Global consumer products provider Helen of Troy Ltd. (HELE) recently posted a better-than-estimated third-quarter performance on both its top-line and bottom-line fronts. HELE provides housewares, health, and home and beauty products.
Revenue declined 2% year-over-year to $624.9 million, but exceeded analysts’ estimates by $70.6 million. During this period, an uptick in brick and mortar, as well as online sales, helped the company’s Housewares net sales increase by 10.7%.
Increased appliance sales saw HELE’s beauty core business net sales grow 15.3% over the prior year. Meanwhile, net sales from Health & Home dropped 18.5% due to lower sales amid the COVID-19 pandemic. However, earnings of $3.72 per share beat analysts’ expectations by $0.54.
With these developments in mind, let us take a look at the changes in HELE’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Helen of Troy’s top two risk categories are Legal & Regulatory and Macro & Political, contributing 21% each to the total 28 risks identified. Compared to a sector average of 11%, HELE’s Macro & Political risk factor is at 21%.
In its recent report, the company has changed one key risk factor under the Legal & Regulatory risk category.
HELE highlighted that it is subject to different U.S. and foreign regulations. Its operations could see a negative impact due to changes in the company’s compliance with regulations, interpretations, or product certification requirements.
If the company is found to be non compliant with any laws and regulations, then it could be subject to fines, import detentions, injunctions, asset seizures, and product recalls. Such an event could have an adverse impact on HELE.
Wall Street’s Take
On January 6, D.A. Davidson analyst Linda Bolton Weiser reiterated a Hold rating on the stock alongside a price target of $255. Wall Street’s top analysts have a Hold Consensus rating on the stock, and the average Helen of Troy price target of $255 implies (9.9% potential upside). Shares are up 9% over the past six months.
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