Overview of Helen of Troy (HELE) earnings release for the 3rd quarter of their 2022 fiscal year
Category: Helen of Troy (HELE)
Date: 10 January 2022 Stock Price of Helen of Troy: $232.01 Market Capital of Helen of Troy: $5.6 billion We take a look at the 3rd quarter earnings report of their 2022 fiscal year of Helen of Troy, a global consumer products company whose brands include Vicks, Hydro flask, OXO and Braun. For the quarter the group reported net revenues of $624.9 million and net income of $231.7 million
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Julien R. Mininberg, Chief Executive Officer, stated - We are pleased with our results for the third quarter, delivering Core net sales growth and Core adjusted diluted EPS growth on top of 37.1% and 21.1%, respectively, in the prior year period. All three business segments exceeded our expectations."
About Helen of Troy (HELE)
Helen of Troy Limited (NASDAQ: HELE) is a leading global consumer products company offering creative solutions for its customers through a strong portfolio of well-recognized and widely-trusted brands, including OXO, Hydro Flask, Vicks, Braun, Honeywell, PUR, and Hot Tools. All trademarks herein belong to Helen of Troy Limited (or its affiliates) and/or are used under license from their respective licensors.
Overview of Helen of Troy's 3rd quarter 2022 earnings report
- Consolidated Net Sales Decline of 2.0%; Growth of 0.4% from Core Business
- GAAP Diluted Earnings Per Share (“EPS”) of $3.10
- C ore Adjusted Diluted EPS Growth of 3.0% to $3.72
- Adjusted Diluted EPS Decline of 1.1% to $3.72
- Consolidated net sales revenue was $624.9 million, a decrease of 2.0% from fiscal 2021 and an increase of 31.6% from fiscal 2020
- Core business net sales increase of 0.4% from fiscal 2021 and an increase of 37.7% from fiscal 2020
- Leadership Brand net sales decrease of 0.2% from fiscal 2021 and an increase of 33.6% from fiscal 2020
- Online channel net sales decrease of 7.4% from fiscal 2021 and an increase of 23.7% from fiscal 2020
- GAAP consolidated operating income of $90.0 million, or 14.4% of net sales, compared to $100.7 million, or 15.8% of net sales, for the same period last year
- Non-GAAP consolidated adjusted operating income decrease of 5.2% to $106.1 million, or 17.0% of net sales, compared to $111.9 million, or 17.6% of net sales, for the same period last year
- GAAP diluted EPS of $3.10, which includes EPA compliance costs of $0.20 per share, compared to $3.34 for the same period last year and $2.71 for fiscal 2020
- Non-GAAP Core adjusted diluted EPS of $3.72, an increase of 3.0% from fiscal 2021 and an increase of 24.8% from fiscal 2020
- Non-GAAP adjusted diluted EPS of $3.72, a decrease of 1.1% from fiscal 2021 and an increase of 19.2% from fiscal 2020
Raises Fiscal 2022 Diluted EPS and Net Sales Outlook:
- Consolidated Diluted EPS to $8.25-$8.59; Core Diluted EPS to $8.08-$8.42
- Consolidated Adjusted Diluted EPS to $11.73-$11.93; Core Adjusted Diluted EPS to $11.55-$11.75
- Consolidated Net Sales to $2.095-$2.115 Billion; Core Net Sales to $2.060-$2.080 Billion
Helen of Troy's management commentary on their 3rd quarter 2022 earnings report
EL PASO, Texas--(BUSINESS WIRE)-- Helen of Troy Limited (NASDAQ: HELE), designer, developer and worldwide marketer of consumer brand-name housewares, health and home, and beauty products, today reported results for the three-month period ended November 30, 2021.
Julien R. Mininberg, Chief Executive Officer, stated: “We are pleased with our results for the third quarter, delivering Core net sales growth and Core adjusted diluted EPS growth on top of 37.1% and 21.1%, respectively, in the prior year period. All three business segments exceeded our expectations. These results are the primary driver allowing us to raise our top and bottom-line outlook for the full fiscal year. Strong consumer and retailer demand drove sales for Housewares and Beauty, with both segments growing double digits on a Core basis over major double-digit sales increases in the third quarter of last fiscal year. Health & Home declined in the quarter, but performed above our expectations due to stronger than expected demand and faster-than-expected progress reworking certain products impacted by the EPA matter. Despite the impact of inflation and the EPA matter, our Core adjusted diluted EPS grew 3.0%.”
Julien R. Mininberg, Chief Executive Officer, stated: “We are pleased with our results for the third quarter, delivering Core net sales growth and Core adjusted diluted EPS growth on top of 37.1% and 21.1%, respectively, in the prior year period. All three business segments exceeded our expectations. These results are the primary driver allowing us to raise our top and bottom-line outlook for the full fiscal year. Strong consumer and retailer demand drove sales for Housewares and Beauty, with both segments growing double digits on a Core basis over major double-digit sales increases in the third quarter of last fiscal year. Health & Home declined in the quarter, but performed above our expectations due to stronger than expected demand and faster-than-expected progress reworking certain products impacted by the EPA matter. Despite the impact of inflation and the EPA matter, our Core adjusted diluted EPS grew 3.0%.”
Mr. Mininberg continued: “We are also very pleased to be able to raise our outlook for the fiscal year, reflecting the strength of our third quarter and the positive trends we see in our business during the fourth quarter. For the full fiscal year, we now expect to grow Core net sales 2% to 3% over last year’s 25.1% increase, grow Core adjusted diluted EPS 4.7% to 6.5% over last year’s 26.5% increase, and expand margins. I am proud of the hard work across our organization that puts us in a position to deliver fiscal year 2022 in line with our Phase II average annual targets on top of an elevated base despite significant headwinds from widespread inflation and the EPA matter.
As we have demonstrated this fiscal year and in the past, Helen of Troy has a track record of delivering results in the face of obstacles. Looking ahead, we plan to use the proven combination of our inflation playbook, investing in our Leadership Brands, creating efficiencies through our global shared services platform, and harnessing the excellence of our organization and culture to address obstacles such as continued inflationary cost pressures expected next fiscal year. We also expect value creation from the recently-closed Osprey acquisition, which is expected to be immediately accretive to nearly all our consolidated financial measures. We believe our balance sheet and cash flow can be put to work on further capital allocation opportunities that could help create additional value in both the short and long-term.
As we have demonstrated this fiscal year and in the past, Helen of Troy has a track record of delivering results in the face of obstacles. Looking ahead, we plan to use the proven combination of our inflation playbook, investing in our Leadership Brands, creating efficiencies through our global shared services platform, and harnessing the excellence of our organization and culture to address obstacles such as continued inflationary cost pressures expected next fiscal year. We also expect value creation from the recently-closed Osprey acquisition, which is expected to be immediately accretive to nearly all our consolidated financial measures. We believe our balance sheet and cash flow can be put to work on further capital allocation opportunities that could help create additional value in both the short and long-term.
Helen of Troy (HELE) stock price chart over last 5 years
The image below shows the stock price history of Helen of Troy (HELE) over the last 5 years. And it's been a very good time for Helen of Troy's stockholders, with the stock increasing by 149.3% over the last 5 years
The stock of Helen of Troy is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Helen of Troy's stock is very positive at this point in time.
The stock of Helen of Troy is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Helen of Troy's stock is very positive at this point in time.
Helen of Troy (HELE) stock vs Lifetime Brands (LCUT) stock over the last 5 years
The image below shows the stock price performance of Helen of Troy (HELE) and Lifetime Brands (LCUT) over the last 5 years. While both owns various consumer brands, their two firms stock price trends and performance over the last 5 years are very different. The summary below shows the stock price performance of the two firms over the last 5 years.
The stock of Helen of Troy has easily outperformed that of Lifetime Brands over the last 5 years
- Helen of Troy (HELE): 149.3%
- Lifetime Brands (LCUT): 5.1%
The stock of Helen of Troy has easily outperformed that of Lifetime Brands over the last 5 years
Helen of Troy (HELE) latest stock valuation and forecast
So what is Helen of Troy's stock worth based on the release of their latest earnings report? Based on the group's latest earnings and their outlook provided our valuation model provides a target price (forecasted full value price at $198.30 a Helen of Troy stock. We therefore believe that the stock of Helen of Troy is overvalued.
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $198.30. Thus we see a good entry point into Helen of Troy's stock at $178.50 or below. We believe that Helen of Troy's stock will pull back in coming weeks and months to levels closer to our target price..
Since the stock of Helen of Troy (HELE) is trading at well above our suggested entry point we rate the stock of HELE as a SELL
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $198.30. Thus we see a good entry point into Helen of Troy's stock at $178.50 or below. We believe that Helen of Troy's stock will pull back in coming weeks and months to levels closer to our target price..
Since the stock of Helen of Troy (HELE) is trading at well above our suggested entry point we rate the stock of HELE as a SELL
Next earnings release of Helen of Troy (HELE)
It is expected that Helen of Troy will release their 4th quarter 2022 earnings report in early April 2022