Helen of Troy Limited

Helen of Troy Limited (HELE - Snapshot Report), the maker of personal care and household products, recently surprised on estimates as sales rose 11% for household good products like OXO and Good Grips. Analysts expect year over year earnings growth of 19.71% despite tough retail conditions.

Company Description

Helen of Troy manufactures personal care and household consumer products sold by mass merchandisers and drug stores. In the personal care products segment, it makes hair dryers, curling irons, brushes, hair accessories, mirrors, hair styling products and skin care products under the licensed names Vidal Sassoon, Revlon, Dr. Scholl's, Sunbeam and its own brands of Final Net and Condition 3-in-1, among others.

Its home products include kitchen tools, cutlery, tea kettles, trash cans, gardening tools, barbeque tools and kitchen mitts. Its own brands include OXO and Good Grips.

Helen of Troy Surprised for the Second Consecutive Quarter

On July 9, Helen of Troy reported first quarter fiscal 2010 results that blew by analysts' estimates by 34.29%. Net income rose 11.2% to $14.509 million, or 47 cents per share, compared to $13.044 million, or 42 cents, in the year ago period, which was adjusted for significant items. Analysts expected just 35 cents.

Sales, however, fell 0.8%, to $143.873 million from $145.003 million in the first quarter of fiscal 2009. The household goods segment showed strength, with sales rising 11% year over year. It was boosted by the popularity of the OXO brand.

The personal care segment, which is the larger segment, fell 5% due to the difficult economic environment and negative impact of foreign currency fluctuations.

The company also kept administrative expenses in check, as they fell to 27.3% of sales compared to 31.4% in the year ago period.

At the end of the first quarter, Helen of Troy also had cash, cash equivalents and securities on hand of $50.088 million.

Estimates Climb

Helen of Troy didn't provide second quarter guidance but stated that the economic environment remains "challenging."

Still, covering analysts scrambled to raise estimates on the second quarter and fiscal 2010 after the big surprise in the first quarter.

Second quarter consensus jumped 4 cents to 38 cents per share in the last week.

2010 consensus rose 9.8% in the last week to $1.90 from $1.73 per share with 2 out of 3 analysts raising during that time.

Value Fundamentals

Helen of Troy is a Zacks #1 Rank (strong buy) stock. It has a forward P/E of 11.44. HELE has a price-to-book of just 1.16. The company also has a solid 5-year average return on equity (ROE) of 12.22%.

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