0000916789-26-000048
SEC filingRevenue fell 6.4% to $1.79B, with GAAP net loss of $899M driven by $886M impairment; adjusted operating margin declined 490bps to 8.3% amid tariffs and consumer headwinds.
Helen of Troy Limited is a leading global consumer products company that offers creative products and solutions through a diversified portfolio of brands. The company was incorporated in Texas in 1968 and reorganized in Bermuda in 1994. It markets products under owned and licensed trademarks including OXO, Hydro Flask, Osprey, Vicks, Braun, Honeywell, PUR, Hot Tools, Drybar, Curlsmith, Revlon, and Olive & June.
The company operates in two reportable segments: Home & Outdoor and Beauty & Wellness. The Home & Outdoor segment provides products for home activities (food preparation, storage, cooking, cleaning, organization, and beverage service) and outdoor activities (hydration products, coolers, backpacks, and travel gear). The Beauty & Wellness segment delivers beauty products (hair styling appliances, grooming tools, personal care products, nail care) and wellness products (humidifiers, thermometers, water and air purifiers, heaters, fans). Sales are primarily to online and brick & mortar retailers and through direct-to-consumer channels.
Key products include food storage containers, kitchen utensils, insulated beverageware, technical packs, hair tools, hair liquids, nail consumables, and wellness devices. The company's brand portfolio includes owned brands like OXO, Hydro Flask, Osprey, Drybar, Hot Tools, Curlsmith, Olive & June, and PUR, as well as licensed brands such as Revlon, Honeywell, Braun, and Vicks.
The company markets products in approximately 100 countries. Sales within the U.S. comprised about 72% of total net sales in fiscal 2026. Products are sold through mass merchandisers, sporting goods retailers, department stores, drugstore chains, home improvement stores, grocery stores, specialty stores, prestige beauty chains, e-commerce retailers, and directly to consumers. The largest customer, Amazon.com, accounted for approximately 20% of net sales in fiscal 2026. Walmart and Target accounted for about 13% and 12%, respectively. The top five customers represented approximately 50% of net sales.
The company operates in highly competitive and mature markets. Competitors include Lifetime Brands, Breville, Newell Brands, Yeti, Conair, Spectrum Brands, Dyson, L'Oréal, and many others. The company competes on brand recognition, engineering expertise, innovation, sourcing capabilities, and co-development relationships. It supports products with advertising, promotions, and an extensive sales force.
The company is undergoing a strategic reset under new CEO leadership. Key strategic priorities include: reenergizing brands and people, adapting the organizational structure to be consumer-centric, strengthening the brand portfolio for predictable long-term growth, and improving asset efficiency. The company plans to sharpen focus on fewer initiatives, invest in product innovation, strengthen brand loyalty, and advance commercial excellence.
As of February 28, 2026, the company employed 1,854 full-time associates worldwide. None of the U.S. associates are covered by a collective bargaining agreement, and the company has never experienced a work stoppage. The company emphasizes a culture of inclusion, care, and belonging, and offers learning opportunities, volunteer time off, and employee stock purchase programs.
Fiscal 2026 marked a challenging year for Helen of Troy, with consolidated net sales declining 6.4% to $1,786 million. The decline was driven by a 12.2% organic sales drop, partially offset by the Olive & June acquisition ($107 million). Gross margin contracted 220 basis points to 45.7%, primarily due to $50.7 million in additional tariff costs, higher trade promotion expense, and unfavorable inventory obsolescence. GAAP operating loss was $782 million versus prior year income of $143 million, as $886 million in non-cash asset impairment charges overwhelmed the base business. SG&A ratio rose to 39.7% from 37.0%, impacted by incentive compensation, freight costs, EPA compliance, and CEO succession costs. Net loss totaled $899 million (diluted loss per share $39.08), compared to net income of $124 million ($5.37 EPS) last year. Adjusted diluted EPS fell 50.5% to $3.55.
Home & Outdoor segment revenue declined 8.1% to $833 million, driven by competition and distribution losses in insulated beverageware, lower club channel sales, and tariff-related retailer pull-forward. Osprey technical packs and new product launches partially offset weakness. The segment reported a GAAP operating loss of $270 million (including $333 million impairment), while adjusted operating margin fell from 15.7% to 9.5% due to tariffs and higher costs. Beauty & Wellness revenue fell 4.8% to $953 million, with organic sales down 15.6% due to tariff impacts on direct imports, softer consumer demand, and a below-average cough/cold/flu season. Olive & June contributed $107 million in acquisition revenue. GAAP operating loss was $512 million (including $553 million impairment), and adjusted operating margin contracted from 11.0% to 7.3%.
Management emphasized a strategic reset under new leadership, aiming to stabilize and reposition the company for long-term growth. Key priorities include reenergizing brands, adapting organizational structure, strengthening portfolio, and improving asset efficiency. The company expects to realize the remaining ~15% of Project Pegasus cost savings in fiscal 2027. However, significant uncertainty persists due to evolving tariff policies, consumer confidence, and potential further impairment risks. Liquidity remains adequate with $171 million operating cash flow, but debt covenants limited incremental borrowings to $91 million as of February 28, 2026. No quantitative guidance for fiscal 2027 was provided.
Cash and equivalents remained flat at $18.9M. Total debt decreased by $136.3M to $780.8M (net of unamortized fees) due to repayment of revolving loans partially offset by $250M delayed draw term loan drawn in Q1. Leverage ratio covenant tightened to 4.50x through August 2026; available borrowing capacity was $432.3M, but covenant-limited additional debt capacity was only $91.1M. Shareholders' equity more than halved to $798.2M, driven by the $899M net loss.
Minimum royalty commitments under trademark licenses total $26.0M over the next five years (FY2027: $6.2M). Operating lease obligations: $82.0M total future payments, with $10.3M due in FY2027. Contingent consideration for Olive & June acquisition: $5.4M liability (Level 3), with $5.0M paid in April 2026 on achievement of 2025 EBITDA target.
No open-market share repurchases occurred in FY2026; only $1.9M in shares surrendered for tax withholding. The $500M buyback authorization approved August 2024 had $498.0M remaining as of year-end. No dividends paid. Debt reduction of $136.3M was primarily from revolver paydown. Capex of $39.2M (2.2% of sales), up from $30.1M prior year, with $7.4M accrued at year-end.
Home & Outdoor revenue fell 8.1% to $832.9M; operating loss of $269.7M included $332.6M impairment (Hydro Flask $184.4M, Osprey $148.1M). Beauty & Wellness revenue down 4.8% to $953.4M; operating loss of $512.3M included $553.3M impairment (Health & Wellness $242.2M, Drybar $154.5M, Curlsmith $133.0M, Revlon $23.5M). Olive & June contributed a full year in FY2026 vs. 11 weeks in FY2025. No geographic revenue breakdown was provided in the Notes.
The most material risk is the impact of tariffs on imports from China, Vietnam, and Mexico. In fiscal 2026, tariffs added $50.7 million to cost of goods sold and cascaded into net sales declines due to retailer order cancellations and stop-shipment actions. The company faces ongoing uncertainty from evolving U.S. trade policies and retaliatory measures. Additionally, climate change regulations and sustainability expectations are increasing compliance costs and reputational pressure.
Helen of Troy is heavily dependent on third-party manufacturers in Asia, with 83% of finished goods sourced there (57% from China). This concentration exposes the company to trade barriers, labor costs, and transportation disruptions. Geographic concentration of U.S. distribution facilities (60% of volume in northern Mississippi/Tennessee) amplifies vulnerability to weather, pandemics, or other local disruptions. A previous automation system startup issue at the Gallaway, Tennessee facility in fiscal 2025 caused shipping delays and additional costs.
The top two customers account for 33% of net sales, and the top five represent ~50%. Large retailers have increasing bargaining power, demanding lower prices and special terms. Loss of a major customer could materially harm revenue. The company must continuously innovate to meet changing consumer preferences and compete against private label brands.
The most significant financial risk is further impairment of goodwill and intangible assets. In fiscal 2026, $885.9 million in impairment charges were recorded, primarily in the Beauty & Wellness ($553.3M) and Home & Outdoor ($332.6M) segments. These resulted from sustained stock price declines, tariff impacts, and reduced forecasts. Additional impairment triggers include further tariff increases or macroeconomic deterioration. The company also faces liquidity risk from its substantial debt and compliance with credit facility covenants, especially given recent negative sales trends and higher interest rate exposure via SOFR.
The provided document excerpt does not contain the actual cash flow statement figures. Only references to the financial statements are present, but no numerical data is available for analysis.