Helen of Troy (HELE) on Strong Leadership Brands and Online Sales
Helen of Troy Limited HELE benefits from its leadership marks and strength in e-commerce. The company continues to focus on its strategic growth efforts. These were reflected in its results for the first quarter of fiscal 2022, with both upper and lower results exceeding Zacks’ consensus estimate and increasing year over year.
Currently Zacks Rank # 2 (Buy) stock has risen 7.4% in the past three months compared to the industry’s 1.8% growth.
Let’s discuss further.
Focus on leading brands
Helen of Troy has focused on making strong investments in its leadership brands, which constitute a portfolio of market-leading brands. The brands in this portfolio are well positioned to increase their market share. Leadership Brands’ net sales increased 22.9% in the first quarter of fiscal 2022. The company’s continued investment in these brands, considered the most productive, produced strong results. The company took another step in this direction by acquiring Drybar Products in January 2020. As part of its strategy to focus on leading brands, Helen of Troy divested its consumer personal care business (excluding Latin America and Caribbean) at HRB. Brands LLC on June 8.
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Strong digital efforts
The company has benefited from constant efforts in online sales and digital marketing. Although online sales growth moderated in the first quarter of fiscal 2022, it increased nearly 4% year-over-year and contributed nearly 22% to sales of the company. Management is on track to continue investing in this area to keep pace with the changing consumer environment. The company has consistently increased its digital presence through sophisticated marketing plans and enhanced content.
What stimulates growth?
Helen of Troy is making major investments in key areas to continue driving growth. To this end, it focuses on investing in consumer-centric innovations, marketing and digital media, new packaging, improved production and distribution capacity as well as direct-to-consumer channels, among others. Management continues to invest in key growth areas as part of the Phase II transformation efforts. In tune with the same, Helen of Troy recently finalized a purchase of land in Gallaway, TN to build a state-of-the-art distribution center.
The growth of international activity is also an integral part of the company’s Phase II transformation plan. Management made several investments during the second half of fiscal 2021 to support its distribution in Continental Europe and the UK, among others, to drive growth in international markets. In addition, the company plans to create more value through strategic acquisitions in the future.
We believe that these well-documented growth efforts and the aforementioned benefits are likely to keep Helen of Troy in good stead.
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