Helen of Troy Not So Beautiful Today

Helen of Troy Ltd. (NASDAQ: HELE) reported second-quarter 2013 diluted earnings per share (EPS) of $0.72 on net sales of $287.41 million. In the same period a year ago, the consumer products company reported adjusted EPS of $0.74 on sales of $277.42 million. Fourth-quarter results compare to the Thomson Reuters consensus estimates for earnings of $0.85 per share and $310 million in revenue.

The company’s CEO said:

Similar to other global consumer products companies, we faced many challenges in light of continuing consumer uncertainty and global economic problems. We are pleased that we were able to achieve growth in net sales revenue, operating income and EBITDA without share-based compensation, in a challenging retail sales environment.

Helen of Troy lowered its full-year EPS guidance to a range of $3.50 to $3.60. The company did not change revenue expectations of $1.3 billion to $1.325 billion. The consensus estimates called for full-year EPS of $3.76 on revenues of $1.31 billion.

Gross profit increased slightly, from 40.5% last year to 40.7% this year. SG&A expenses rose slightly as well, from 29.5% to 30%. But the big impact on net income came from increased tax expenses, which rose from $1.94 million in the same period a year ago to $4.77 million this year. The company attributed the rise to “an increase in the proportion of taxable income in higher tax rate jurisdictions” as a result of recent acquisitions.

Helen of Troy owns and licenses a number of consumer brands, including Revlon, Dr. Scholl’s, Vicks and Braun.

The company’s shares are down about 6% in premarket trading at $30.00. The 52-week range is $25.47 to $35.35. Thomson Reuters had a consensus analyst price target of around $36.00 before today’s report.

Paul Ausick