Helen of Troy (HELE) investor relations material

Executive summary

• Net sales declined 8.9% year-over-year to $431.8 million for the quarter, with organic sales down 16%, partially offset by Olive & June's $33.4 million contribution.

• New CEO Scott Uzzell outlined a turnaround vision focused on innovation, operational simplification, and restoring growth, with leadership transition underway.

• The company reported a net loss of $308.6 million for the quarter, mainly due to $326.4 million in non-cash asset impairment charges.

• Adjusted EPS was $0.59, down from $1.21, and adjusted operating margin was 6.2%.

• Five key priorities for turnaround: stakeholder confidence, go-to-market effectiveness, innovation, brand fundamentals, and culture.

Financial highlights

• Q2 consolidated net sales were $431.8 million, down 8.9% year-over-year; organic net sales declined 16%.

• Gross profit margin fell 140 bps to 44.2%, mainly due to higher tariffs and promotional expenses.

• Adjusted operating margin was 6.2%; adjusted EBITDA margin was 8.4%.

• Free cash flow year-to-date was $23 million, despite a $34 million drag from higher tariff payments.

• Non-cash asset impairment charges of $326.4 million were recognized, primarily due to a sustained decline in stock price.

Outlook and guidance

• FY26 net sales expected between $1.739 billion and $1.78 billion, a decline of 8.8% to 6.7% year-over-year.

• Adjusted EPS guidance for FY26 is $3.75–$4.25, down 47.7% to 40.7% year-over-year.

• Q3 net sales expected between $491 million and $512 million, with adjusted EPS of $1.55–$1.80.

• Margin compression anticipated due to tariffs, promotional environment, and product mix, partially offset by cost reductions and price increases.

• Ongoing cost reduction and tariff mitigation actions expected to reduce net tariff impact on operating income to less than $20 million.