Helen of Troy Limited Earnings: Fifth Straight Quarter of Shrinking Margins, but Profit Rises

Helen of Troy Limited (NASDAQ:HELE) reported higher profit for the fourth quarter as revenue showed growth. Helen of Troy is a global designer, developer, importer, and distributor of a portfolio of brand-name consumer products.

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Helen of Troy Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Helen of Troy Limited rose to $29.3 million (92 cents per share) vs. $24.4 million (77 cents per share) in the same quarter a year earlier. This marks a rise of 20.2% from the year-earlier quarter.

Revenue: Rose 24% to $294 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Helen of Troy Limited beat the mean analyst estimate of 88 cents per share. Analysts were expecting revenue of $289.8 million.

Quoting Management: Gerald J. Rubin, Chairman, Chief Executive Officer and President, commenting on the Company’s results stated, “We are pleased with our record fiscal fourth quarter and record fiscal year results. Fiscal year 2012 results were an important milestone for Helen of Troy, as our annual net sales revenue surpassed $1 billion. We continue to make progress in achieving our long-term, strategic business objectives, despite the numerous challenges of a very difficult retail environment for several of our businesses. On December 30, 2011, we purchased the PUR business from The Procter & Gamble Company for $160,000,000 in cash. The PUR business has been accretive to earnings since the acquisition and we are very excited about the potential for long-term growth for PUR.”

Key Stats:

The company has seen double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 54.7%, with the biggest boost coming in the first quarter when revenue rose 69.5% from the year earlier quarter.

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 1.9 percentage points to 41.9% from the year-earlier quarter. Over that time, margins have contracted on average 3.8 percentage points per quarter on a year-over-year basis.

The company has now seen its net income increase for three consecutive quarters. In the third quarter, net income rose 21.5% and in the second quarter, the figure rose 0.5%.

The company has now beaten estimates the last two quarters. In the third quarter, it topped expectations with net income of $1.04 versus a mean estimate of net income of $1.02 per share.

Looking Forward: Expectations for the first quarter of the next fiscal year have not changed from 88 cents. The average estimate for the fiscal year has remained at $3.45 per share.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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