LONDON, UK / ACCESSWIRE / October 13, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Helen of Troy Ltd (NASDAQ: HELE), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=HELE, following the Company's announcement of its second quarter fiscal 2018 financial results on October 5, 2017. The personal and household products outperformed top- and bottom-line expectations and also provided guidance for the fiscal year 2018. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For the three-month period ended August 31, 2017, Helen of Troy's consolidated net sales increased $378.5 million, compared to $368.2 million in Q2 FY17, reflecting an increase of 2.8%. Helen of Troy's revenue numbers beat Wall Street's estimates of $377.09 million.

During Q2 FY18, Helen of Troy's consolidated gross profit margin increased 0.1 percentage point to 44.4% versus 44.3% in Q2 FY17. Helen of Troy's consolidated selling, general, and administrative (SG&A) expense increased by 0.2 percentage points to 34.3% of net sales, compared to 34.1% in Q2 FY17. The increase was primarily due to a $3.6 million charge related to the bankruptcy of Toys "R" Us, higher product liability expense and higher overall marketing, advertising, and new product development expense in support of the Company's Leadership Brands.

For Q2 FY18, Helen of Troy's GAAP operating income was $20.1 million, or 5.3% of net sales, compared to $37.5 million, or 10.2% of net sales, in Q2 FY17. The Company's adjusted operating income totaled $51.5 million, or 13.6% of net sales, in the reported quarter, compared to $47.9 million, or 13.0% of net sales, in the year ago same period.

Helen of Troy's net income was $8.9 million, or $0.33 per diluted share, for Q2 FY18, compared to $28.4 million, or $1.00 per diluted share, in Q2 FY17. The Company's net income for the reported quarter included an after-tax non-cash asset impairment charge of $24.6 million and a charge of $3.4 million related to the bankruptcy of Toys "R" Us, with no comparable charges for the same period last year.

The Company's adjusted income increased to $45.2 million, or $1.65 per diluted share, for the quarter under review compared to $37.0 million, or $1.31 per diluted share, in the year earlier same quarter, primarily reflecting the impact of higher adjusted operating income across all segments except for the Nutritional Supplements segment, and lower weighted average diluted shares outstanding y-o-y. Helen of Troy's earnings smashed past Wall Street's estimates of $1.35 per share.

Helen of Troy's Segment Results

During Q2 FY18, the Housewares' core net sales increased by 8.25% to $114.72 million on a y-o-y basis, reflecting an increase in online channel sales, incremental distribution with existing customers, expanded international and U.S. distribution, and new product introductions. The segment's GAAP operating margin was 20.5% versus 22.9% in the year ago comparable period.

For Q2 FY18, the Health & Home's net sales advanced 2.4% to $147.86 million on a y-o-y basis, attributed to growth in online channel sales, strong sales in certain seasonal categories, incremental distribution with existing customers, new product introductions, and growth in international sales. The division's GAAP operating margin was 5.2% in the reported quarter compared to 6.5% in the year earlier same quarter.

The Beauty core business' net sales were unchanged at $84.6 million in Q2 FY18. The Company stated that solid growth in both retail and professional appliance sales was offset by declines in the personal care category, primarily due to competitive conditions. The segment's GAAP operating margin was 10.8% compared to 6.0% in the year ago corresponding period.

For Q2 FY18, the Nutritional Supplements' net sales decreased 5.6% to $31.26 million on a y-o-y basis, reflecting a decline in auto-delivery revenue, partially offset by increases in direct mail and third-party retail sales. The segment's operating loss was $20.3 million compared to an operating loss of $1.2 million in the same period last year.

Helen of Troy plans to restructure this business as part of Project Refuel in an effort to improve its performance and expects 15% - 25% of the total targeted savings from Refuel to benefit Nutritional Supplements. Helen of Troy noted that it continues to pursue strategic alternatives for this segment, which could include divestiture, further restructuring or realignment programs, and consolidation of operations and functions.

Balance Sheet Highlights

As of August 31, 2017, Helen of Troy's cash and cash equivalents totaled $13.7 million, compared to $25.8 million on August 31, 2016. The Company's total short- and long-term debts were $444.3 million at the end of the reported quarter, compared to $548.6 million at the end of the year ago period, a net decrease of $104.3 million. In Q2 FY18, Helen of Troy's accounts receivable turnover was 55.7 days, compared to 54.8 days. For the reported quarter, the Company's inventory was $325.6 million, compared to $317.5 million in the year ago same period, while inventory turnover was 2.8 times, compared to 2.7 times.

Fiscal 2018 Outlook

For fiscal 2018, Helen of Troy is forecasting consolidated net sales revenue in the range of $1.560 to $1.585 billion, which implies consolidated sales growth of 1.5% to 3.1%. The Company expects Housewares' net sales to grow in the range of 8% to 10% on a y-o-y basis, while it expects Health & Home's net sales growth in the mid-single digits, Beauty's net sales decline in the mid-single digits, and Nutritional Supplements' net sales decline in the mid-single digits.

Helen of Troy is estimating consolidated GAAP diluted EPS of $4.01 to $4.34 and non-GAAP in the range of $6.50 to $6.90. The Company is initiating Project Refuel, which is targeted to achieve annualized pre-tax cost savings of $10.0 million once the plan is substantially implemented. The Company expects the plan to be completed in approximately 18 months, with savings highly concentrated in fiscal 2019. The Company expects to incur restructuring charges related to this plan in the range of $4.0 million to $6.0 million over the course of the implementation period.

Stock Performance

At the closing bell, on Thursday, October 12, 2017, Helen of Troy's stock climbed 1.10%, ending the trading session at $92.20. A total volume of 190.98 thousand shares have exchanged hands, which was higher than the 3-month average volume of 155.89 thousand shares. The Company's stock price surged 1.82% in the past six months and 9.19% in the previous twelve months. Moreover, the stock gained 9.18% since the start of the year. The stock is trading at a PE ratio of 20.06 and currently has a market cap of $2.55 billion.

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