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Bull of the Day: Helen of Troy

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Helen of Troy Limited (HELE - Free Report) is seeing strong results from its turnaround strategy. This Zacks Rank #1 (Strong Buy) recently raised fiscal 2020 guidance.

Helen of Troy is a consumer products company with various popular brands in the houseware, health and home and beauty segments including OXO, Hydro Flask, Vicks, Braun, Honeywell, PUR and Hot Tools.

Another Beat in the Fiscal First Quarter

On July 9, Helen of Troy reported fiscal first quarter of 2020 and crushed the Zacks Consensus by 38 cents. Earnings were $2.06 versus the Zacks Consensus of $1.68.

This extended the company's excellent earnings surprise track record. It hasn't missed since Zacks data began in 2016.



Net sales rose 6.1% to $376.3 million up from $354.7 million a year ago due to a gain in its core business of 6.8%.

The core was helped by an increase in brick and mortar sales in the Housewares segment, growth in consolidated online sales and an increase in appliance sales in the Beauty segment.

The Leadership Brand category saw net sales jump 7.4%. Online sales grew by the double digits and now make up 23% of consolidated sales.

International sales in the Health & Home segment, however, moved lower and it saw a decline in the Personal Care sales within the Beauty segment.

Raised Fiscal 2020 Guidance

Given the strength of the quarter, it's not a surprise the company moved to raise its guidance.

It now expects net sales in the range of $1.59 to $1.62 billion, which is growth of 1.7% to 3.6%. That's higher than the prior guidance of 1% to 3% for the year.

Housewares is now expected to grow 6% to 8%, up from prior guidance of 4% to 6%. Health & Home and Beauty are expected to remain the same as the prior guidance with Health & Home sales growth of 2% to 3% and Beauty to see a decline in the low-single digits.

Earnings are now expected to be in the range of $8.40 to $8.65, up from the prior forecast of $8.25 to $8.50.

Analysts are Bullish

Not surprisingly the analysts have been raising estimates with 2 estimates for fiscal 2020 rising to $8.53 from $8.36 in the last 90 days.

That's earnings growth of 5.8% as the company made $8.06 last year.

The analysts are also bullish about fiscal 2021 as those estimates have also moved higher over the last 3 months, jumping to $9.05 from $8.77 during that period. That's a gain of 6.1%.

Shares at New 2-Year Highs

Another earnings beat gave a boost to the shares, which are now up 35% over the last 2 years.



Helen of Troy is no longer cheap. It's trading with a forward P/E of 17.8.

But it's shareholder friendly as the company announced a new $400 million share buyback program in May 2019 which is expected to be good for 3 years.

For investors looking to buy a consumer products company with strong brands, Helen of Troy is one to keep on the short list.

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