Back to top

Image: Bigstock

Helen of Troy (HELE) Up on Solid Leadership Brands & Online Sales

Read MoreHide Full Article

Helen of Troy Limited (HELE - Free Report) is benefiting from its Leadership Brands and strength in the online business. The company continues to focus on strategic growth efforts. These were reflected in its first-quarter fiscal 2022 results, with the top and the bottom line beating the Zacks Consensus Estimate as well as increasing year over year.

The currently Zacks Rank #2 (Buy) stock has increased 7.4% in the past three months compared with the industry’s 1.8% growth.

Let’s discuss further.

Focus on Leadership Brands

Helen of Troy has been focused on making solid investments in its Leadership Brands, which is a portfolio of market leading brands. Brands in this portfolio are positioned well to enhance market share. Leadership Brands’ net sales increased 22.9% in the first quarter of fiscal 2022. The company’s constant investments in these brands, considered to be the most productive, have been delivering robust results. The company made another move in this direction, when it acquired Drybar Products in January 2020. As part of its strategy to focus on Leadership Brands, Helen of Troy divested its mass market Personal Care business (excluding the Latin America and Caribbean regions) to HRB Brands LLC on Jun 8.

Zacks Investment Research
Image Source: Zacks Investment Research

Solid Digital Efforts

The company has been gaining from consistent online sales and digital-marketing efforts. Although online sales growth moderated in the first quarter of fiscal 2022, it rose nearly 4% year over year and contributed nearly 22% to the company’s top line. Management is on track to make continued investments in this arena to keep pace with the evolving consumer environment. The company has been consistently augmenting its digital presence through sophisticated marketing plans and enhanced content.

What Else is Driving Growth?

Helen of Troy is making major investments in key areas to keep driving growth. To this end, it is focused on investing in consumer-centric innovations, digital marketing and media, new packaging, enhanced production and distribution capacity as well as direct-to-consumer channels among others. Management continues to invest in key growth areas as part of the Phase II Transformation efforts. In sync with the same, Helen of Troy recently finalized a land purchase in Gallaway, TN to construct a state-of-the-art distribution center.

Growing the international business is also an integral part of the company’s Phase II transformation plan. Management made several investments in the second half of fiscal 2021 to support its distribution in Continental Europe and U.K. businesses among others, to boost growth in the international markets. Moreover, the company expects to create further value through strategic acquisitions in the future.

We believe that such well-chalked out growth efforts and the aforementioned upsides are likely to keep Helen of Troy well positioned.

Top 3 Staple Picks

Nu Skin Enterprises, Inc. (NUS - Free Report) , currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 15.7%, on average.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Medifast, Inc. (MED - Free Report) , currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 16%, on average.

Sysco Corporation (SYY - Free Report) , currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 13.3%, on average.