Helen of Troy (NASDAQ:HELE), the consumer products maker, was the toast of the town last quarter, but was a bit cautious about extending the good times into the second half of the year. That caution was warranted, but company execs still ended up with egg on their face as they had to take down guidance significantly for the full year this quarter -- guidance they only reaffirmed last quarter. The lowered numbers are significant, as earnings per share are now estimated to come in at $1.53 to 1.58, versus the $1.70 to 1.80 expected previously.

I'm not surprised; as the Foolish Forecast shows, results have been deteriorating for a while. Management hasn't shown much skill in being able to leverage its results in the wake of the OXO acquisition. It has all added up to uneven results and shareholder disappointment. Granted, the stock is now value-priced, but with sales up only 8% to $213.4 million and net income essentially flat year over year, it is clear that some type of discount is warranted.

The culprit once again was margins, as pressures in the personal care and the housewares segments, as well as expenses associated with the OXO warehouse transition, had a negative impact this quarter. On the flip side, inventory management has improved, reversing what has long been a thorn in management's side, as inventories were only $146.2 million this time around, versus $184.7 million last year. Still, that one small bright spot isn't enough to offset what has been apparent for some time: The ship is struggling, presumably as both Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) are putting tremendous pressure on margins.

Perhaps realigning operations globally will help in 2007 and 2008, as management is starting the gate fairly optimistic, calling for earnings per share in excess of $2.00 for the full year. However, color me skeptical, as management hasn't shown much propensity for getting the numbers in the ballpark recently.

Granted, forecasting is a tough business, and I'd be much happier if none of the companies I owned even gave earnings guidance, as it really doesn't matter a whit to long-term shareholders. It just gives ample opportunity for management to screw up, and forces far too much attention on short term results. With that in mind, though, Helen of Troy has quite a road ahead of it to regain both Wall Street's and shareholders' trust, as well as turn around its wrinkly business. I don't hold out much hope for this one.

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Fool contributor Stephen Ellis does not own shares in any companies mentioned. You can view the stocks he owns and check out his 99th percentile ranking in Motley Fool CAPS, the Fool's new stock-rating community. The Motley Fool has a disclosure policy.