Helen Of Troy Limited ( HELE ) shares plunged over 16% premarket Thursday after the company reported a sharp 51% drop in second-quarter adjusted earnings per share and warned of persistent cost pressures and tariff-related disruptions that are expected to weigh on results for the rest of fiscal 2026.

Adjusted earnings per share tumbled 51.2% year-over-year (Y/Y) to 59 cents, beating the analyst consensus estimate of 53 cents.

Quarterly sales declined 8.9% Y/Y to $431.8 million, beating the street view of $418.8 million.

The results were affected by significant business disruptions and cost headwinds, which are expected to persist for the remainder of the year.

Home & Outdoor net sales fell 13.7% Y/Y to $208.7 million, while Beauty & Wellness revenue declined 4.0% Y/Y to $223.1 million.

Helen of Troy registered an adjusted operating margin of 6.2% compared to 9.8% in the year-ago period. Adjusted EBITDA margin was 8.4% compared to 11.8%.

The company exited the quarter with cash and equivalents totaling $22.4 million and inventory valued at $528.9 million.

Outlook

The company expects a third-quarter adjusted EPS of $1.55-$1.80, which is below the analyst estimate of $1.98.

For fiscal year 2026, the company sees adjusted EPS of $3.75-$4.25 versus the street view of $4.58 and sales of $1.739 billion-$1.780 billion versus consensus of $1.750 billion.

The company says that it is assessing the ongoing impact of global tariff changes and its mitigation plans, including diversifying production outside China to regions with lower tariffs.

The company now expects 25% to 30% of its cost of goods sold to be exposed to China tariffs by fiscal 2026, up from the previous estimate of less than 25%.

In the first quarter of fiscal 2026, the company adjusted its cost-saving measures, including suspending non-essential projects, cutting personnel costs, pausing travel expenses, and resuming high-return marketing investments. It also plans cautious inventory purchases from China, expecting softer consumer demand.

These actions are expected to limit the net tariff impact on operating income to under $20 million, up from the previous estimate of $15 million, with price increases planned for the second half of fiscal 2026.

Price Action: HELE shares were trading lower by 16.33% to $23.10 premarket at last check Thursday.

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