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4 Factors That Make Helen of Troy (HELE) an Attractive Stock
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Helen of Troy Limited (HELE - Free Report) is undoubtedly worth giving a shot, courtesy of its splendid past record that was retained in the recently reported fourth-quarter fiscal 2019 results. The company continued to benefit from its strategic growth initiatives, which have helped its shares gain 19.1% in the past three months, outpacing the industry’s growth of 5.1%. In fact, this cosmetics company has rallied about 19%, since its fourth-quarter earnings release on Apr 26.
Helen of Troy has been focused on making solid investments in its Leadership Brands, which includes market leading brands like OXO, Honeywell, Braun, PUR, Hydro Flask, Vicks and Hot Tools. These brands account for a significant chunk of the company’s sales, which generate solid margins and volumes. The company’s constant investments in these brands that are considered most productive and have been delivering robust results. Markedly, Leadership Brands’ sales improved nearly 8.9% year over year in fiscal 2019. Notably, management is on track with product launches, marketing efforts and e-commerce strategies for Leadership Brands.
Transformation Plan on Track
Helen of Troy concluded Phase I of its multi-year transformation plan and is focused on Phase II, which is expected to drive growth for the next five years. Phase II of the plan includes continued investments in Leadership Brands, with plans to grow the same through customer-friendly innovations, international expansion and acquisitions. Also, the company aims to enhance its operating efficiency and shared service facility. Long-term goals of Helen of Troy’s transformation plan include better organic sales growth, continued margin expansion and efficient capital allocation.
Digital Endeavors a Major Driver
Helen of Troy’s online sales advanced 36% year over year in the fourth quarter of fiscal 2019 and comprised nearly 20% of the top line. Management plans to make further investments in this arena to keep pace with the evolving consumer environment. In fact, the company is persistently augmenting its digital presence through sophisticated marketing plans and improved content.
Restructuring Plan Bodes Well
Helen of Troy is progressing well with its Project Refuel restructuring plan, which was initiated to improve performance of the 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. Management earlier projected Project Refuel to lead to annualized savings of nearly $8.0-$10.0 million throughout the course of the plan. Savings from this initiative are being invested in areas such as new product development, attracting new talent and strengthening marketing strategies.
Check These Radiant Cosmetic Stocks
Avon Products , with a Zacks Rank #1, has long-term earnings per share growth rate of 7.5%.
Estee Lauder (EL - Free Report) , with long-term EPS growth rate of 13%, sports a Zacks Rank #2.
Revlon , with long-term earnings per share growth rate of 6%, carries a Zacks Rank #2 as well.
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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4 Factors That Make Helen of Troy (HELE) an Attractive Stock
Helen of Troy Limited (HELE - Free Report) is undoubtedly worth giving a shot, courtesy of its splendid past record that was retained in the recently reported fourth-quarter fiscal 2019 results. The company continued to benefit from its strategic growth initiatives, which have helped its shares gain 19.1% in the past three months, outpacing the industry’s growth of 5.1%. In fact, this cosmetics company has rallied about 19%, since its fourth-quarter earnings release on Apr 26.
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Let’s take a look at the factors likely to keep driving this Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Strength in Leadership Brands
Helen of Troy has been focused on making solid investments in its Leadership Brands, which includes market leading brands like OXO, Honeywell, Braun, PUR, Hydro Flask, Vicks and Hot Tools. These brands account for a significant chunk of the company’s sales, which generate solid margins and volumes. The company’s constant investments in these brands that are considered most productive and have been delivering robust results. Markedly, Leadership Brands’ sales improved nearly 8.9% year over year in fiscal 2019. Notably, management is on track with product launches, marketing efforts and e-commerce strategies for Leadership Brands.
Transformation Plan on Track
Helen of Troy concluded Phase I of its multi-year transformation plan and is focused on Phase II, which is expected to drive growth for the next five years. Phase II of the plan includes continued investments in Leadership Brands, with plans to grow the same through customer-friendly innovations, international expansion and acquisitions. Also, the company aims to enhance its operating efficiency and shared service facility. Long-term goals of Helen of Troy’s transformation plan include better organic sales growth, continued margin expansion and efficient capital allocation.
Digital Endeavors a Major Driver
Helen of Troy’s online sales advanced 36% year over year in the fourth quarter of fiscal 2019 and comprised nearly 20% of the top line. Management plans to make further investments in this arena to keep pace with the evolving consumer environment. In fact, the company is persistently augmenting its digital presence through sophisticated marketing plans and improved content.
Restructuring Plan Bodes Well
Helen of Troy is progressing well with its Project Refuel restructuring plan, which was initiated to improve performance of the 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. Management earlier projected Project Refuel to lead to annualized savings of nearly $8.0-$10.0 million throughout the course of the plan. Savings from this initiative are being invested in areas such as new product development, attracting new talent and strengthening marketing strategies.
Check These Radiant Cosmetic Stocks
Avon Products , with a Zacks Rank #1, has long-term earnings per share growth rate of 7.5%.
Estee Lauder (EL - Free Report) , with long-term EPS growth rate of 13%, sports a Zacks Rank #2.
Revlon , with long-term earnings per share growth rate of 6%, carries a Zacks Rank #2 as well.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>