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Helen of Troy (HELE) Poised on Leadership Brands, Strategies

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Helen of Troy Limited HELE looks well placed, courtesy of strength in its Leadership Brands. The company’s focus on strategic growth efforts is yielding well. Shares of this Zacks Rank #1 (Strong Buy) company have increased 5.7% in the past six months against the industry’s decline of 22.3%.

Let’s take a closer look at the factors yielding results.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Focus on Leadership Brands

Helen of Troy is focused on making solid investments in its Leadership Brands, which is a portfolio of market-leading brands. Brands in this portfolio, including OXO, Hydro Flask, Vicks, Braun, Honeywell, PUR, Hot Tools and Drybar are positioned well to enhance market share. These brands account for a significant chunk of the company's sales, which generate solid margins and volumes. The company's constant investments in these productive brands have been delivering robust results. In December 2021, Helen of Troy concluded the buyout of Osprey Packs, Inc worth $414.7 million. The buyout marks the company’s ninth Leadership Brand and will fuel further growth. On its last reported quarter’s earnings call, management highlighted that it expects Osprey to be already accretive to almost each key consolidated financial metric.

During the third quarter of fiscal 2022, Drybar and Hot Tools product lines performed well. OXO and Hydro Flask witnessed robust organic growth across both domestic and international regions. Solid demand in Drybar and Hot Tools contributed significantly to growth in the Beauty category. As part of its strategy to focus on Leadership Brands, the company divested its mass-market Personal Care business (excluding the Latin America and Caribbean regions) to HRB Brands LLC on Jun 8, 2021.

Strategic Initiatives

Helen of Troy is making major investments in key areas to continue driving growth. To this end, the company is focused on investing in consumer-centric innovation, digital marketing and media, new packaging, enhanced production and distribution capacity as well as direct-to-consumer channels among others. Management is on track to continue to invest in key growth areas as part of its Phase II Transformation efforts. In an attempt to stay focused on the plan, Helen of Troy finalized a land purchase in Gallaway, TN, to construct a state-of-the-art distribution center. The highly-automated under construction 2-million square foot facility will enhance the company's Housewares portfolio. Growing the company's international business is also an integral part of its Phase II transformation plan.

The company expects to create further value through strategic acquisitions in the future. In December 2020, Helen of Troy, via its subsidiaries, entered into a 100-year exclusive Trademark License Agreement with Revlon to license the trademark for hair care appliances and tools of the latter. This marks another step for Helen of Troy to bolster its Beauty business and strengthen its brand portfolio.

All said, we believe that focus toward such growth endeavors is likely to help Helen of Troy keep its growth story going.

More Consumer Staple Bets

Some other top-ranked companies are The Estee Lauder Companies EL, Nu Skin Enterprises, Inc. NUS and United Natural Foods UNFI.

United Natural Foods, the leading distributor of natural, organic and specialty food and non-food products in the United States and Canada, sports a Zacks Rank #1 at present. Shares of UNFI have surged 44.7% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for United Natural Foods’ current financial year’s sales suggests growth of 4.8% from the year-ago reported number. UNFI has a trailing four-quarter earnings surprise of 35.4%, on average.

Nu Skin, which develops and distributes personal care and wellness products worldwide, currently carries a Zacks Rank #2 (Buy). Shares of NUS have gained 3.5% in the past six months.

The Zacks Consensus Estimate for Nu Skin’s current financial year’s sales suggests growth of 3.7% from the year-ago reported figure. NUS has a trailing four-quarter earnings surprise of 16.6%, on average.

The Estee Lauder Companies manufactures and sells skincare, makeup, fragrance and hair care products worldwide, currently carries a Zacks Rank #2. Shares of EL have gained 1.9% in the past six months.

The Zacks Consensus Estimate for The Estee Lauder Companies’ current financial year’s sales suggests growth of 15.4% from the year-ago reported figure. EL has a trailing four-quarter earnings surprise of 37%, on average.


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United Natural Foods, Inc. (UNFI) : Free Stock Analysis Report

Helen of Troy Limited (HELE) : Free Stock Analysis Report

Nu Skin Enterprises, Inc. (NUS) : Free Stock Analysis Report

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