Markets are rarely kind to legacy brands trying to find their footing in a messy economy. Helen of Troy (HELE)—the powerhouse behind names like OXO, Hydro Flask, and Osprey—is currently feeling that cold shoulder. It’s been a brutal stretch. If you look at the charts, the stock has been hovering near its 52-week lows, recently dipping around the $19 mark after its latest earnings reveal on January 8, 2026.
Investors are nervous. You can see it in the sell-offs. Even when the company beats the street's expectations on the top and bottom lines, the stock price still manages to catch a falling knife. Why? Because the "beat" was overshadowed by some pretty heavy luggage: tariffs, a shaky consumer, and massive non-cash impairment charges that made the GAAP numbers look like a crime scene.
What Really Happened With Helen of Troy Stock in Q3
Let’s be honest: the headline numbers for the third quarter of fiscal 2026 were a total mixed bag. Helen of Troy actually reported an adjusted diluted EPS of $1.71. That’s better than the $1.69 analysts were looking for. Revenue also came in at $512.8 million, which was about $10 million more than the consensus estimate.
In a normal world, that’s a win. But we aren't in a normal world.
The stock took a 6% pre-market hit the day of the release. The "scary" part wasn't the adjusted profit; it was the $65.9 million non-cash asset impairment charge. When a company writes down its assets like that, it's basically admitting that the future value of its brands—specifically in the Beauty & Wellness and Home & Outdoor segments—isn't what it used to be. The GAAP loss per share ended up at a staggering $3.65.
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The Elephant in the Room: Tariffs and China
If you’re wondering why management sounds so stressed lately, look no further than the supply chain. Helen of Troy has historically been very dependent on Chinese manufacturing. That’s a massive liability in 2026.
The company is currently projecting an "unmitigated tariff impact" of less than $30 million for this fiscal year. That sounds manageable until you realize they originally thought it would be $20 million. It’s moving in the wrong direction. CEO Noel Geoffroy is pushing a "dual-sourcing" strategy to fix this. They want to get China exposure down to 25-30% of their cost of goods sold by the end of this year. It’s a race against time, honestly.
Moving production isn't like flipping a light switch. It's expensive. It’s slow. And in the meantime, those costs are eating the gross margin, which fell to 46.9% this quarter from nearly 49% a year ago.
The Two Faces of the Portfolio
It’s helpful to think of Helen of Troy as two different businesses right now. You’ve got the stuff that’s working and the stuff that’s... well, not.
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The Bright Spots
- Osprey and Olive & June: These are the current darlings. The acquisition of Olive & June added over $37 million in sales this quarter alone. Without that, the Beauty & Wellness segment would have looked a lot worse.
- International Growth: While domestic sales are sluggish, the company is seeing some life in overseas markets.
The Struggles
- Insulated Beverageware: Remember when everyone had to have a new Hydro Flask every month? That craze has cooled off. The category is facing "intense competitive pressure," which is corporate-speak for "everyone else is making cheaper water bottles now."
- Hair Appliances: The Beauty & Wellness organic business dropped nearly 14%. People just aren't buying high-end curling irons and dryers at the same rate they were a few years ago.
Is the Debt Actually a Problem?
This is where the debate gets heated. Some analysts look at the balance sheet and see a company in control. Others see a red flag.
Helen of Troy is sitting on about $892 million in debt. Their net leverage ratio is 3.77x. For context, most conservative investors start sweating when that number crosses 3.0x. They did just amend their credit agreement in late 2025 to give themselves more breathing room, which was a smart move. But with interest expenses climbing—up to $15.9 million this quarter from $12.2 million last year—carrying that much weight is getting pricey.
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The "Project Pegasus" restructuring plan is supposed to be the savior here. They’re targeting $75 million to $85 million in annualized savings by 2027. They've already hit their targets for the last two years, so the track record is there. But cost-cutting only gets you so far if people stop buying the products.
What Most People Get Wrong About the Valuation
Right now, HELE looks "cheap" on paper. Its P/E ratio based on adjusted forward earnings is incredibly low compared to the broader consumer staples sector.
But there’s a reason for the discount. The market is pricing in the risk of a "bifurcated consumer." Basically, the wealthy are still buying Osprey packs, but the middle and lower-income families are ghosting the "Wellness" aisle. If the economy stays weird, Helen of Troy’s recovery keeps getting pushed further into the future.
Zacks currently has them at a Rank #3 (Hold), and that feels about right. It's not a "sell everything and run" situation, but it's certainly not a "buy the dip" slam dunk either. You’re betting on Noel Geoffroy’s ability to pivot production away from China faster than the next round of trade wars can hit the bottom line.
Actionable Next Steps for Investors
If you’re holding or looking at Helen of Troy stock, don't just watch the price. Watch these three specific things over the next six months:
- Inventory Levels: They need to clear out the old stock to make room for new, higher-margin innovations. If inventory stays high (currently over $500 million), it means they’ll have to resort to heavy discounting.
- The 25% Threshold: Management has set a goal to get China-based COGS down significantly. Every quarterly report will give a percentage update. If they miss this, the tariff exposure will continue to haunt the stock.
- The "Cough, Cold, and Flu" Bounce: A big chunk of their wellness business relies on Vicks and Braun thermometers. A mild flu season is actually bad for this stock. If the late-winter data shows a spike in respiratory illnesses, you might see a short-term bump in the Wellness segment numbers.
Keep an eye on the $17.01 floor. That’s the 52-week low. If it breaks through that, the technical "dead cat bounce" everyone is worried about becomes a reality, and we could see a fresh leg down before any turnaround takes hold.