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Helen of Troy Outperforms in Q3

Earnings up on higher sales, product innovation and acquisitions.

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By: TOM BRANNA

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Helen of Troy Limited recorded better-than-expected earnings of $1.18 a share in the third quarter of fiscal 2013, topping an analyst’s estimate of $1.13 and the prior-year earnings of $1.04 a share. Despite sluggish retail sales environment, the company generated strong earnings owing to higher sales, product innovation and gains from acquisitions.

During the quarter, total sales increased 10.6% to $374.6 million. The increase was attributable to higher sales in the healthcare segment, driven by sales increase from the acquisition of the Pur water filtration business from Procter & Gamble in December, 2011. Total sales however lagged analysts’ estimate of $377 million.

More specifically, personal care sales fell 0.2% to $148.6 million in the third quarter of fiscal 2013. However, it contributed positively to earnings.


In other news, Helen of Troy will purchase 84 acres of land and construct a new 1.3 million square foot distribution center in Olive Branch, MS, for a total estimated cost of approximately $37 million. Helen expects the new distribution center to be ready for operation in the third fiscal quarter of fiscal 2014. With this new distribution center, Helen will have a total of 2.5 million square feet of owned and operated distribution capacity in DeSoto County, MS.


For fiscal 2013, the company expects uncertain consumer spending behavior due to pending domestic tax changes and federal legislation in the coming quarters. Helen has thus reduced its fiscal 2013 net sales guidance to a range of $1.275 billion to $1.3 billion from its previous range of $1.3 billion to $1.325 billion. However, the company has maintained its earnings guidance for fiscal 2013 in the range of $3.50 to $3.60 per share.



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