Helen of Troy (HELE) Up More Than 50% in 3 Months: Here's Why
Helen of Troy Limited HELE appears well positioned, courtesy of strength in its strategic initiatives, including Project Pegasus. The leading consumer products player is benefiting from growing Leadership Brands.
Shares of this Zacks Rank #2 (Buy) company have increased 54.3% in the past three months against the industry’s decline of 16.2%. The company’s stock has outpaced the Zacks Consumer Staples’s drop of 1.1% during this time.
Let’s take a closer look at the factors driving HELE’s growth.
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Project Pegasus Looks Promising
Helen of Troy is focused on developing a global restructuring plan, Project Pegasus. The plan aims to expand operating margins via initiatives designed to improve efficiency and reduce costs. Project Pegasus includes optimizing HELE’s brand portfolio, streamlining and simplifying the organization, growing the cost of goods saving projects and improving the efficiency of the supply-chain network. Further, the project aims to streamline indirect spending and improve cash flow and working capital.
As part of Project Pegasus, management unified its Beauty and Health & Wellness businesses into one segment — Beauty & Wellness — in the fourth quarter of fiscal 2023. The changes include creating a North America Regional Market Organization to take care of sales and go-to-market strategies for all categories and channels in the United States and Canada. The formation of the organization is helpful in securing new distribution, implementing joint business plans among others. HELE also announced the further centralization of various functions under shared services, mainly Operations and Finance.
Management expects to achieve Project Pegasus annualized pre-tax operating profit improvements of $75-85 million, to be substantially generated by fiscal 2026-end. Management is on track to deliver $20 million of savings during fiscal 2024.
What Else is Working Well for HELE?
Helen of Troy is making major investments in key areas to continue driving growth. To this end, the company is focused on investing in consumer-centric innovation, digital marketing and media, new packaging, enhanced production and distribution capacity and direct-to-consumer channels among others.
The company’s solid investments in its Leadership Brands, which is a portfolio of market leading brands, is yielding well. Brands in this portfolio account for a significant chunk of the company's sales, which generate solid margins and volumes. In its first-quarter fiscal 2024 earnings call, management highlighted that its key leadership brands like OXO, Osprey and PUR as well as Curlsmith outperformed. Various leadership brands are seeing improved share in certain categories across the United States.
All said, we believe that focus toward such growth endeavors is likely to help Helen of Troy keep its growth story going.
Other Top Ranked Staple Stocks
Here we have highlighted three other top-ranked stocks, namely TreeHouse Foods, Inc. THS, Lamb Weston Holdings LW and Celsius Holdings CELH.
TreeHouse Foods, a manufacturer of packaged foods and beverages, currently sports a Zacks Rank #1 (Strong Buy). THS has a trailing four-quarter earnings surprise of 49.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TreeHouse Foods’ current financial-year’s sales suggests a decline of 12.4% from the year-ago reported numbers.
Lamb Weston, a leading supplier of frozen potato, sweet potato, appetizer and vegetable products to restaurants and retailers worldwide, carries a Zacks Rank #2. LW has a trailing four-quarter earnings surprise of 47.6%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year’s sales and earnings indicates growth of 29.6% and 117.3%, respectively, from the year-ago reported figures. The expected EPS growth rate for three to five years is 42.7%.
Celsius Holdings, which offers functional drinks and liquid supplements, carries a Zacks Rank #2 at present. CELH delivered an earnings surprise of 81.8% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year’s sales and earnings implies surges of 69.6% and 154.4%, respectively, from the prior-year numbers.
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TreeHouse Foods, Inc. (THS) : Free Stock Analysis Report
Helen of Troy Limited (HELE) : Free Stock Analysis Report
Lamb Weston (LW) : Free Stock Analysis Report
Celsius Holdings Inc. (CELH) : Free Stock Analysis Report
