Helen of Troy Net Edges Up 1.5 Percent in Q2
EL PASO, Texas-In spite of a double-digit sales gain, Helen of Troy posted a small 1.5 percent increase in second-quarter net income, which totaled $23.3 million.
Net sales in the quarter, which ended on Aug. 31, rose 11.1 percent to $319.4 million. The top-line leader was the health-care/home environment segment, whose sales jumped 20.4 percent thanks to sharp increases in sales of fans, humidifiers, thermometers and hot-cold therapy products. The housewares segment posted an 8.7 percent sales gain, while the personal-care segment's sales rose 3.4 percent.
However, gross margin dropped 210 basis points to 38.6 percent. In a conference call discussing the second-quarter results with financial analysts yesterday, Thomas Benson, Helen of Troy's senior vice president and chief financial officer, said gross margin was pressured by product cost increases in all segments, foreign currency exchange rates and product mix. Selling, general and administrative expenses rose 7.8 percent in dollars but fell 90 basis points as a percentage of sales, to 29.1 percent.
In yesterday's conference call, Gerald Rubin, chairman, president and CEO, said the second half of Helen of Troy's fiscal year will bring new product launches in a number of categories. In the health-care/home environment segment, the product debuts will include three in the PUR brand: an 11-cup water filter, a faucet-mount water filter and a baby product.
The housewares segment will focus on the expansion of all categories under the OXO brand. The personal-care segment will unveil a lie of appliances featuring infrared technology.
"We remain focused on controlling our costs and executing our growth objectives to sustain our growth and profitability," Rubin told the analysts.