Why Helen of Troy Shares Tumbled

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of personal-care products maker Helen of Troy  (Nasdaq: HELE  ) fell as much as 12% after the company released a disappointing second-quarter earnings report.

So what: Revenue of $287.4 million was well off analyst expectations of $310 million, and an EPS of $0.72 also missed estimates of $0.85. Even worse, that figure represented a drop from last year's per-share profit of $0.74. The company, which makes products under the Revlon and Vidal Sassoon brands among other household names, also trimmed EPS guidance for the year to $3.50-$3.60 from $3.70-$3.80.

Now what: Without an increased tax bill, profits would have increased slightly for Helen of Troy, but still there's not much to like here. Only its health care division showed significant gains, with sales increasing 12%, and management did not offer much of an explanation for the big miss, only blaming a "challenging retail and worldwide economic environment." Throwing a bone to investors, they touted a strong balance sheet and a share repurchase plan, but said little about operations. With a P/E of 8.4, this stock may look like a bargain to some investors, but with little growth and no plan to reinvigorate its brands, Helen of Troy does not seem to be offering a compelling reason to invest right now.

Want to keep an eye on Helen of Troy? Just add Helen of Troy to your Watchlist.

Fool contributor Jeremy Bowman has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2052069, ~/Articles/ArticleHandler.aspx, 12/18/2014 5:00:21 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement