Citing US tariffs as a major factor in its lacklustre earnings report, Helen of Troy, the parent company of hair brand Drybar and nail care maker Olive and June, plans to raise prices and its decrease China exposure.
The company reported on Oct. 9 it net sales of $431.8 million, a decline of 8.9 percent for its fiscal second quarter. This was driven by a decline in its beauty and wellness division, which sunk by 18.2 percent in organic sales, while overall beauty and wellness net sales revenue declined 4 percent. A bright spot in the beauty division was Olive & June, which it acquired in December 2024 and contributed to 7 percent of consolidated net sales at $33.4 million. The company also makes hair tools under the Revlon and Bedhead by Tigi brands.
In a statement, chief financial officer Brian L. Grass said the business had experienced significant disruption and cost headwinds. “While we are not satisfied with our results, the second quarter marked a step forward with net sales and adjusted earnings per share at the better end of our guidance,” he said.
In addition to softer consumer demand, price hikes on cost of goods sold, increased competition and a net distribution loss, the report noted that tariffs have had an especially big impact, with a high rate of cancellations on import orders from China.
In the statement, newly appointed chief executive G. Scott Uzzell said he was confident in the company’s ability to engineer a “great comeback story.” To that end, the company is diversifying its production away from China, with a plan of reducing its cost of goods sold exposed to China tariffs to between 25 percent and 30 percent by the end of fiscal 2026. It will also attempt to mitigate tariff impact through price increases.
“We made progress in the second quarter, but there are no quick fixes as we work to get back on a path to growing market share and driving sustainable growth,” he said.
This fiscal year, the company is projecting between $1.73 billion to $1.78 billion in sales, though it expects unfavourable impacts on inflation, consumer confidence, employment, and overall macroeconomic conditions to continue.
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