Personal care products maker Helen Of Troy Limited (HELE), Monday, reported a sharp rise in third quarter net profit that also came above analysts' estimates, reflecting higher net sales from housewares segment and lower interest expenses. However, the news failed to cheer the market, as the company's shares fell more than 8% in morning trade on the Nasdaq.
For the third quarter of 2010, the El Paso, Texas-based company's net earnings were $24.73 million as compared with $15.09 million in the prior-year period.
On a per share basis, earnings surged 66.7% to $0.80 from $0.48 in the year-ago quarter. On average, four analysts polled by Thomson Reuters expected Helen Of Troy to earn $0.73 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the period was $189.40 million as compared with $185.62 million in the third quarter of fiscal 2009. Analysts expected the company to generate revenues of $197.99 million for the quarter.
On a segmental basis, net sales from housewares segment, or OXO, was $55.19 million versus $45.30 million last year, while net sales from personal care division fell 4.4% to $134.21 million from $140.32 million in the comparable period prior year.
Helen Of Troy stated that recent OXO product introductions, especially in dry and wet food storage categories has helped to drive net sales growth in the quarter. The company noted that during the quarter, grooming, skin care and hair care solutions category achieved net sales growth, while net sales from hair care appliances and accessories decreased during the period.
Commenting on the results, chairman, chief executive officer and president Gerald Rubin said, "Our Housewares segment continues its unbroken record of sustained growth. Our Personal Care segment has been affected by the poor retail economy during 2009."
During the three-month period, selling, general and administrative expenses rose slightly to $53.66 million from $53.54 million in the corresponding period prior year.
For the third quarter, consolidated gross profit margin as a percentage of net sales increased 4.5 percentage points to 44.1% from 39.6% in the prior year.
For the nine-month period, Helen Of Troy's net earnings were $55.15 million compared to $31.25 million in the same period last year. Earnings per share surged 79% to $1.79 from $1.00 in the last-year period. Year-to-date net sales was $495.47 million, up 2.3% from $484.17 million a year earlier.
HELE is currently trading on the Nasdaq at $22.73 per share down $1.98 or 8.01% on a volume of 232,484 shares. In the past 52-week period, the shares have been trading in a range of $8.55 to $25.01.
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