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Helen Of Troy (HELE) Risk Analysis
Risk Overview Q3, 2026
Source: the company's latest filing for the period ended Aug 31, 2026, filed Oct 08, 2026
Risk Change Over Time
- Accounting & Financial Operations - Risk 1Our projections of product demand, sales and net income are highly subjective in nature and our future sales and net income could vary in by a material amount from our projections.
From time to time, we may provide financial projections to our shareholders, lenders, investment community, and other stakeholders of our future sales and net income. Since we do not require long-term purchase commitments from our major customers and the customer order and ship process is very short, it is difficult for us to accurately predict the demand for many of our products, or the amount and timing of our future sales, related net income and cash flows. Our projections are based on management's best estimate of sales using historical sales data and other relevant information available at the time. These projections are highly subjective since sales to our customers can fluctuate substantially based on the demand of their retail consumers and related ordering patterns, as well as other risks described in this Annual Report. Additionally, changes in consumer demand, retailer inventory management strategies, transportation lead times, supplier capacity, and raw material availability could make our inventory management and sales forecasting more difficult. Due to these factors, our future sales and net income could vary materially from our projections. We are dependent on discretionary spending, which is affected by, among other things, economic and political conditions, consumer confidence, interest, inflation and tax rates, a public health crisis (such as pandemics and epidemics), and financial and housing markets, which are all outside of our control. Consequently, these and other potential impacts we are not currently aware of could also cause future sales and net income to vary materially from our projections.
- Corporate Activity and Growth - Risk 2Expectations regarding recent or future We may be unsuccessful in executing and realizing expected synergies from strategic business initiatives such as acquisitions, divestitures, or and global restructuring plans (such as (including Project Pegasus), including our ability to realize related synergies, along with our ability to successfully execute these strategic business initiatives, which may adversely affect the price of our common stock.
We continue to look for strategic business opportunities to drive long-term growth and operating efficiencies, which may include acquisitions, divestitures and/or global restructuring plans. We frequently evaluate our brand portfolio and product portfolio and may consider acquisitions that complement our business or divestitures, or exits of businesses, that we no longer believe to be an appropriate strategic fit. We have initiated, and may initiate in the future, global restructuring plans, such as Project Pegasus, to achieve strategic objectives and improve financial results. Any acquisition, divestiture or global restructuring plan, if not favorably received by consumers, shareholders, analysts, and others in the investment community, could have a material adverse effect on the price of our common stock. In addition, any acquisition, divestiture or global restructuring plan, including Project Pegasus, involves numerous risks, including: - our ability to successfully complete the initiative in a timely manner, or at all;- the initiative may not advance our business strategy as expected;- challenges realizing anticipated cost savings, efficiencies, synergies, financial targets and other benefits;- difficulties in accurately predicting costs and future savings;- costs incurred in completing the initiative may be greater than anticipated;- the initiative may lead to increases in costs in other aspects of our business such as increased conversion, outsourcing or distribution costs;- diversion of management's attention from other business concerns;- challenges in integrating or separating personnel and financial or other systems;- potential loss of key employees and/or reduced employee morale and productivity; and - difficulties in transitioning and preserving customer, contractor, supplier, and other important third-party relationships. Acquisitions pose additional risks, including: - difficulties in the assimilation of the operations, technologies, and products;- challenges in integrating distribution channels;- changes in cash flows or other market-based assumptions or conditions that cause the value of acquired assets to fall below book value;- risks associated with subsequent losses or operating asset write-offs, contingent liabilities and impairment of related acquired intangible assets including goodwill; and - risks of entering markets in which we have no or limited experience. Divestitures pose additional risks, including: - our ability to find appropriate buyers;- difficulties executing transactions on favorable terms;- separating divested business operations with minimal impact to our remaining operations;- risks associated with operating asset write-offs and impairment charges; and - challenges effectively managing any transition service arrangements.
Risk Highlights Q3, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 28
- Regulation - Risk 1Significant changes in or our compliance with regulations, interpretations or product certification requirements could adversely impact our operations.
As a global company, we are subject to U.S. and foreign regulations, including environmental, health and safety laws, and industry-specific product certifications. Many of the products we sell are subject to product safety laws and regulations in various jurisdictions. These laws and regulations specify the maximum allowable levels of certain materials that may be contained in our products, provide statutory prohibitions against misbranded and adulterated products, establish ingredients and manufacturing procedures for certain products, specify product safety testing requirements, and set product identification, labeling and claim requirements. For example, thermometers distributed by our Beauty & Wellness segment must comply with various regulations governing the production and distribution of medical devices. We are encountering increasingly burdensome and costly requirements relating to the regulation of our company and our products. Significant new regulations, material changes to existing regulations, or greater oversight, enforcement or changes in interpretation of existing regulations, could further delay or interrupt distribution of our products in the U.S. and other countries, result in fines or penalties or cause our costs of compliance to increase. We cannot guarantee that our products will receive regulatory approval in all countries. Some of our Beauty & Wellness segment's customers require that our hair appliances comply with various safety certifications, including UL certifications. Significant new certification requirements or changes to existing certification requirements could further delay or interrupt distribution of our products or make them more costly to produce. We are not able to predict the nature of potential changes to, or enforcement of, laws, regulations, product certification requirements, repeals or interpretations. Nor are we able to predict the impact that any of these changes would have on our business in the future. Further, if we were found to be noncompliant with applicable laws and regulations in these or other areas, we could be subject to private rights of action and similar proceedings seeking to enforce regulatory requirements and governmental or regulatory actions, including fines, import detentions, injunctions, product withdrawals or recalls or asset seizures, any of which could have a material adverse effect on our business, results of operations and financial condition. Additionally, some of our product lines are subject to product identification, labeling and claim requirements, which are monitored and enforced by regulatory agencies, such as the EPA, U.S. Customs and Border Protection, the U.S. Food and Drug Administration, the U.S. Consumer Product Safety Commission and the EU. As discussed elsewhere in this Annual Report, during fiscal 2022 and 2023, we were in discussions with the EPA regarding the compliance of packaging and labeling claims on certain of our products in the air and water filtration and humidification categories within the Beauty & Wellness segment that are sold in the U.S. As a result of these packaging and labeling compliance discussions, we completed the repackaging and relabeling of impacted products during fiscal 2023. We continue to have ongoing settlement discussions with the EPA related to this matter. As of February 28, 2026, we accrued an estimated liability of $4.4 million, which represents our best estimate of probable settlement costs related to this matter. As a result, our business, results of operations and financial condition could be adversely and materially impacted in ways that we are not able to predict today. For additional information refer to Item 7., "Management's Discussion and Analysis of Financial Condition and Results of Operations," including "EPA Compliance Costs" in this Annual Report.
- Regulation - Risk 2Changes in laws and regulations, including environmental, employment and health and safety and tax laws, and the costs and complexities of compliance with such laws could have a material adverse impact on our business.
The impact of future legislation in the U.S. or abroad, including such things as employment and health insurance laws, environmental and climate change related legislation, tax legislation, regulations or treaties is always uncertain. Global, federal and local legislative agendas from time to time contain numerous proposals dealing with environmental policy, energy policy, taxes, financial regulation, transportation policy and infrastructure policy, among others that, if enacted into law, could increase our costs of doing business. Changes in government administrations in the U.S. or abroad increase the uncertainty of future changes in legislation, enhanced regulations, and greater oversight, or more stringent interpretations, of existing policies by regulatory agencies. Changes in such laws, regulations or oversight could cause us to incur material capital or operating expenditures in the future to comply with applicable laws and regulations, increase our effective income tax rate, delay or interrupt distribution of our products, or make them more costly to produce, all of which could have a material adverse impact on our business. For example, the Organisation for Economic Co-operation and Development ("OECD") has introduced a framework to implement a global minimum corporate income tax of 15%, referred to as "Pillar Two." Certain countries in which we operate have enacted, or are in the process of enacting, domestic legislation aligned with OECD's Pillar Two "Model Rules." Pillar Two legislation in effect for our fiscal 2025 and 2026 has been incorporated into our consolidated financial statements. However, Pillar Two remains an evolving regime, and as additional jurisdictions adopt these rules, existing rules are revised, or administrative guidance and enforcement practices develop, we could experience adverse impacts on our global effective tax rate and an increase in the cost and complexity of compliance. As additional tax or financial regulatory guidance is issued by the applicable authorities and accounting treatment is clarified, we perform additional analysis on the application of the law and we refine our estimates. Our final analysis may be different from provisional amounts, which could materially affect our tax obligations, effective tax rate and operating results in the period completed.
- Regulation - Risk 3If significant tariffs or other restrictions continue to be placed on imports from China, Vietnam or Mexico, or any retaliatory trade measures are taken by China, Vietnam or Mexico, our business and results of operations could be materially and adversely affected.
All of our products are manufactured by unaffiliated manufacturers, most of which are located in China, Vietnam, Mexico and the U.S. This concentration exposes us to risks associated with doing business globally, including changes in tariffs. The U.S. government has implemented trade policies intended to restrict imports, including raising tariffs on certain goods. During calendar year 2025, the U.S. government announced and implemented a series of new and revised tariffs on imports from multiple countries, including China, Vietnam and Mexico, and has indicated the potential for additional changes to existing trade agreements. Some tariffs have been temporarily paused or adjusted, but the scope, magnitude and timing of future policies remain uncertain. In response to U.S. actions, other countries have imposed retaliatory tariffs on a broad range of goods, and further tariffs could be enacted by the U.S. or in response to international trade measures. During fiscal 2026, the impact of the tariffs adversely impacted our cost of goods sold and had cascading adverse impacts on our net sales revenue, interest expense, business, results of operations and cash flows. Our cost of goods sold during fiscal 2026 included $50.7 million of additional pre-tax costs related to the changes in tariffs enacted. Our net sales revenue during fiscal 2026 was also negatively impacted by a combination of factors including the pause or cancellation of direct import orders from China by key retailers in response to increased tariff rates, a slowdown in retailer orders following pull forward activity in the fourth quarter of fiscal 2025 due to tariff uncertainty, and lower consumer confidence and demand. Sales were also negatively impacted by evolving dynamics in the China market, including a shift toward localized fulfillment models and heightened competition from domestic sellers benefiting from government subsidies. Net sales revenue during the second half of fiscal 2026 was unfavorably impacted by stop shipment actions in support of consistent adoption of tariff related price increases by our retail partners, which primarily impacted our Beauty & Wellness segment. We also incurred higher interest expense during fiscal 2026 due to the impact of tariffs resulting in higher inventory carrying costs and higher capital expenditures to diversify our production outside of China. In addition to the uncertainty from evolving global tariff policies, we experienced and expect continued unfavorable cascading impacts on inflation, consumer confidence, employment and overall macroeconomic conditions, all of which may continue to adversely impact our sales, results of operations and cash flows. For additional information regarding tariffs, refer to "Significant Trends Impacting the Business" in Item 7., "Management's Discussion and Analysis of Financial Condition and Results of Operations". Any further alteration of trade agreements and terms between China, Vietnam, Mexico and the U.S., including limiting trade with China, Vietnam and Mexico, imposing additional tariffs on imports from China, Vietnam or Mexico and potentially imposing other restrictions on imports from China, Vietnam or Mexico to the U.S. may result in further or higher tariffs, or further retaliatory trade measures by China, Vietnam or Mexico, all of which could have a material adverse effect on our business and operating results.
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
