Share prices for consumer product company
Helen of Troy Limited
) rose 10.3% on Jan 10, 2013 after it posted better-than-expected
third quarter fiscal 2014 results. Last week, global consumer
Helen of Troy posted third-quarter 2014 earnings of $1.16 per
share, which was lower than year-ago results by 1.6% due to
higher cost of sales.
However earnings beat the Zacks Consensus Estimate of $1.09 by
6.4% as unfavorable foreign exchange translation was more than
offset by higher revenues and operating income.
Revenues and Margins
During the quarter, total revenue increased 1.6% year over
year to $380.7 million backed by strong sales in the House wares
segment. Positive product mix and innovations also backed sales
gain during the quarter. Total sales were in line with the Zacks
Gross margin shrank 80 basis points (bps) to 38.8% due to
product cost increase, higher promotional programs and
unfavorable foreign exchange translation. Operating income margin
inflated 40 bps to 12.9% due to lower selling, general and
administrative expenses during the quarter.
Sales in the Housewares category climbed 10.3% to $74.8 million
compared with the year-ago period, backed by innovation in
product and design, and strong sales in kitchen tools and
gadgets, baking, cleaning and dry food storage.
Sales in this category slipped 5.7% year over year to $140.2
million in the quarter due to challenging industrial conditions
and promotional retail environment.
This category climbed 4.8% year over year to $165.7 million in
the reported quarter, reflecting better product mix and product
introductions supported by effective marketing. Air purification
product category contributed to sales gain during the
Other Financial Details
Cash and cash equivalents at the end of the third quarter of
fiscal 2014 stood at $28.8 million compared with $10.1 million in
the prior quarter ended Aug 2013. Total debt went up to $194.0
million from $108.4 million in the prior quarter ended Aug
Helen of Troy expects higher product costs and a difficult retail
condition in the coming quarters. The company maintained its
earnings guidance range of $3.50 to $3.60 per share for fiscal
2014. The Zacks Consensus Estimate is pegged at $3.57 which is in
line with the management's guidance range.
It also maintained its fiscal 2014 net sales guidance range of
$1.29 billion to $1.32 billion. It expects capital expenditures
in the range of $40 million to $45 million.
Other Stocks to Consider
Currently, Helen of Troy holds a Zacks Rank #3 (Hold). A
better ranked stock in the same industry that looks attractive at
the current levels is
Nu Skin Enterprises Inc.
) carrying a Zacks Rank #1 (Strong Buy). Other consumer staple
stocks worth considering include
The Men's Wearhouse, Inc.
Shoe Carnival Inc.
), both carrying a Zacks Rank #2 (Buy).
HELEN OF TROY (HELE): Free Stock Analysis
MENS WEARHOUSE (MW): Free Stock Analysis
NU SKIN ENTERP (NUS): Free Stock Analysis
SHOE CARNIVAL (SCVL): Free Stock Analysis
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