Helen of Troy Reports 10.8% Revenue Decline and $450.7 Million Net Loss in Q1 Fiscal 2026

Helen of Troy Limited reported a significant decline in financial performance for the first quarter of fiscal 2026, ending May 31, 2025. The company recorded net sales revenue of $371.7 million, a decrease of 10.8% from $416.8 million in the same period last year. This decline was primarily driven by a drop in organic business sales, which fell by $71.0 million, or 17.0%, due to reduced replenishment orders from retail customers and lower consumer demand across its product categories. The company also faced challenges from increased competition and a net distribution loss in its Beauty & Wellness segment.

The operating loss for the quarter was $407.0 million, compared to an operating income of $30.8 million in the prior year. This substantial loss included pre-tax asset impairment charges of $414.4 million, which significantly impacted the company's profitability. The net loss for the quarter was $450.7 million, translating to a diluted loss per share of $19.65, a stark contrast to the diluted earnings per share of $0.26 reported in the previous year. The company attributed these results to a combination of factors, including unfavorable market conditions, increased operational costs, and the impact of its recent acquisition of Olive & June, which contributed $26.8 million to revenue.

In terms of strategic developments, Helen of Troy completed the acquisition of Olive & June, an omni-channel nail care brand, on December 16, 2024. The acquisition was valued at $224.7 million, net of cash acquired, with additional contingent cash consideration of up to $15.0 million based on performance targets. This acquisition is expected to enhance the company's Beauty & Wellness segment and broaden its product offerings. However, the company also faced significant asset impairment charges related to its existing brands, particularly in the Home & Outdoor and Beauty & Wellness segments, which totaled $414.4 million.

Operationally, the company reported a decrease in customer engagement metrics, with a notable decline in online channel sales, which accounted for approximately 23% of total net sales revenue, down from 25% in the previous year. The company also experienced challenges in its supply chain, particularly due to tariff-related issues affecting imports from China and other regions. As of May 31, 2025, Helen of Troy had $22.7 million in cash and cash equivalents, with cash provided by operating activities amounting to $58.3 million for the quarter, an increase from $25.3 million in the prior year.

Looking ahead, Helen of Troy anticipates continued challenges due to macroeconomic factors, including inflation and evolving consumer spending patterns. The company is focused on implementing cost-saving measures and optimizing its operations to navigate these uncertainties. Management remains committed to leveraging its recent acquisition and enhancing its product portfolio while addressing the impacts of tariffs and competition in the market.