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Helen of Troy Limited HELE is likely to register a top and bottom-line decline when it reports third-quarter fiscal 2025 earnings on Jan. 8. The Zacks Consensus Estimate for revenues is pegged at $530.4 million, implying a 3.5% decrease from the prior-year quarter’s reported figure.

The consensus mark for earnings has remained unchanged in the past 30 days at $2.61 per share, indicating a 6.5% fall from the figure reported in the year-ago period. HELE has a trailing four-quarter negative earnings surprise of 4.6%, on average.

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Helen of Troy Limited Price, Consensus and EPS Surprise

Helen of Troy Limited price-consensus-eps-surprise-chart | Helen of Troy Limited Quote

Factors Likely to Influence HELE’s Upcoming Results

Helen of Troy is navigating a challenging macroeconomic environment characterized by reduced consumer and retailer demand. Consumers are facing financial constraints and prioritizing essential purchases over discretionary items. This has been impacting the company’s sales. We expect a 4% drop in organic volumes in the third quarter.

Helen of Troy has also been grappling with rising SG&A expenses. In the second quarter, the rise in the consolidated SG&A ratio was mainly due to elevated marketing expenses, increased distribution center costs linked to automation issues at the Tennessee facility and unfavorable operating leverage. The persistence of any of these factors is a concern. Our model suggests a 90-basis point expansion in adjusted SG&A (as a percentage of sales) to 32.8% for the quarter under review.

Due to external headwinds, including increased promotional activity, softer and more variable retail replenishment and ongoing macroeconomic pressures and uncertainty, management revised parts of its fiscal 2025 forecast in the second-quarter earnings release. This also raises concerns for the third quarter. For the third quarter of fiscal 2025, the company expects a decline in sales of 1-4.5%, while the adjusted EPS is likely to decrease 3-10%.

However, strength in the Leadership Brands has been working well for Helen of Troy. The company’s strategic initiatives, focusing on strengthening core operations and refining its growth portfolio, have also been offering respite. By leveraging a data-driven approach, the company is improving brand fundamentals. Expansion efforts in key international markets and the optimization of distribution networks are expected to have aided sales performance. Apart from this, HELE’s global restructuring plan, Project Pegasus, is likely to have generated savings.