Helen of Troy: Early-Stage Portfolio Transformation and Tariff Headwinds Leave Risk/Reward Balanced at Hold

Canaccord Genuity analyst Susan Anderson has maintained their neutral stance on HELE stock, giving a Hold rating on January 9.

Susan Anderson has given his Hold rating due to a combination of factors related to both improving trends and remaining uncertainties in Helen of Troy’s business. Recent quarterly results showed sales modestly ahead of guidance and earnings roughly in line, signaling some operational progress after a weaker prior quarter, and the new CEO is introducing a more growth-oriented strategy centered on higher-potential “green” brands like Osprey, OXO, Olive & June, and Vicks. Management’s plan to invest in these brands, expand internationally, and extend into adjacent categories could support better long‑term growth, but it also raises the likelihood of near‑term margin pressure as spending increases. In addition, parts of the portfolio still require renovation or stabilization before they can contribute meaningfully to growth, indicating that the portfolio transformation will take time and execution risk remains elevated.
Susan Anderson also notes that the company is dealing with meaningful tariff headwinds and balance sheet constraints that limit near‑term upside. Tariffs have added substantial incremental costs in the current fiscal year, and although management is mitigating the impact through supplier negotiations, production shifts, and pricing actions, the benefit from these measures has been slower to realize than originally expected and has already pressured revenue and gross margin via shipment disruptions. At the same time, leverage is currently above 4x, and while management plans to reduce it toward ~2x through debt paydown and working capital initiatives, this must be balanced against the need to reinvest in the brands, which could further constrain profitability in the short run. Taken together, the new strategic direction is promising but still early, tariff and demand dynamics remain a drag, and the elevated leverage profile limits flexibility, leading Anderson to conclude that the risk/reward is currently balanced and to maintain a Hold rating.

According to TipRanks, Anderson is a 5-star analyst with an average return of 18.2% and a 44.76% success rate. Anderson covers the Consumer Cyclical sector, focusing on stocks such as Ulta Beauty, Sally Beauty, and Peloton Interactive.

In another report released on January 9, UBS also maintained a Hold rating on the stock with a $22.00 price target.