Helen of Troy Reports $1.91 Billion in Net Sales, 4.9% Decline for Fiscal Year Ending February 2025

Helen of Troy Limited reported a consolidated net sales revenue of $1.91 billion for the fiscal year ending February 28, 2025, a decrease of 4.9% from $2.01 billion in the previous fiscal year. The decline was primarily attributed to a significant drop in the Beauty & Wellness segment, which saw an 8.0% decrease in sales, largely due to reduced consumer demand and increased competition. The Home & Outdoor segment also experienced a slight decline of 1.1%. Operating income fell sharply by 45.2% to $142.7 million, with the operating margin decreasing to 7.5% from 13.0% in the prior year. This decline was impacted by asset impairment charges of $51.5 million and restructuring charges of $14.8 million related to the ongoing Project Pegasus initiative.

In terms of strategic developments, Helen of Troy completed the acquisition of Olive & June, a nail care brand, on December 16, 2024, for an initial cash consideration of $229.4 million. This acquisition is expected to enhance the Beauty & Wellness segment and contribute to future growth. The company also reported a goodwill impairment charge of $38.7 million related to its Drybar business, reflecting ongoing challenges in that segment. Additionally, the company has been consolidating its operations, including the relocation of its Beauty business to the Boston area, which is anticipated to create synergies and improve efficiency.

Operationally, Helen of Troy's customer base remains concentrated, with its top five customers accounting for approximately 49% of consolidated net sales revenue in fiscal 2025. Amazon.com Inc. was the largest customer, contributing 22% of total sales. The company has also been focusing on enhancing its e-commerce capabilities, with online sales comprising about 27% of total net sales. However, the company faced challenges in fulfilling orders due to automation issues at its new distribution facility in Gallaway, Tennessee, which impacted sales during the first quarter of fiscal 2025.

Looking ahead, Helen of Troy is implementing its "Elevate for Growth" strategy, which aims to drive organic sales growth and margin expansion through strategic acquisitions and improved operational efficiencies. The company anticipates that the initiatives under Project Pegasus will yield annualized pre-tax operating profit improvements of approximately $75 million to $85 million by the end of fiscal 2027. However, the company also faces risks from macroeconomic conditions, including inflation and changing consumer spending patterns, which could continue to impact its financial performance in the near term.