Trouble at Helen of Troy (HELE)

The sirens got louder in the fiscal fourth quarter

We discussed Helen of Troy (HELE) in our March piece Discretionary Revenue Recognition where we highlighted how the declines in the company’s accruals for returns and sales allowances in its third fiscal quarter were providing a questionable boost to earnings growth.

HELE reported non-GAAP EPS of $2.45 for its fiscal fourth quarter ended February. While this topped analysts’ estimates by 15 cps and bested top-line targets by $11.9 million, the market was not impressed with the company’s guidance for 2025. What’s more, we saw a marked deterioration in the revenue recognition-related accounting disclosures in addition to more items of concern which do not bode well for future growth or the quality of the 4Q beat.

Let’s get behind the numbers…

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