Net Sales Decline 0.7% for Helen of Troy Limited in Q4 2025

Net sales for Helen of Troy Limited decreased 0.7% in Q4 2025 for the three-month period ended February 28, 2025.

Consolidated net sales were $485.9 million compared to the prior-year quarter of $489.2 million. Gross profit margin was 48.6% compared to 49.0% with an operating margin of 0.4%, which includes non-cash asset impairment charges of $51.5 million, compared to 13.5%.

During the quarter, the company saw strengths in wellness, OXO, Osprey and International, and a better-than-expected contribution from Olive & June.

“Stepping back to look at the full fiscal year, we accomplished a number of important objectives, including taking the necessary and focused actions to Reset & Revitalize our brands and business, delivering the largest year of Project Pegasus savings, and adding an immediately accretive brand to our global portfolio with the acquisition of Olive & June,” said CEO Noel M. Geoffroy. “Our efforts to improve the health of our brands and our operating performance are producing results. In Fiscal 2025 we grew or maintained market share in five of our key categories in our US measured channels, where seven of our brands hold number one or number two positions in their respective categories, and we grew international net sales.”

Performance by Segment

Home & Outdoor net sales revenue decreased $3.5 million, or 1.6%, to $219.8 million, compared to $223.3 million, with the decline driven by the insulated beverageware category, partially offset by growth in packs and the home category. The decrease was primarily due to continued competitive intensity in the insulated beverageware category, softer overall consumer demand, lower replenishment orders from retail customers, a decrease in closeout channel sales and lower club sales in the home category. These factors were partially offset by higher international sales across all categories, an increase in online channel sales in the home category, and new and expanded retailer distribution in the insulated beverageware and home categories.

Home & Outdoor operating income was $32.3 million, or 14.7% of segment net sales revenue, compared to $35.0 million, or 15.7% of segment net sales revenue. The 100-basis point decrease in segment operating margin was primarily due to a less favorable product and customer mix and an increase in restructuring charges of $2.6 million. These factors were partially offset by lower commodity and product costs, favorable inventory obsolescence expense, and lower annual incentive and share-based compensation expenses. Adjusted operating income decreased 5.8% to $39.3 million, or 17.9% of segment net sales revenue, compared to $41.7 million, or 18.7% of segment net sales revenue.
Beauty & Wellness net sales revenue increased $0.2 million, or 0.1%, to $266.1 million, compared to $265.9 million, primarily due to the contribution from the acquisition of Olive & June of $23.0 million, or 8.7% to segment net sales revenue growth. This growth was partially offset by a decrease from organic business of $21.2 million, or 8.0%, primarily due to a decline in hair appliances and prestige hair liquids due to softer consumer demand, continued competitive intensity and a net distribution decline. These factors were partially offset by growth in Wellness across most product categories, including air purification, heaters, humidification, fans and thermometry, partially offset by a decline in water filtration due to the previously disclosed expiration of an out-license relationship and category softness.

Beauty & Wellness operating loss was $30.3 million, or 11.4% of segment net sales revenue, compared to $31.2 million, or 11.7% of segment net sales revenue. The decrease in segment operating margin was primarily due to non-cash asset impairment charges of $51.5 million, acquisition-related expenses in connection with the Olive & June transaction, a less favorable product mix, and higher marketing and new product development expense as the segment reinvested back into its brands. These factors were partially offset by favorable inventory obsolescence expense, lower annual incentive compensation expense, and lower commodity and product costs. Adjusted operating income decreased 13.9% to $35.8 million, or 13.4% of segment net sales revenue, compared to $41.5 million, or 15.6% of segment net sales revenue.

Pegasus Restructuring Plan

The company previously announced a global restructuring plan intended to expand operating margins through initiatives designed to improve efficiency and effectiveness and reduce costs. “Project Pegasus” includes multiple workstreams to further optimize the company’s brand portfolio, streamline and simplify the organization, accelerate and amplify cost of goods savings projects, enhance the efficiency of its supply chain network, optimize its indirect spending and improve its cash flow and working capital, as well as other activities. These initiatives have created operating efficiencies, as well as provided a platform to fund growth investments.

During the fourth quarter of fiscal 2025, the company completed Project Pegasus, which resulted in total pre-tax restructuring charges of $60.9 million, of which $18.7 million were recognized in Home & Outdoor and $42.2 million in Beauty & Wellness. Total pre-tax restructuring charges were slightly above the high end of the Company’s range previously disclosed of $55 million primarily due to incurring higher severance and employee related costs, but well below the Company’s original expectations of $85 million to $95 million when the project was initiated. Pre-tax restructuring charges represented primarily cash expenditures and were substantially paid by the end of fiscal 2025, with a remaining liability of $7.7 million as of February 28, 2025, which is expected to be paid during fiscal 2026.

Regarding Project Pegasus savings, the company expects the following achievements:

Targeted annualized pre-tax operating profit improvements of approximately $75 million to $85 million, which began in fiscal 2024 and are expected to be substantially achieved by the end of fiscal 2027;

Estimated cadence of the recognition of the savings will be approximately 25% and 35% in fiscal 2024 and 2025, respectively, which were both achieved, and approximately 25% and 15% in fiscal 2026 and 2027, respectively; and

Total profit improvements to be realized approximately 60% through reduced cost of goods sold and 40% through lower SG&A.

Fiscal 2026 Business Update

Due to evolving global tariff policies and the related business and macroeconomic uncertainty, the company is not providing an outlook for fiscal 2026. The company says it’s in the process of assessing the incremental tariff impact in light of continuing changes to global tariff policies, and the full extent of its potential mitigation plans, as well as the associated timing to fully execute such plans in a rapidly changing macro environment.

To mitigate the company’s risk of ongoing exposure to tariffs, it has intensified efforts to diversify its production outside of China into regions where it expects tariffs or overall costs to be lower and to source the same product in more than one region, to the extent it is possible and not cost-prohibitive. The company expects to reduce its cost of goods sold exposed to China tariffs to less than 20% by the end of fiscal 2026.

Through the combination of tariff mitigation actions and additional cost reduction measures, the company said it believes it can offset 70% to 80% of the tariff impact in fiscal 2026, based on tariffs currently in place.