Helen of Troy Limited Q2 FY2026 earnings call

Management Statement and Operational Highlights

• Welcome and Introduction: New CEO Scott Azel joined, emphasizing reenergizing the company, consumer-centric approach, culture, and simplifying operations.
• Quarterly Results: Second quarter net sales and adjusted EPS at or above outlook ranges. Highlights include double-digit growth for Hot Tools, Curlsmith, and Osprey. Progress on key priorities like restoring stakeholder confidence, improving go-to-market, refocusing on innovation, fundamentals, and culture.
• Tariff Mitigation: Actions taken include supplier diversification, inventory management, cost reductions, price increases, and cost management to offset tariff impacts.
• Brand Highlights: Curlsmith brand refresh, Olive and June's momentum, OXO's strong fundamentals, Hydro Flask's new products, Osprey's growth in technical and travel packs.

Segment Performance

• Home and Outdoor: Net sales decreased 13.7%. Approximately 4 percentage points of the decline were due to tariff-related disruptions. Softness in home and insulated beverageware categories was mitigated by strong demand for technical, travel, and lifestyle packs, expanded distribution, and a new product launch in the insulated beverageware category.
• Beauty and Wellness: Net sales organic business declined 18.2%. Approximately 5 percentage points of the decrease were attributed to tariff-related disruption. Broader demand weakness in thermometers and beauty sales was partially offset by Olive and June's $33.4 million revenue.

Guidance

• Full-Year Outlook: Net sales expected between $1.74 billion and $1.78 billion, down 8.8% to 6.7% year over year. Home and Outdoor decline 11.8% to 9.7%, Beauty and Wellness decline 6.2% to 4% (including $130 to $137 million incremental sales from Olive and June). Adjusted EPS $3.75 to $4.25, down 47.7% to 40.7% year over year.
• Third-Quarter Outlook: Net sales $491 million to $512 million, down 7.5% to 3.5% year over year. Home and Outdoor decline 12.8% to 8.7%, Beauty and Wellness decline 2.9% to growth of 1% (including $36 to $39 million incremental sales from Olive and June). Adjusted EPS $1.55 to $1.80, down 41.9% to 32.6% year over year.

Risks

• Tariffs: Ongoing impact on revenue, earnings, cash flow, and balance sheet due to macro environment complexity and trade policy uncertainty.
• Consumer and Retailer Behavior: Soft consumer demand, trade-down behavior, retailer inventory adjustments, and competitive pressures affecting sales volumes and margins.

Question and Answer

Q: Scott, thoughts on portfolio and divestitures?

A: Scott mentions excitement about the portfolio, but no specific divestiture decisions yet, evaluating long-range plan.

Q: Robert, revitalizing brands?

A: Scott emphasizes consumer obsession, innovation, and improving operating model for faster decision-making.

Q: Susan, category opportunities?

A: Scott and Brian discuss opportunities in home, beauty, and outdoor categories, with focus on innovation and brand building.

Q: Olivia, innovation and balancing discounting?

A: Scott and Brian talk about innovation across categories, balancing discounting with pricing and product strategies.

Q: Shiroc, volume stabilization and consumer backdrop?

A: Tracy and Brian discuss volume assumptions, consumer trade-down, and beauty category dynamics.