Helen of Troy Earnings Preview

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Helen of Troy (NAS: HELE) came in under analysts' estimates last quarter but now has a chance to fix things this quarter. The company will unveil its latest earnings Thursday. Helen of Troy is a global designer, developer, importer, and distributor of a portfolio of brand-name consumer products. It has two segments: personal care and housewares.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Helen of Troy. Analysts don't like Helen of Troy as much as competitor Procter & Gamble overall. Sixteen out of 24 analysts rate Procter & Gamble a buy compared to zero of two for Helen of Troy.
  • Revenue forecasts: On average, analysts predict $288.8 million in revenue this quarter. That would represent a rise of 65.2% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.86 per share. Estimates range from $0.85 to $0.86.

What our community says:
The majority of CAPS All-Stars see HELE as a good bet, with 58.8% assigning it an outperform rating. The majority of the Fools are in agreement with the All Stars as 74.2% give it an outperform rating. Fools are keen on Helen of Troy, though the message boards have been quiet lately with only 44 posts in the past 30 days. Helen of Troy's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Helen of Troy's profit has risen year over year by an average of 34.3% over the past five quarters. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 4.7 percentage points in the last quarter. Revenue rose 69.5% while cost of sales rose 84.2% to $161.6 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

40.5%

43.8%

45.2%

45.9%

Operating Margin

11.3%

12.6%

15.4%

15.8%

Net Margin

9.1%

10.3%

13.2%

13.4%

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At the time this article was published

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