Helen of Troy Limited - Value

Who knew housewares and personal care products could be so hot? Helen of Troy Limited (HELE) recently reported its fiscal third quarter results and once again grew revenue year over year. The stock remains cheap, trading at just 10x forward estimates.

Not Just Curling Irons

Helen of Troy is best known for its hair dryers, curling irons, brushes, hair accessories, mirrors, hair styling products and skin care products under the licensed names Vidal Sassoon, Revlon, Dr. Scholl's, Sunbeam and its own brands of Final Net and Condition 3-in-1, among others.

But it also manufactures popular home products including kitchen tools, cutlery, tea kettles, trash cans, gardening tools, barbeque tools and kitchen mitts under the popular brands OXO and Good Grips.

The company continues to expand its brands by acquisition, recently acquiring Pert-Plus and Sure for the Personal Care line.

On Dec 31, 2010, it also closed on its acquisition of Kaz, Inc. which owns the Vicks, Braun, Honeywell, Stinger, Softheat and Kaz brands. Its products include vaporizers, humidifiers, thermometers, blood pressure monitors, air purifiers, heaters, fans and lawn and garden products.

Helen of Troy Beat By 15% in the Fiscal Third Quarter

On Jan 11, Helen of Troy reported fiscal third quarter results which surprised on the Zacks Consensus Estimate by 11 cents. Earnings per share were 86 cents compared to the Zacks Consensus of 75 cents. The company made 80 cents per share a year ago.

It was the 8th straight earnings surprise.

Revenue rose 8.2% to $205 million from $189.4 million a year ago. For the first 9 months, revenue gained 9%. Both segments contributed to the revenue increase.

Personal Care, the largest segment, saw revenue climb 9.2% to $146.5 million. Housewares jumped 6% to $58.5 million boosted by sales in the dry and wet food storage categories.

The company still considered the retail sales environment to be "difficult" in the third quarter but sees the retail environment slowly improving going forward.

Zacks Consensus Estimates Rise

Analysts liked what they heard in the quarterly results.

The fiscal 2011 Zacks Consensus Estimate jumped 6 cents to $2.82 in the last month. That is earnings growth of 21.4% compared to the fiscal 2010 earnings of $2.32.

Another 20% earnings growth is expected in fiscal 2012 as the 2012 Zacks Consensus Estimate rose 12 cents to $3.37 per share in the past 30 days.

Still a Value Stock

Helen of Troy has been a value stock for awhile. In addition to its low forward P/E it has a price-to-book of just 1.3 which is well within the value range of under 3.0.

The company also has a solid return on equity (ROE) of 13.9%.

Helen of Troy is a Zacks #1 Rank (strong buy) stock.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service. You can follow her at twitter.com/traceyryniec.

 
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