Consumer products company Helen of Troy Limited (HELE) on Thursday reported a 34% fall in profit for the third quarter, hurt by foreign exchange losses and an almost 12% decline in sales. The company also noted that the liquidation of one of its customers, home-goods retailer Linens' n Things, negatively impacted its business. The company's stock is down more than 14% in the regular trading session.
Third-Quarter Results
For the third quarter, the El Paso, Texas-based company's net income declined to $15.09 million, or $0.48 per share, from $22.84 million, or $0.73 per share, in the same period last year.
On average, three analysts polled by First Call/Thomson Financial expected the company to report earnings for the quarter of $0.70 per share. Analysts' estimates typically exclude special items.
The results for the latest quarter were negatively impacted by foreign exchange losses that reduced year-over-year quarterly earnings by $5.0 million.
Net sales for the quarter declined 11.8% to $185.62 million from $210.35 million a year ago. Wall Street analysts had a consensus revenue estimate for the quarter of $204.21 million.
The company cited the impact of the deteriorating global economic conditions on the retail consumer, a compressed and highly promotional holiday shopping season in the United States, and the strengthening of the U.S. dollar against other currencies as contributors to the decline in sales.
The home-products sector has been hit badly as consumers reign in their spending on discretionary items amid the economic slowdown. Rising food costs and unemployment in addition to diminishing credit has dented consumer confidence. Helen of Troy gets more than half of its sales from discretionary personal appliances.
Analyst Douglas Lane of Jefferies & Co. lowered his rating for Helen of Troy on Wednesday to "Underperform" from "Hold", saying that the company is likely to be pressured as income continue to drop, and shoppers reduce spending and look for additional savings.
Helen of Troy's operating income for the quarter declined to $20.00 million from $29.31 million a year ago.
Net sales for the company's Housewares segment decreased 4.3% to $45.30 million from the previous-year quarter. The company noted that liquidation of home-goods retailer Linens n' Things during the quarter resulted in a loss of sales to that customer. The company also said that its other customers diverted purchases to Linen n' Things deeply discounted merchandise.
Net sales for the Personal Care segment declined 13.9% from the same period last year to $140.32 million.
The company said that it amended its $50 million revolving credit agreement in December 2008, which extended the maturity date from June 1, 2009 to December 15, 2013 and adjusted certain other terms.
Year-To-Date Results
For the nine months, Helen of Troy's net income declined to $31.25 million, or $1.00 per share, from $51.21 million, or $1.60 per share, in the same period last year.
Net sales for the nine-month period declined 4.8% to $484.17 million from $508.44 million in the year-ago period.
Peer Performance
Among the company's peers, Lifetime Brands, Inc. (LCUT) is yet to report its financial results for the fourth quarter. Analysts expect the company to report earnings of $0.24 per share on revenues of $146.37 million.
In November, the company reported a net loss for the third quarter of $0.7 million, or $0.06 per share, compared to a net profit of $6.8 million, or $0.47 per share, for the third quarter of 2007.
Share Movement
In Thursday's regular trading session, HELE is trading at $12.57, down $2.16 or 14.66% on a volume of 0.22 million shares. In the 52-week period, the stock has been trading in a range of $13.31-$24.70.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.