Helen Of Troy Ltd ( HELE ) shares traded lower premarket on Wednesday after the company reported third-quarter earnings.

The company posted a third-quarter sales decline of 3.4% year-on-year to $530.706 million, missing the analyst consensus estimate of $534.31 million.

The decrease in sales was primarily driven by a decline in sales of Beauty & Wellness.

Total net sales revenue for the Home & Outdoor segment increased 4.3% and Beauty & Wellness plunged 9.3%. Adjusted EPS of $2.67 beat the analyst consensus estimate of $2.60.

Gross profit margin increased 90 basis points to 48.9%. The operating margin contracted 530 basis points to 14.2%, and operating income for the quarter decreased 29.7% to $75.1 million.

Non-GAAP adjusted EBITDA decreased 1% to $96.8 million, with a margin of 18.2% compared to 17.8%.

As of quarter-end, the company held $40.8 million in cash and equivalents. Operating cash flow for nine months totaled $78.2 million, with a free cash flow of $56.1 million, both down year over year.

“Beauty & Wellness was negatively impacted by a weak illness season globally, including the weakest in the U.S. in the past eight years (excluding the COVID anomaly year of 2020-2021) and continued softness in Beauty,” said CEO Noel M. Geoffroy.

Inventory was $450.7 million versus $426 million in the third quarter of 2024. Helen Of Troy reaffirmed a one-time pre-tax restructuring charge of approximately $50 million – $55 million over the duration of Project Pegasus, expected to be completed during fiscal 2025.

Outlook: Helen Of Troy lowered the FY25 revenue outlook from $1.885 billion – $1.935 billion to $1.888 billion – $1.913 billion against an estimate of $1.924 billion.

HELE revised its FY25 adjusted EPS outlook from $7.00 – $7.50 to $7.15 – $7.40 versus an estimate of $7.21.

It revised FY25 adjusted EBITDA guidance from $287 million-$297 million to $292 million – $295 million.

Price Action: HELE shares are trading lower by 4.06% at $56.88 in premarket at the last check on Wednesday.