Helen Of Troy Shares Fall After Q1 Earnings Beat, Weak FY22 Outlook

Helen of Troy Limited HELE reported first-quarter FY22 sales of $541.2 million, a 28.6% year-on-year growth, beating the consensus of $438.90 million.
Beauty and Housewares led to the increase in sales as the easing of COVID-19 restrictions drove store traffic. Organic business sales grew 27.3% Y/Y.
The company recorded a $13.1 million charge related to the Environmental Protection Agency’s (EPA) packaging compliance costs on concerns that packaging claims on certain products in its U.S. water and air filtration and a limited subset of humidifier products are not in compliance to EPA’s standards.
The adjusted operating margin for the quarter was 17.5%, with an adjusted operating income of $95 million.
Adjusted EPS of $3.48 beat the consensus of $2.62, with a 37.5% increase Y/Y.
HELE lost $63.4 million in operational cash flow, and ended the quarter with cash and equivalents of $37.4 million.
Outlook: HELE expects FY22 Core net sales of $1.9 billion to $1.95 billion, versus consensus of $2.02 billion.
It sees FY22 adjusted EPS of $10.25 to $10.75 against the consensus of $11.83. GAAP EPS is estimated at $6.80 to $7.49.
The company expects to incur additional EPA compliance costs, which may include costs to relabel or repackage existing inventory as well as incremental freight and storage costs, among other things.
Price action: HELE shares traded lower by 9.12% at $211.16 on Wednesday.

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