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Helen of Troy Up Post Q1: Earnings Beat Not the Sole Factor
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Helen of Troy Limited (HELE - Free Report) has seen its shares surge 26.4% in the past six months, against the industry’s drop of 11.4%. Much of this can be attributable to the company’s solid past record that was retained in first-quarter fiscal 2019. Notably, shares of the company have gained 14.2% since the quarterly outcome.
Let’s delve deeper into all the factors that are likely to sustain momentum of this Zacks Rank #2 (Buy) company.
Solid Q1 Results, Transformation Plan on Track
Helen of Troy posted spectacular results for first-quarter fiscal 2019 as both top and bottom lines improved year over year and came ahead of the Zacks Consensus Estimate. While sales marked its second straight beat, earnings kept its positive surprise streak alive for the 12th consecutive quarter. Moreover, management raised its bottom-line view and Project Refuel target. While earnings in the quarter were backed by improved adjusted operating income across all segments, reduced interest costs and lower share count, sales gained from continued strength in Leadership Brands, strong online sales and core business advancement.
Core business was backed by solid international sales, product introductions, rise in domestic brick and mortar sales, and sturdy online sales. Clearly, these upsides reflect management’s focus on its Transformation Plan that was announced in fiscal 2015. The plan mainly concentrates on making investments in core areas, undertaking customer-centric innovations, undertaking prudent mergers and acquisitions, building superior shared services, making upgrades to workforce and systems, and reducing wastage to improve quality and curtail costs. The company expects this plan to help enrich shareholders’ value.
Project Refuel Bodes Well
Helen of Troy introduced Project Refuel in October 2017. This restructuring plan was initiated to improve the performance of the company’s Beauty and Nutritional Supplements units. During the first quarter of fiscal 2019, the company expanded this program to realign and streamline its supply-chain network. Notably, management now expects Project Refuel to lead to annualized profit growth of nearly $8.0-$9.0 million, up from the old guidance of $8.0 million. The company expects to conclude Project Refuel by the first quarter of fiscal 2020.
Robust Digital Initiatives Fuel Top Line
Helen of Troy is likely to keep gaining from its consistent online sales and digital marketing efforts. Notably, online sales surged 30% year over year and represented nearly 16.2% of Helen of Troy’s top line in the first quarter. This fares much better than its year-ago period contribution of 13.5%. Online sales increased in all three segments, courtesy of impressive digital marketing efforts. In fact, management plans to make further investments in this arena to keep pace with the evolving consumer environment. Incidentally, the company plans to allocate 14-18% of its planned additional brand investments for fiscal 2019 toward digital initiatives on Leadership Brands.
Focus on Leadership Brands
Talking of Leadership Brands, Helen of Troy has been focused on making solid investments in this portfolio of market leading brands. Markedly, Leadership Brands’ sales jumped 14.7% year over year and formed roughly 79% of Helen of Troy’s consolidated sales in the first quarter of fiscal 2019. Notably, management remains on track with investments in product launches, marketing efforts and e-commerce strategies for Leadership Brands. Leadership Brands, which generates the highest margin and the greatest volume, is the most efficient business of the company. In fact, sale of Healthy Directions also forms part of the company’s efforts to shift resources to Leadership Brands, which generates a major chunk of revenues and also delivers high operating profits.
Clearly, Helen of Troy is set to keep its stellar show on, which gets reconfirmed by management’s raised view for fiscal 2019. Adjusted earnings from continuing operations are now projected in the range of $7.45-$7.70 per share, up from the previously guided range of $7.30-$7.55.
Looking for More? Check These Solid Consumer Staples Stocks
Chefs’ Warehouse (CHEF - Free Report) , with long-term earnings per share growth rate of 22%, carries a Zacks Rank #2.
Pinnacle Foods has long-term earnings per share growth rate of 8% and a Zacks Rank #2.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Helen of Troy Up Post Q1: Earnings Beat Not the Sole Factor
Helen of Troy Limited (HELE - Free Report) has seen its shares surge 26.4% in the past six months, against the industry’s drop of 11.4%. Much of this can be attributable to the company’s solid past record that was retained in first-quarter fiscal 2019. Notably, shares of the company have gained 14.2% since the quarterly outcome.
Let’s delve deeper into all the factors that are likely to sustain momentum of this Zacks Rank #2 (Buy) company.
Solid Q1 Results, Transformation Plan on Track
Helen of Troy posted spectacular results for first-quarter fiscal 2019 as both top and bottom lines improved year over year and came ahead of the Zacks Consensus Estimate. While sales marked its second straight beat, earnings kept its positive surprise streak alive for the 12th consecutive quarter. Moreover, management raised its bottom-line view and Project Refuel target. While earnings in the quarter were backed by improved adjusted operating income across all segments, reduced interest costs and lower share count, sales gained from continued strength in Leadership Brands, strong online sales and core business advancement.
Core business was backed by solid international sales, product introductions, rise in domestic brick and mortar sales, and sturdy online sales. Clearly, these upsides reflect management’s focus on its Transformation Plan that was announced in fiscal 2015. The plan mainly concentrates on making investments in core areas, undertaking customer-centric innovations, undertaking prudent mergers and acquisitions, building superior shared services, making upgrades to workforce and systems, and reducing wastage to improve quality and curtail costs. The company expects this plan to help enrich shareholders’ value.
Project Refuel Bodes Well
Helen of Troy introduced Project Refuel in October 2017. This restructuring plan was initiated to improve the performance of the company’s Beauty and Nutritional Supplements units. During the first quarter of fiscal 2019, the company expanded this program to realign and streamline its supply-chain network. Notably, management now expects Project Refuel to lead to annualized profit growth of nearly $8.0-$9.0 million, up from the old guidance of $8.0 million. The company expects to conclude Project Refuel by the first quarter of fiscal 2020.
Robust Digital Initiatives Fuel Top Line
Helen of Troy is likely to keep gaining from its consistent online sales and digital marketing efforts. Notably, online sales surged 30% year over year and represented nearly 16.2% of Helen of Troy’s top line in the first quarter. This fares much better than its year-ago period contribution of 13.5%. Online sales increased in all three segments, courtesy of impressive digital marketing efforts. In fact, management plans to make further investments in this arena to keep pace with the evolving consumer environment. Incidentally, the company plans to allocate 14-18% of its planned additional brand investments for fiscal 2019 toward digital initiatives on Leadership Brands.
Focus on Leadership Brands
Talking of Leadership Brands, Helen of Troy has been focused on making solid investments in this portfolio of market leading brands. Markedly, Leadership Brands’ sales jumped 14.7% year over year and formed roughly 79% of Helen of Troy’s consolidated sales in the first quarter of fiscal 2019. Notably, management remains on track with investments in product launches, marketing efforts and e-commerce strategies for Leadership Brands. Leadership Brands, which generates the highest margin and the greatest volume, is the most efficient business of the company. In fact, sale of Healthy Directions also forms part of the company’s efforts to shift resources to Leadership Brands, which generates a major chunk of revenues and also delivers high operating profits.
Clearly, Helen of Troy is set to keep its stellar show on, which gets reconfirmed by management’s raised view for fiscal 2019. Adjusted earnings from continuing operations are now projected in the range of $7.45-$7.70 per share, up from the previously guided range of $7.30-$7.55.
Looking for More? Check These Solid Consumer Staples Stocks
Medifast (MED - Free Report) , with a Zacks Rank #1 (Strong Buy), delivered positive earnings surprise in the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Chefs’ Warehouse (CHEF - Free Report) , with long-term earnings per share growth rate of 22%, carries a Zacks Rank #2.
Pinnacle Foods has long-term earnings per share growth rate of 8% and a Zacks Rank #2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>