Last week global consumer products company
Helen of Troy Limited
) posted flat year-over-year earnings of 72 cents per share in
the second quarter of fiscal 2014 as higher sales were offset by
decline in margins during the quarter. Earnings, however, missed
the Zacks Consensus Estimate of 73 cents by a penny.
During the quarter, total sales increased 11.1% year over year
to $319.4 million. The increase was driven by 20.4%
year-over-year improvement in the Healthcare/Home Environment
segment backed by Helen's aggressive promotion and marketing
strategy and favorable weather conditions in Europe. Total sales
also exceeded the Zacks Consensus Estimate of $310 million.
Gross margin shrank 210 basis points (bps) to 38.6% due to
product cost increase and unfavorable product mix. Operating
income margin shrank 120 basis points due to higher selling,
general and administrative expenses during the quarter.
Housewares: Sales in the Housewares category climbed 8.7% to
$70.2 million compared with the year-ago period, backed by
innovation in product and design.
Personal Care: Sales in this category climbed 3.4% year over year
to $116.2 million in the quarter driven by new product
distribution arrangement in Europe and higher sales in the
company's professional appliance business.
Healthcare Environment: This category climbed 20.4% year over
year to $133.0 million in the reported quarter, reflecting higher
promotional and marketing measures to boost sales.
Other Financial Details
Cash and cash equivalents at the end of the second quarter of
fiscal 2014 stood at $10.1 million compared to $12.1 million in
the prior quarter. Total debt reduced to $108.4 million from
$224.8 million in the prior quarter.
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 for fiscal 2014. It
also maintained its fiscal 2014 net sales guidance range of $1.29
billion to $1.32 billion.
Other Stocks to Consider
Currently, Helen of Troy holds a Zacks Rank #3 (Hold). Others
players in the same industry that look attractive at the current
Nu Skin Enterprises Inc.
Elizabeth Arden Inc.
Avon Products Inc. (
). While Nu Skin carries a Zacks Rank #1 (Buy), Elizabeth Arden
and Avon Products carry a Zacks Rank #2 (Buy).
AVON PRODS INC (AVP): Free Stock Analysis
HELEN OF TROY (HELE): Free Stock Analysis
NU SKIN ENTERP (NUS): Free Stock Analysis
ELIZABETH ARDEN (RDEN): Free Stock Analysis
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