|
Related Topics
|
Category: Stock Market and Helen of Troy
Date: 8 October 2019 Stock Price: $156.15 We take a look at the 2nd quarter earnings report of their 2020 fiscal year of Helen of Troy, a global consumer products company whose brands include Vicks, Braun and OXO.
|
About Helen of Troy
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.
The image below shows the evolution of Helen of Troy from a beauty only company in the 1960's to the current state which includes Beauty, Health and Home and Housewares.
The image below shows the evolution of Helen of Troy from a beauty only company in the 1960's to the current state which includes Beauty, Health and Home and Housewares.
Overview of Helen of Troy's latest earnings report
- Total Revenues: $413.995 million (up from $393.548 million for the same quarter of the previous year)
- Total Revenues increased by 5.19% over the last 12 months
- Cost of sales: $235.844million (down from $238.375 million for the same quarter of the previous year)
- Cost of sales decreased by -1.6% over the last 12 months
- Net income: $46.095 million (up from $44.017 million for the same quarter of the previous year)
- Diluted earnings per share: $1.83 (up from $1.66 for the same quarter of the previous year)
- PE ratio: 21.2
- Diluted weighted-average shares outstanding: 25.245 million (down from 26.557 million for the same quarter of the previous year)
- Cash and cash equivalents: $17.031 million
- Cash and cash equivalents per share: $0.67
- Cash and cash equivalents makes up 0.42% of Helen of Troy's market capital
- Cash and cash equivalents makes up 0.95% of Helen of Troy's total assets
- Accounts receivable: $310.377 million
- Accounts receivable makes up 17.47% of Helen of Troy's total assets
- Cash generated from operations (for 6 months): $38.211 million
- Cash generated from operations per share (for 6 months): $1.51
- Stockholders equity of Helen of Troy: $1.087 billion
- Stockholders equity per share: $43.06
- So Helen of Troy is trading at 3.62 times its stockholders equity which is within the expected range of between 2 and 4 times that most firms tend to trade at.
Helen of Troy's management commentary on the results and business outlook
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 August 31, 2019.
Julien R. Mininberg, Chief Executive Officer, stated: "We are pleased with our second quarter financial performance, which delivered consolidated core business sales growth of 5.7% and adjusted diluted EPS growth of 13.1%, both ahead of our expectations. During the quarter, we improved our consolidated operating margin, while simultaneously increasing our growth investments compared to our original outlook at the beginning of the year. These growth investments are generating healthy results and our digital initiatives continue to pay dividends, illustrated by online sales growth of 25%, which now represents 24% of total sales in the quarter. Consolidated sales growth was led by our Housewares segment as we expanded distribution and introduced new products that resonated well with both customers and consumers. Our Beauty segment continued to grow, driven by strong demand in the appliance category. Our Health & Home segment faced a particularly difficult comparison to the high base that included strong sales of seasonal products, distribution gains and significant international growth in the same period last year. Overall, a strong quarter and first half of our fiscal year.”
Mr. Mininberg continued: “Based on this performance and our expectations for the remainder of the fiscal year, we are pleased to raise our net sales and adjusted diluted EPS outlook for the full fiscal year 2020. We believe we are well positioned to continue driving meaningful long-term shareholder value as we execute our Phase II Transformation plan."
Fiscal 2020 Annual Outlook
For fiscal 2020, the Company has updated its outlook and now expects consolidated net sales revenue to be in the range of $1.610 to $1.640 billion, which implies consolidated sales growth of 2.9% to 4.8% compared to the prior expectation of 1.7% to 3.6%. By segment, the outlook reflects:
The Company now expects consolidated GAAP diluted EPS from continuing operations of $6.84 to $7.04, and non-GAAP adjusted diluted EPS from continuing operations in the range of $8.50 to $8.75, which excludes any asset impairment charges, restructuring charges, share-based compensation expense and intangible asset amortization expense.
The Company’s net sales and EPS outlook assumes the severity of the upcoming cough/cold/flu season will be in line with historical averages. The Company’s net sales and EPS outlook also assumes that September 2019 foreign currency exchange rates will remain constant for the remainder of the fiscal year. The Company now expects the year-over-year comparison of adjusted diluted EPS from continuing operations to be impacted by an expected increase in growth investments of 13% to 18% in fiscal 2020. The diluted EPS outlook is based on an estimated weighted average diluted shares outstanding of 25.3 million.
The increase in the adjusted diluted EPS outlook for fiscal 2020 reflects the Company's strong performance in the second quarter, partially offset by an expected increase in growth investments, higher expected annual incentive compensation expense, and higher expected freight and distribution costs. These costs support strong demand in our Housewares segment and Beauty appliances business, as well as integration activity and increases in capacity and throughput for future growth.
The Company now expects a reported GAAP effective tax rate range of 9.6% to 10.7%, and an adjusted effective tax rate range of 9.0% to 10.0% for the full fiscal year 2020. Please refer to the schedule entitled “Effective Tax Rate (GAAP) and Adjusted Effective Tax Rate (Non-GAAP)” in the accompanying tables to this press release.
The likelihood and potential impact of any fiscal 2020 acquisitions and divestitures, future asset impairment charges, future foreign currency fluctuations, further tariff increases, or future share repurchases are unknown and cannot be reasonably estimated; therefore, they are not included in the Company’s sales and earnings outlook.
Julien R. Mininberg, Chief Executive Officer, stated: "We are pleased with our second quarter financial performance, which delivered consolidated core business sales growth of 5.7% and adjusted diluted EPS growth of 13.1%, both ahead of our expectations. During the quarter, we improved our consolidated operating margin, while simultaneously increasing our growth investments compared to our original outlook at the beginning of the year. These growth investments are generating healthy results and our digital initiatives continue to pay dividends, illustrated by online sales growth of 25%, which now represents 24% of total sales in the quarter. Consolidated sales growth was led by our Housewares segment as we expanded distribution and introduced new products that resonated well with both customers and consumers. Our Beauty segment continued to grow, driven by strong demand in the appliance category. Our Health & Home segment faced a particularly difficult comparison to the high base that included strong sales of seasonal products, distribution gains and significant international growth in the same period last year. Overall, a strong quarter and first half of our fiscal year.”
Mr. Mininberg continued: “Based on this performance and our expectations for the remainder of the fiscal year, we are pleased to raise our net sales and adjusted diluted EPS outlook for the full fiscal year 2020. We believe we are well positioned to continue driving meaningful long-term shareholder value as we execute our Phase II Transformation plan."
Fiscal 2020 Annual Outlook
For fiscal 2020, the Company has updated its outlook and now expects consolidated net sales revenue to be in the range of $1.610 to $1.640 billion, which implies consolidated sales growth of 2.9% to 4.8% compared to the prior expectation of 1.7% to 3.6%. By segment, the outlook reflects:
- Housewares net sales growth of 13% to 15%, compared to the prior expectation of 6% to 8%;
- Health & Home net sales decline in the low-single digits, compared to the prior expectation of net sales growth of 2% to 3%; and
- Beauty net sales growth in the low-single digits, compared to the prior expectation of a net sales decline in the low-single digits.
The Company now expects consolidated GAAP diluted EPS from continuing operations of $6.84 to $7.04, and non-GAAP adjusted diluted EPS from continuing operations in the range of $8.50 to $8.75, which excludes any asset impairment charges, restructuring charges, share-based compensation expense and intangible asset amortization expense.
The Company’s net sales and EPS outlook assumes the severity of the upcoming cough/cold/flu season will be in line with historical averages. The Company’s net sales and EPS outlook also assumes that September 2019 foreign currency exchange rates will remain constant for the remainder of the fiscal year. The Company now expects the year-over-year comparison of adjusted diluted EPS from continuing operations to be impacted by an expected increase in growth investments of 13% to 18% in fiscal 2020. The diluted EPS outlook is based on an estimated weighted average diluted shares outstanding of 25.3 million.
The increase in the adjusted diluted EPS outlook for fiscal 2020 reflects the Company's strong performance in the second quarter, partially offset by an expected increase in growth investments, higher expected annual incentive compensation expense, and higher expected freight and distribution costs. These costs support strong demand in our Housewares segment and Beauty appliances business, as well as integration activity and increases in capacity and throughput for future growth.
The Company now expects a reported GAAP effective tax rate range of 9.6% to 10.7%, and an adjusted effective tax rate range of 9.0% to 10.0% for the full fiscal year 2020. Please refer to the schedule entitled “Effective Tax Rate (GAAP) and Adjusted Effective Tax Rate (Non-GAAP)” in the accompanying tables to this press release.
The likelihood and potential impact of any fiscal 2020 acquisitions and divestitures, future asset impairment charges, future foreign currency fluctuations, further tariff increases, or future share repurchases are unknown and cannot be reasonably estimated; therefore, they are not included in the Company’s sales and earnings outlook.
Helen of Troy (NASDAQ: HELE) stock price history
The image below, obtained from Google, shows the stock price history of Helen of Troy over the last 5 years. And it's been a very good time for Helen of Troy's stockholders.5 years ago the stock was trading at around $54 a stock and its currently trading at $156.15 a stock. That's a very strong return of 189% provided to Helen of Troy stockholders over the last 5 years. The stock of Helen of Troy is trading at a lot closer to its 52 week high of $169.25 than it is to its 52 week low of $108.30 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.
Recent coverage of Helen of Troy
The extract below discusses the latest news on Helen of Troy as obtained from TheStreet.com
Helen of Troy (HELE - Get Report) shares on Tuesday touched an all-time high after the consumer-products company reported second-quarter profit and revenue that beat expectations and increased its full-year guidance. The stock rose as much as 6.3% to $169.25, before settling back. The stock at last check was trading up 0.9% at $160.63.
The Hamilton, Bermuda, company behind brands such as Oxo food-prep utensils and Vicks humidifiers reported net income of $46.1 million, or $1.83 a share, for the quarter ended Aug. 31, up from $44 million, or $1.66, in the year-earlier quarter. Adjusted EPS came in at $2.24, which was above the consensus of $1.88, according to FactSet. The figure compared with $1.98 a year earlier. Revenue increased 5.2% to $414 million, which beat the consensus of $391.9 million, according to FactSet.
Read the full article here
Helen of Troy (HELE - Get Report) shares on Tuesday touched an all-time high after the consumer-products company reported second-quarter profit and revenue that beat expectations and increased its full-year guidance. The stock rose as much as 6.3% to $169.25, before settling back. The stock at last check was trading up 0.9% at $160.63.
The Hamilton, Bermuda, company behind brands such as Oxo food-prep utensils and Vicks humidifiers reported net income of $46.1 million, or $1.83 a share, for the quarter ended Aug. 31, up from $44 million, or $1.66, in the year-earlier quarter. Adjusted EPS came in at $2.24, which was above the consensus of $1.88, according to FactSet. The figure compared with $1.98 a year earlier. Revenue increased 5.2% to $414 million, which beat the consensus of $391.9 million, according to FactSet.
Read the full article here
Helen of Troy (NASDAQ: HELE) latest stock valuation
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 (full value) price at $140 a Helen of Troy stock. We therefore believe that the stock 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 $140. Thus we see a good entry point into Helen of Troy's stock at $126 or below. We believe that Helen of Troy's stock will pull back in coming weeks and months to levels closer to our target (full value) price even though our target price is about $8 higher than it was based on their 1st quarter 2020 earnings report (which you can read about here)
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 $140. Thus we see a good entry point into Helen of Troy's stock at $126 or below. We believe that Helen of Troy's stock will pull back in coming weeks and months to levels closer to our target (full value) price even though our target price is about $8 higher than it was based on their 1st quarter 2020 earnings report (which you can read about here)