Helen of Troy (HELE) Stock Falls After Cutting Full-Year Outlook

  • Helen of Troy (HELE) just reported its first-quarter earnings results.
  • The company’s earnings beat estimates, but the company cut its full-year guidance.
  • HELE stock sank 9% as traders absorbed the news.
HELE stock - Helen of Troy (HELE) Stock Falls After Cutting Full-Year Outlook

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Helen of Troy (NASDAQ:HELE) is getting attention today as the company just issued its first-quarter fiscal 2023 results. The company posted top- and bottom-line beats. However, citing inflation and changes in consumer spending, Helen of Troy reduced its financial outlook. Consequently, HELE stock fell 9% in early trading today.

Based in Texas, Helen of Troy sells various consumer products, mainly in the home, outdoor and health and beauty categories. As you can imagine, 2022’s first half hasn’t been kind to this company. Three consecutive Consumer Price Index prints above 8% were bound to weigh on consumers, and therefore on Helen of Troy.

So, expectations were likely muted as the company released its quarterly financial data. This may have set Helen of Troy up for a pleasant surprise or two, though. As it turned out, the company posted Q1 FY2023 adjusted earnings per share (excluding nonrecurring items) of $2.41. This handily beat the FactSet consensus estimate of $2.

Also, Helen of Troy reported quarterly revenue of $508.1 million, down 6.1% year over year. The good news is that this result beat Wall Street’s consensus estimate of $474.2 million. So far, so good.

What’s Happening with HELE Stock?

Despite these Street beats, HELE stock dropped 9% this morning. Clearly, investors weren’t too pleased, but what was so objectionable about Helen of Troy’s earnings report?

The problem wasn’t the quarterly data, so much as the forward guidance. For fiscal year 2023, Helen of Troy lowered its adjusted EPS guidance ranges from $12.73 to $13.03, to $9.85 to $10.35. As for the company’s full-year revenue, Helen of Troy’s expected full-year range was reduced from $2.38 billion to $2.42 billion, to $2.15 billion to $2.20 billion.

Helen of Troy CEO Julien Mininberg cited the usual suspects in 2022, inflation and high interest rates. “Since our April earnings release, the macroeconomic outlook has changed significantly as consumers shift their buying patterns and adapt to a number of factors including the impact of inflation and interest rates rising more rapidly than expected,” Mininberg explained.

Evidently, it’s a tough macro environment in which to sell consumer products like Helen of Troy does. At least for today, HELE stock traders are expressing their dismay by tossing their shares away.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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