Helen of Troy Net Slips 2.6 Percent in Second Quarter
EL PASO, Texas-Rising expenses sliced into Helen of Troy's bottom line in its fiscal second quarter, resulting in a 2.6 percent downturn in net income to $23 million.
Selling, general and administrative expenses rose in both dollar terms and as a percentage of sales. In dollars, SG&A increased 5.2 percent and as a percentage of sales, they gained 50 basis points to 30 percent. A Helen of Troy statement attributed the increased costs to additional advertising spending, transition service fees and amortization connected to its acquisition of the PUR water filtration business, raised depreciation expense and higher incentive compensation expenses under the company's new performance compensation arrangement.
The expense gain offset a sales increase of 3.6 percent to $287.4 million, a new record for the company. Much of this pickup occurred in Helen of Troy's healthcare/home environment segment, whose sales rose 12.4 percent. Sales in housewares segment were up 1.1 percent, while sales in the personal-care segment fell 2.5 percent.
Noting that Helen of Troy's second-quarter sales and operating income set records, Gerald Rubin, chairman, president and CEO, added that the company faced many of the challenges besetting other consumer-products companies in light of consumer uncertainty and global economic problems. "As a company, we continue to have a very strong balance sheet and generate as significant amount of cash, which can be used to further innovate our businesses and make future acquisitions," Rubin said.