Helen of Troy Earnings Preview

Helen of Troy (Nasdaq: HELE  ) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings on Thursday. Helen of Troy is a global designer, developer, importer, and distributor of a portfolio of brand-name consumer products.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Helen of Troy with analysts unanimously rating it hold. Analysts don't like Helen of Troy as much as competitor Zep overall. Two out of four analysts rate Zep a buy compared to zero of three for Helen of Troy.
  • Revenue forecasts: On average, analysts predict $323.9 million in revenue this quarter. That would represent a rise of 58% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.02 per share. Estimates range from $0.99 to $1.04.

What our community says:
The majority of CAPS All-Stars see HELE as a good bet, with 61% granting it an outperform rating. The majority of the Fools are in agreement with the All-Stars as 74.3% give it an outperform rating. Fools are keen on Helen of Troy, though the message boards have been quiet lately with only 44 posts in the past 30 days. Helen of Troy's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Revenue has now gone up for three straight quarters. The company's gross margin shrank by 4.7 percentage points in the last quarter. Revenue rose 69.5% while cost of sales rose 84.2% to $161.6 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

40.5%

43.8%

45.2%

45.9%

Operating Margin

11.3%

12.6%

15.4%

15.8%

Net Margin

9.1%

10.3%

13.2%

13.4%

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Earnings estimates provided by Zacks


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