EL PASO, Texas (BRAIN) — Osprey and Hydro Flask parent Helen of Troy will freeze inventory purchases from China during what it called "volatile times" because of tariff increases while reporting fourth-quarter and yearly net sales declines.
The exceptions to the China pause are purchases supporting key launches already underway and an overall reduction in inventory purchases in expectation of softer consumer demand in the short to intermediate term, according to the Helen of Troy earnings report.
For the fourth quarter ending Feb. 28, net sales were down 0.7% ($485.9 million compared to $489.2 million), while 2025 yearly net sales decreased 4.9%, from $2.01 billion to $1.91 billion.
"The rapidly changing global tariff actions are creating significant uncertainty in the marketplace, which we believe will have a profound impact on the economy broadly, and consumer sentiment specifically, making business planning a challenge," said CEO Noel M. Geoffroy.
Because of the uncertain effects of the increased tariffs, Helen of Troy is not providing a fiscal 2026 outlook. Also, it is exploring ways to diversify production outside of China and expects to reduce its cost of goods sold exposed to China tariffs to fewer than 20% by the end of fiscal 2026. Price increases are being considered, according to the company.
In addition to the China inventory pause, other measures being implemented to preserve cash flow and reduce costs include:
- Suspending projects and capital expenditures not critical or in support of supplier diversification or dual-sourcing initiatives.
- Reducing and deferring marketing, promotional, and new product development expenses.
- Reducing overall personnel costs and pausing most project and travel expenses.
- Taking actions to optimize accounts receivable and payable days outstanding.
"Through the combination of tariff mitigation actions and these additional cost reduction measures, the company believes it can offset 70% to 80% of the tariff impact in fiscal 2026, based on tariffs currently in place," according to Helen of Troy.
For the fourth quarter, net income was $50.9 million, increasing 19.2% from the $42.7 million reported at the same time last year. Earnings per share was $2.22, compared with $1.79 at the same time last year, increasing 24%.
For 2025, net income was $123.7 million decreasing 26.5% from $168.5 million in 2024. Earnings per share was $5.37, decreasing 23.6% from $7.03.
Helen of Troy's corporate headquarters is in El Paso, Texas, and its stock is traded on the NASDAQ under the HELE symbol. Stock quote at Marketwatch.com.
