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Helen of Troy Limited Message Board

  • marketswise marketswise Oct 8, 2008 11:25 PM Flag

    Helen of Troy Results

    Helen of Troy reported their 2Q results this A.M. The earnings were .34 vs .32 cents for the quarter and .76 cents vs .64 cents for the six months ending 8/31/08. As I stated in my outlook, I expected the results to be good, but not as good as the first quarter due to the challenging economic environment. While the company experienced a decline in their personal care business of about 10%, they achieved just shy of a 20% increase in the OXO Housewares line, which is rapidly becoming the "flagship" business line of HELE. OXO's brand and margins continue to lead the way for Helen Of Troy and resulted in a positive quarter in a very difficult environment. The companies gross margins should improve in the next few quarters as oil prices have declined significantly contributing to lower raw material costs, a stronger dollar and selective price increases that the company has implemented. The operating margin should continue to improve from the fully operative new warehouse's distribution cost savings. Also, the conference call revealed that the company believes any private label business that had been temporarily lost was being recaptured as the retailers returned to brand name items which moved at retail vs. private labeling. The company also said on the call that the first month of the current quarter(September) was good and they were pleased with the results considering the very difficult environment.

    AND guess what? The Wedbush analyst appeared again with his usual sell recommendation. This time he had to look for a new reason and used the personal care line as his area of attack. However, he completely ignores the fact that OXO is now the line of the future for HELE and it is doing very well in the challenging environment. He also decided not to have a sell recommendation and have one of the "highest" EPS projections, so he made a point of stating that his EPS forecast was below consensus for several reasons of which he has used in the past. Again, it seems that this analyst's motivations for his recommendation on HELE might be an area for his company to look into.

    I continue to expect Helen of Troy to reach the $30 price range in the next six months.

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HELE
59.77+0.44(+0.74%)Oct 24 4:00 PMEDT

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