ failure to continue to indemnify the claims, the resulting incurrence of litigation costs related to a divestiture that occurred over five years ago, and the uncertainty of the timing in enforcing the Company’s indemnification claims against HRB Brands, the Company does not believe these costs are normal operating expenses related to its ongoing operations, revenue generating activities, or business strategy. As a result, beginning this quarter, the Company determined that the costs related to this matter would be adjusted in its non-GAAP measures going forward. For additional information refer to “Significant Trends Impacting the Business” in the Company’s Form 10-Q for the second quarter of fiscal 2027.

Segment Results - Second Quarter Fiscal 2027 Compared to Second Quarter Fiscal 2026

Home & Outdoor
Home & Outdoor net sales revenue increased $19.2 million, or 9.2%, to $227.9 million. The increase reflects growth across all brands and was primarily driven by:

• strong demand for technical, travel and lifestyle packs;
• an increase in international sales;
• assortment and distribution gains;
• higher closeout channel sales; and
• incremental sales from new product launches.

Home & Outdoor operating income was $24.1 million, or 10.6% of segment net sales revenue, compared to operating loss of $72.6 million, or (34.8)% of segment net sales revenue, which included $85.5 million of pre-tax asset impairment charges. The remaining 440 basis point increase in segment operating margin was primarily due to:

• the favorable impact of tariff refunds, net of higher tariff costs; and
• the impact of favorable operating leverage.

These factors were partially offset by:

• increased packaging related costs;
• an increase in personnel expense, which includes investment in the organizational structure, higher incentive compensation and health insurance expense year-over-year;
• inflationary product cost pressure due to commodities, fuel prices, freight, foreign currency and supply availability; and
• higher marketing expense.

Adjusted operating income increased 39.2% to $28.0 million, or 12.3% of segment net sales revenue.

Beauty & Wellness
Beauty & Wellness net sales revenue decreased $10.1 million, or 4.5%, to $213.0 million. The decrease was primarily driven by:

• a decline in Beauty hair appliances and prestige hair care products primarily due to softer consumer demand, including the impact of consumer price sensitivity, continued competition, reduced replenishment orders from retail customers and lower closeout channel sales; and
• a decrease in water filtration primarily driven by softer consumer demand and increased competitive marketing activity.

These factors were partially offset by:

• an increase in heater and thermometer sales benefitting from the favorable comparative impact of tariff related effects of reduced direct import orders and disruption in the China market during the same period last year;
• growth in nail care due to strong consumer demand, higher replenishment orders and new and expanded distribution; and
• incremental growth from new product launches.

Beauty & Wellness operating loss was $1.1 million, or (0.5)% of segment net sales revenue, compared to an operating loss of $243.1 million, or (109.0)% of segment net sales revenue, which included $240.9 million of pre-tax asset impairment charges. The remaining increase in segment operating margin was primarily due to:

• the favorable impact of tariff refunds, net of higher tariff costs; and
• lower overall retail trade and promotional expense year-over-year.

These factors were partially offset by:

• an increase in personnel expense, which includes investment in the organizational structure, higher incentive compensation and health insurance expense year-over-year;
• divestiture litigation costs;
• increased packaging related costs;
• inflationary product cost pressure due to commodities, fuel prices, freight, foreign currency and supply availability;
• higher marketing expense;
• a less favorable inventory obsolescence impact year-over-year; and
• the impact of unfavorable operating leverage.

Adjusted operating income increased 45.7% to $10.0 million, or 4.7% of segment net sales revenue.

Balance Sheet and Cash Flow - Second Quarter Fiscal 2027 Compared to Second Quarter Fiscal 2026

• Cash and cash equivalents totaled $22.6 million, compared to $22.4 million.
• Accounts receivable turnover⁽⁷⁾ was 67.6 days, compared to 72.2 days.
• Inventory was $480.3 million, compared to $528.9 million.
• Total short- and long-term debt was $672.6 million, compared to $893.2 million.
• Net cash provided by operating activities for the first six months of the fiscal year was $56.5 million, compared to $47.9 million for the same period last year.
• Free cash flow⁽¹⁾⁽²⁾ for the first six months of the fiscal year was $38.3 million, compared to $23.0 million for the same period last year.

Fiscal 2027 Annual Outlook

Key Annual Outlook Assumptions and Drivers

• Market and Consumption Environment: The Company’s outlook reflects management’s view of continued inflationary pressures, softness in discretionary categories, conservative retailer inventory management and an increasingly competitive and promotional landscape.
• Tariffs: Tariff rates in place as of September 2026 are assumed to remain in effect for the balance of fiscal 2027. The Company’s outlook now includes the estimated pre-tax benefit from Phase 1, Phase 2 and Phase 3 tariff refunds totaling approximately $80.5 million. The Company plans to strategically reinvest approximately 83% to 88% of the tariff refunds into growth investments to support brand and demand creation, organizational investments and inventory composition, resulting in an estimated pre-tax income net benefit of approximately $10 million to $14 million.
• Commodity Costs, Freight and Supply Availability: Heightened geopolitical and supply-chain risks, including ongoing tensions in the Middle East, have continued to drive volatility in energy and commodity markets that could continue, increasing uncertainty around input costs and supply chain continuity across key regions and transportation routes. The Company’s outlook continues to include the expectation of higher product costs driven by increases in commodity inputs and pressure from unfavorable Chinese Yuan fluctuations, increased inbound and outbound freight expense, and higher costs to secure goods to avoid supply disruption.
• Illness Incidence: Slightly below the average of the three prior seasons, which is well below pre-Covid historical averages.
• Working Capital Efficiency and Capital Investment: Continued working capital efficiency during fiscal 2027, with an emphasis on further inventory reduction. The Company expects capital expenditures of $39 million to $43 million, compared to the prior expectation of $30 million to $34 million, with an emphasis on product innovation, distribution center network optimization and supply chain diversification.
• Currency: September 2026 foreign currency exchange rates remain constant for the remainder of the fiscal year.

The likelihood, timing and potential impact of a significant or prolonged recession, any fiscal 2027 acquisitions and divestitures, future asset impairment charges, additional interest rate changes, litigation or share repurchases are unknown and cannot be reasonably estimated; therefore, they are not included in the Company’s outlook.

Conference Call and Webcast

The Company will conduct a teleconference in conjunction with today’s earnings release. The teleconference begins at 9:00 a.m. Eastern Time today, Thursday, October 8, 2026. Institutional investors and analysts interested in participating in the call are invited to dial (877) 407-3982 approximately ten minutes prior to the start of the call. The conference call will also be webcast live on the Events & Presentations page at: http://investor.helenoftroy.com/. A telephone replay of this call will be available at 1:00 p.m. Eastern Time on October 8, 2026, until 11:59 p.m. Eastern Time on October 22, 2026, and can be accessed by dialing (844) 512-2921 and entering replay pin number 13762459. A replay of the webcast will remain available on the website for one year.

Non-GAAP Financial Measures

The Company reports and discusses its operating results using financial measures consistent with accounting principles generally accepted in the United States of America (“GAAP”). To supplement its presentation, the Company discloses certain financial measures that may be considered non-GAAP such as Adjusted Operating Income, Adjusted Operating Margin, Adjusted Effective Tax Rate, Adjusted Income, Adjusted Diluted Earnings per Share (“EPS”), EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Net Leverage Ratio, which are presented in accompanying tables to this press release along with a reconciliation of these financial measures to their corresponding GAAP-based financial measures presented in the Company’s condensed consolidated statements of income and cash flows. For additional information, see Note 1 to the accompanying tables to this press release.

About Helen of Troy Limited

Helen of Troy Limited (NASDAQ: HELE) is a leading global consumer products company offering creative products and solutions for its customers through a diversified portfolio of well-recognized and widely-trusted brands, including OXO, Hydro Flask, Osprey, Vicks, Braun, Honeywell, PUR, Hot Tools, Drybar, Curlsmith, Revlon and Olive & June. All trademarks herein belong to Helen of Troy Limited (or its subsidiaries) and/or are used under license from their respective licensors.

For more information about Helen of Troy, please visit http://investor.helenoftroy.com

Forward-Looking Statements

Certain written and oral statements made by the Company and subsidiaries of the Company may constitute “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. This includes statements made in this press release, in other filings with the SEC, and in certain other oral and written presentations. Generally, the words “anticipates”, “assumes”, “believes”, “expects”, “plans”, “may”, “will”, “might”, “would”, “should”, “seeks”, “estimates”, “project”, “predict”, “potential”, “currently”, “continue”, “intends”, “outlook”, “forecasts”, “targets”, “reflects”, “could”, and other similar words identify forward-looking statements. All statements that address operating results, events or developments that the Company expects or anticipates may occur in the future, including statements related to sales, expenses, earnings per share results, and statements expressing general expectations about future operating results, are forward-looking statements and are based upon its current expectations and various assumptions. The Company currently believes there is a reasonable basis for these expectations and assumptions, but there can be no assurance that the Company will realize these expectations or that these assumptions will prove correct. Forward-looking statements are only as of the date they are made and are subject to risks, many of which are beyond the Company’s control, that could cause them to differ materially from actual results. Accordingly, the Company cautions readers not to place undue reliance on forward-looking statements. The forward-looking statements contained in this press release should be read in conjunction with, and are subject to and qualified by, the risks described in the Company’s Form 10-K for the year ended February 28, 2026, and in the Company’s other filings with the SEC. Investors are urged to refer to the risk factors referred to above for a description of these risks. Such risks include, among others, the geographic concentration of certain United States (“U.S.”) distribution facilities which increases its risk to disruptions that could affect the Company’s ability to deliver products in a timely manner, the occurrence of cyber incidents or failure by the Company or its third-party service providers to maintain cybersecurity and the integrity of confidential internal or customer data, a cybersecurity breach, obsolescence or interruptions in the operation of the Company’s central global Enterprise Resource Planning systems and other peripheral information systems, risks associated with the use of licensed trademarks from or to third parties, the Company’s ability to develop and introduce a continuing stream of innovative new products to meet changing consumer preferences, actions taken by large customers that may adversely affect the Company’s gross profit and operating results, the Company’s dependence on sales to several large customers and the risks associated with any loss of, or substantial decline in, sales to top customers, the Company’s dependence on third-party manufacturers, most of which are located in Asia, and any inability to obtain products from such manufacturers or diversify production to other regions or source the same product in multiple regions or implement potential tariff mitigation plans, the Company’s ability to deliver products to its customers in a timely manner and according to their fulfillment standards, the risks associated with trade barriers, exchange controls, expropriations, and other risks associated with domestic and foreign operations including uncertainty and business interruptions resulting from political changes and events in the U.

Investor Contact:
Helen of Troy Limited
Anne Rakunas, Sr. Director, Investor Relations & Corporate Communications
investors@helenoftroy.com

ICR, Inc.
Allison Malkin, Partner
investors@helenoftroy.com