Helen of Troy (HELE) Q4 2025 earnings summary

Executive summary

• Q4 FY25 net sales declined 0.7% year-over-year to $485.9M, with results at the higher end of the outlook range despite currency headwinds; full-year sales were $1.91B, down 4.9%.

• Adjusted EPS for Q4 was $2.33, down from $2.45 last year; GAAP diluted EPS rose 24% to $2.22 due to a $64.6M transitional tax benefit.

• Olive & June outperformed expectations, became the #1 nail brand in Target, contributed $23M to Q4 sales, and was acquired for nearly $330M in December 2024.

• Project Pegasus restructuring completed, delivering the largest annual savings, improving gross margin, and incurring $60.9M in pre-tax charges.

• No formal FY26 guidance provided due to global trade policy uncertainty and macroeconomic volatility; supplier diversification and cost control are key focuses.

Financial highlights

• Q4 net sales: $485.9M, down 0.7% YOY; adjusted operating margin: 15.4% (-160 bps YOY); gross margin: 48.6% (-40 bps YOY); adjusted EBITDA margin: 17.4% (-190 bps YOY); adjusted EPS: $2.33 (vs. $2.45 LY); free cash flow: $27.1M.

• FY25 net sales: $1.908B, down 4.9% YOY; adjusted operating margin: 13.2%; gross margin: 47.9% (+60 bps YOY); adjusted EBITDA margin: 15.2%; adjusted EPS: $7.17; free cash flow: $83.1M (vs. $269.4M LY).

• Q4 net income was $50.9M, up from $42.7M; full-year net income was $123.8M, down from $168.6M.

• Net leverage ratio at year-end was 3.0x, reflecting the Olive & June acquisition and share repurchases.

• Q4 operating margin dropped to 0.4% due to a $51.5M impairment charge; adjusted operating margin was 15.4%.

Outlook and guidance

• No FY26 guidance provided due to global trade policy and tariff uncertainty; outlook will be updated when there is more clarity.

• Supplier diversification plan accelerated, targeting 70–80% mitigation of $200M+ tariff impact in FY26 and reducing China exposure to under 20% of COGS by end of FY26.

• Q1 FY26 expected to be softer than Q4, with pressure from paused retailer direct imports and international headwinds, especially in China.

• Anticipate positive free cash flow for the full year despite challenges.

• Cost reduction and cash preservation measures implemented, including capex suspension and expense reductions.