Helen of Troy grew net sales 8.2% to $402.1 million and beat on adjusted EPS, then raised revenue guidance while holding earnings guidance flat. Shares fell as much as 8%. Prime Day timing supplied part of the beat, and margins compressed on tariffs.

Key Highlights

  • Consolidated net sales rose 8.2% to $402.1 million from $371.7 million, beating estimates that ranged from $368.5 million to $382.0 million
  • Adjusted diluted EPS of $0.17 beat a consensus spread across negative $0.27 to positive $0.02, but fell from $0.41 a year earlier on higher adjusted tax expense
  • Gross margin declined 110 basis points to 46.0% on tariffs, inventory obsolescence and less favourable customer mix
  • Roughly $4 million to $5 million of net sales came from favourable order phasing tied to earlier Prime Day timing, pulling demand out of Q2
  • Full-year net sales guidance rose to $1.759 billion to $1.831 billion while adjusted EPS guidance held at $3.25 to $3.75; shares fell between 5% and 8%

Helen of Troy Limited (NASDAQ: HELE) reported first quarter fiscal 2027 results on July 8 for the period ended May 31, 2026, and the market disliked them. Consolidated net sales rose 8.2%, or $30.5 million, to $402.1 million. Adjusted diluted EPS of $0.17 cleared a consensus that different providers placed anywhere between a $0.27 loss and a $0.02 profit. Both segments grew. Shares fell, trading down 5.33% at $26.54 by Benzinga's Wednesday reading and as low as $25.84, an 7.8% decline, in morning trade.

Understanding why requires looking past the beat.

Home and Outdoor net sales increased 9.5% to $194.9 million, driven by international demand for technical, lifestyle and travel packs, new product launches, and a favourable comparison to the prior year when tariff uncertainty pulled retailer orders out of fiscal 2026's first quarter into fiscal 2025's fourth. Beauty and Wellness grew 7.0% to $207.2 million on nail care, fans and thermometers, with Olive and June contributing.

Then the qualifier. CFO Brian Grass disclosed that first quarter sales benefited from approximately $4 million to $5 million of favourable order phasing driven by earlier Prime Day timing. That is roughly a point and a half of the 8.2% growth, and it does not represent incremental demand. It represents demand borrowed from the second quarter.

Margins moved the wrong way. Consolidated gross margin fell 110 basis points to 46.0%, reflecting the net unfavourable impact of tariffs, a less favourable inventory obsolescence comparison, and weaker customer mix within Home and Outdoor. Adjusted operating margin slipped to 4.0% from 4.3%. Management expects the first quarter to carry the heaviest year-over-year gross margin compression from tariffs, since higher rates are still cycling through cost of goods sold against a prior-year period with minimal tariff impact.

Adjusted diluted EPS of $0.17 was down from $0.41 a year earlier, primarily on higher adjusted income tax expense. A beat against a near-zero consensus that still represents a 59% year-over-year decline is a beat in form and a decline in substance. GAAP diluted EPS of $1.51 included an after-tax gain of $1.74 from the sale of a distribution facility in Southaven, Mississippi, a $54.9 million pre-tax gain that flatters the SG&A ratio to 31.0% and tells you nothing about the operating business.

Guidance is where the share reaction becomes legible. Helen of Troy raised full-year net sales guidance to $1.759 billion to $1.831 billion from $1.751 billion to $1.822 billion. The midpoint of roughly $1.795 billion sits marginally above the $1.79 billion consensus and barely above fiscal 2026's $1.786 billion actual. Adjusted EPS guidance was left unchanged at $3.25 to $3.75. Adjusted EBITDA guidance held at $190 million to $197 million. GAAP EPS guidance of $3.57 to $4.18 was reaffirmed.

Raising revenue while holding earnings flat is a margin warning stated in the language of guidance. The company is telling investors it expects to sell more and keep the same amount, which means the incremental sales carry no incremental profit.

The shape of the year compounds it. Management expects low to mid single digit revenue growth in the first half, followed by a low single digit decline in the second half at the midpoint. Roughly 20% of annual adjusted EPS is expected in the first half. The outlook includes approximately $9.2 million of Phase 1 tariff refunds, of which $1.8 million was recognised in the first quarter, with most of the remaining $7 million expected in the second. The company has paid $71 million in tariffs not yet subject to refund and plans to file Phase 2 claims, which the outlook excludes entirely given uncertainty around timing and collectability. Offsetting the refunds is cost inflation from commodity inputs, unfavourable Chinese yuan movement, and higher inbound and outbound freight.

Management explicitly named the Middle East conflict as a revenue risk to the back half, citing supply disruption and embedding two or three supply chain pinch points into the outlook. That is an unusually direct acknowledgement, and it arrived in the same week that renewed strikes lifted oil and freight costs.

The structural response is an operating model change. Helen of Troy is designating five segment general managers and three geographic general managers, moving decision-making closer to consumers with the stated goals of better brand building, faster execution and expanded international growth through a hybrid go-to-market model. The balance sheet has improved in parallel: total debt fell to $716.1 million from $871.0 million, though operating cash flow for the first three months was negative $0.6 million against positive $58.3 million a year earlier.

Analysts split. UBS lifted its target to $28 from $25 while maintaining Neutral. Zacks downgraded to Hold. Consensus sits at four buys and four holds, with a target range of roughly $24 to $31 against a share price that has already run near the upper end of a 52-week band of $13.85 to $31.71.

Conclusion

Helen of Troy beat on revenue, beat on a nearly meaningless EPS consensus, raised revenue guidance and left profit guidance untouched. The stock fell because investors read the components rather than the headline. Prime Day phasing supplied a point and a half of growth that Q2 now owes back. Tariffs took 110 basis points of gross margin. Adjusted EPS fell 59%. And the second half, at the guidance midpoint, declines.

Three variables determine the outcome. First, whether Phase 2 tariff refund claims on the $71 million already paid produce anything collectable, since the outlook excludes them entirely and they represent pure upside if they arrive. Second, whether the new general manager operating model accelerates international growth fast enough to offset a second half that management has already guided down. Third, whether Middle East supply disruption stays a risk disclosure or becomes a revenue event, because the company has named it as the primary threat to its own back half. The turnaround is real. It is also priced.