Helen of Troy hit by $66M impairment as tariffs squeeze margins

Helen of Troy Limited (NASDAQ:HELE) reported third-quarter fiscal 2026 results that reflected ongoing headwinds in the consumer discretionary sector.

The company posted a GAAP diluted loss per share of $3.65, a sharp reversal from the $2.17 profit a year ago, primarily due to a $65.9 million non-cash asset impairment charge ($3.11 per share) related to its Beauty & Wellness and Home & Outdoor segments.

Consolidated net sales fell 3.4% to $512.8 million, missing the Zacks Consensus Estimate of $505.4 million slightly on the upside but still trending downward year-over-year.

The decline was driven by softer consumer demand and lower replenishment orders from retailers.

Gross profit margin contracted by 200 basis points to 46.9%, as the company struggled with higher tariff costs and a shift toward more promotional retail environments.

Despite the GAAP loss, adjusted diluted EPS came in at $1.71, down from $2.67 last year.

Management highlighted that while sales were pressured, cash flow remained a bright spot, with net cash from operations rising to $11.9 million.

The company is leaning heavily into Project Pegasus, its global restructuring initiative, to find cost savings to offset rising logistics and outbound freight expenses.

"We continue to navigate a more promotional environment and consumer trade-down behavior," management noted in the filing.

To combat these trends, the company updated its full-year fiscal 2026 guidance, now expecting consolidated net sales in the range of $1.758 billion to $1.773 billion.