Helen of Troy Ltd (HELE)- Another Predictable SNAFU
Will things change after yet another disastrous quarter?
We have been critical of Helen of Troy's (HELE) earnings quality for decades. Throughout much of the 2010s, the stock traded roughly flat until a pandemic-driven frenzy launched it above $200. However, since then, it has experienced a sharp and steady decline, posting multiple disappointing quarters along the way. This was despite ongoing benefits from notable accounting-related items, which we highlighted for our Substack audience several times, including our January piece, Multiple Red Flags in Helen of Troy's (HELE) Q3’25. For a seemingly simple company that manufactures low-priced hair dryers, manicure products, and cooking utensils for sale in mass retailers worldwide, HELE has consistently raised accounting red flags on several fronts.
The company provided no guidance entering fiscal 2026, replaced the CEO in May with the CFO, and acquired $92 million in additional annual sales in mid-December, which contributed to revenue in Q4'25 and Q1'26. However, it has still posted lower year-over-year sales in all but one quarter since Q3'23.
Following a disastrous Q1'26, HELE announced some radical near-term changes to its operations and guided to Q2'26 sales of $408-$432 million and adjusted EPS of only $0.45-$0.60. However, we believe that sales guidance may still be too high. Also, we expect to see some longer-term changes in how HELE operates
Let’s get behind HELE’s Q1 numbers: