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Here's Why Helen of Troy is Set to Sustain Its Solid Show

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Helen of Troy Limited (HELE - Free Report) has been benefitting from its focus on Leadership Brands, robust digital efforts and Project Refuel program. These factors, which fueled the company in the second quarter of fiscal 2019, are likely to continue driving its performance in the forthcoming periods. This is also evident from management’s raised outlook.

Helen of Troy Growth on Track

Helen of Troy has been focused on making solid investments in its “Leadership Brands,” which is a portfolio of market leading brands like OXO, Honeywell, Vicks and Hot Tools, among other. The company’s constant investments in these brands that are considered most productive have been delivering robust results. Markedly, Leadership Brands’ sales rallied 20.5% year over year in the second quarter. Management is on track with investments in product launches, marketing efforts and e-commerce strategies for Leadership Brands. Notably, this category is among the company’s highest margin providing, volume generating and efficient businesses.

Further, the company is likely to keep gaining from its consistent online sales and digital marketing efforts. Markedly, online sales increased 16.1% year over year in the second quarter. Online sales increased in all three segments, courtesy of impressive digital marketing efforts. In fact, management plans to make further investments in this arena, in an attempt to keep pace with the evolving consumer environment. Well, digital sales have been a growth driver for many other companies like Estee Lauder (EL - Free Report) , Coty (COTY - Free Report) and Ulta Beauty (ULTA - Free Report) .

Buoyed by such upsides, Helen of Troy posted spectacular results for second-quarter fiscal 2019, as both top and bottom lines improved year over year and came ahead of the Zacks Consensus Estimate. Consistent strength in Leadership Brands, strong online sales and core business advancements boosted the top line. Notably, higher brick-and-mortar sales in the Housewares and Health & Home segments along with solid international sales drove results in the reported quarter. Further, these upsides reflect management’s solid focus on its Transformation Plan that was announced in fiscal 2015. Based on a strong first-half performance and well-chalked growth initiatives, management raised outlook for fiscal 2019.

Talking of growth initiatives, the company is on track with Project Refuel that was announced in October 2017 to improve the performance of the company’s Beauty and Nutritional Supplements units. The company recently expanded this program to realign and streamline its supply-chain network. Further, management expects Project Refuel to lead to annualized profit growth of nearly $8.0-$10.0 million, up from the previous guidance of $8.0-$9.0 million throughout the course of the plan. The company expects to conclude Project Refuel by the first quarter of fiscal 2020.

Coming back to management’s raised guidance for fiscal 2019, consolidated net sales are expected to increase 3.8-5.5% to $1.535-$1.560 billion. Earlier, the company projected net sales to increase 0.4-2.1%. Further, adjusted earnings from continuing operations are projected to be $7.65-$7.90 per share, up from the previous guidance of $7.45-$7.70.

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