Multiple Red Flags in Helen of Troy’s (HELE) Q3’25

Benefits from unusual movements in accruals continue to pop up

We seldom dig into HELE’s financial statements without finding unusual movements in accruals that helped boost the company’s EPS. Q3’25 was no exception. While revenue of $530.7 million missed estimates by $2.2 million, the company’s reported EPS of $2.67 managed to clear hurdles by 9 cps. However, we identified several accounting red flags that investors should be aware of. While we did note an accounting-related drag partially offset the benefits, one of the benefits appears likely to be temporary, whereas the drag may persist for some time.

As earnings season kicks off, readers can expect an increase in the number of these Red Flag Notes that highlight earnings quality concerns we uncover in our initial screen of 10-Qs and 10-Ks. While we have done enough follow up to make sure that unusual accrual movements are not due to benign factors such as acquisitions/divestitures or other issues, please note that these reports do not constitute a comprehensive earnings quality assessment of the company. We may conduct further analysis and publish a more detailed report at a later date.

Now let’s get behind HELE’s numbers…

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