Helen of Troy ends fiscal year with sizeable loss
For the three months ending February 28, the company also suffered from weakening demand, especially on the personal care side of its business.
Overall Helen of Troy experienced a 3.8 percent drop in quarterly net sales to $188.6m but this figure hides a sharp performance divide between the two sides of its business.
While sales of household goods edged up 1.4 percent on the corresponding quarter last year, the larger personal care business endured a 6.1 percent decline in turnover.
Recent hair care acquisition poised to boost sales
Helen of Troy will be hoping to turn these figures around with the help of Infusion 23, a therapeutic hair care brand the company bought from Procter & Gamble (P&G) in March.
With a line-up of 23 hair care products and annual net sales of $40m, Infusion 23 is expected to have an impact on sales as early as the first quarter, next fiscal year.
Meanwhile, Helen of Troy is facing a financial situation that looks far less healthy than it did a year ago. Sales fell 4.6 percent over the fiscal year to $622.7m and a net profit of $61.5m turned into a net loss of $56.8m.
The changing fortunes of Helen of Troy are reflected in its share price which has dropped by almost a third since September.
Losses significant, but underlying figure beats market expectations
Nevertheless, the grim looking figures from latest quarter trumped market expectations. Analysts polled by Thomson Reuters had expected earnings, excluding one-off items, of 14 cents per share but the final figure was 31 cents.
“We are pleased with our fourth quarter results considering the challenging retail environment,” said CEO Gerald J. Rubin.
Helen of Troy made cost reduction a priority over the last year reducing incentive compensation costs, royalties, sales commissions, out-bound freight expense, and advertising expenses.
Looking forward to the new fiscal year Rubin said: “The domestic retail environment continues to be challenging and is expected to continue that way for a number of quarters.
“However, as the business environment begins to improve, we are well positioned to take advantage of our leadership role in our marketplace and categories.”
