Helen of Troy (HELE) investor relations material

Executive summary

• Net sales for FY26 were $1.786 billion, down from $1.908 billion in FY25, with Q4 sales at $470 million, reflecting tariff-related disruptions, softer retail demand, and strategic investments; Olive & June acquisition and pricing actions partially offset declines.

• Adjusted diluted EPS was $0.83 for Q4 and $3.55 for FY26, both down sharply from the prior year; GAAP results reflect significant non-cash asset impairment charges.

• Free cash flow for FY26 was $131.9 million, up from $83.1 million in FY25, with $103.1 million generated in Q4; cash flow prioritized for debt reduction.

• $136 million in debt was paid down during FY26, supported by proceeds from the sale of the Southaven, MS distribution facility and working capital efficiency initiatives.

• Organizational changes and operational rigor were implemented to address challenges, prioritize brand health, and drive future positioning.

Financial highlights

• Q4 consolidated sales declined 3.3% year-over-year to $470 million, outperforming outlook due to pricing actions and Olive & June's contribution.

• FY26 gross profit margin was 45.7% (down 220 bps YoY); Q4 gross margin was 44.6% (down 400 bps), mainly due to higher tariffs, inventory obsolescence, and increased promotional expense.

• Adjusted operating margin for FY26 was 8.3% (down 490 bps YoY); Q4 was 8.3% (down 710 bps); adjusted EBITDA margin for FY26 was 10.4%.

• Adjusted diluted EPS for FY26 was $3.55 (vs. $7.17 in FY25); Q4 was $0.83 (vs. $2.33 prior year).

• Inventory ended at $456 million, flat year-over-year despite $34 million in incremental tariff costs; debt at $781 million, net leverage ratio 3.87x.

Outlook and guidance

• FY27 net sales expected at $1.751–$1.822 billion; Home and Outdoor $854–$882 million, Beauty and Wellness $897–$940 million.

• Adjusted EBITDA guidance: $190–$197 million; adjusted EPS: $3.25–$3.75; GAAP diluted EPS: $3.57–$4.18.

• Free cash flow expected at $85–$100 million; capital expenditures $28–$32 million focused on innovation and supply chain diversification.

• Net leverage ratio targeted at ~3.2x or lower by year-end; adjusted effective tax rate 25%–27%.

• Outlook assumes tariffs as of April 2026 remain, no major commodity or supply disruptions, and constant FX rates.