The consumer product company Helen of Troy Limited's (HELE) fully-owned subsidiary and nutritional supplement producer Healthy Directions entered into a supply agreement with ChromaDex Corporation. ChromaDex will supply ingredients for the vitamin supplements produced by Healthy Directions.
ChromaDex is a well-known supplier of proprietary ingredients and science-based solutions to the nutritional supplement industry. Moreover, ChromaDex's supplement Niagen is the only commercially available form of nicotinamide riboside (NR), a naturally occurring no-flush vitamin B3 metabolite found in milk. The vitamin is believed to support healthy cellular metabolism, including the efficient conversion of blood glucose into energy.
Helen of Troy has recently acquired Healthy Directions to foray into the health business. The takeover made it easier for Helen of Troy to enter the vitamins, minerals and supplements (VMS) category. (Read: Helen of Troy Steps into Vitamin Supplements; to Buy Healthy Directions)
Healthy Directions boasts several highly acclaimed physicians and nutritional experts in heart health, digestive health, joint health, skin care and vision support.
According to Nutrition Business Journal, the future of the VMS business seems bright as more than 70% of the U.S. population aged 55 and above took vitamin supplements in 2013. In addition, the market is expected to continue growing at a mid-to-high single-digit rate annually through 2020.
Helen of Troy is thus geared to bolster its presence in the health and wellness category to boost its weak top line. Last week, the company lowered its fiscal 2015 outlook ahead of the Barclays Back-To-School conference. A weak retail environment and sluggish growth in the Personal Care segment prompted the company to lower its outlook. (Read: Helen of Troy Lowers FY View on Weak Retail Conditions.)
The Zacks Rank #4 (Sell) company has been witnessing soft earnings and sales for the past few quarters due to tough retail conditions, slower store traffic and mass market retail sales in the large retail outlets. The Personal Care segment has experienced soft results and its decline has accelerated recently particularly in the commoditized part of the business.
Management has taken several strategic initiatives to improve sales in the Personal Care segment. However, the initiatives are expected to take some time to yield results.
Some better-ranked stocks to consider in the apparel industry include Crocs, Inc. (CROX), Perry Ellis International Inc. (PERY) and Michael Kors Holding Ltd. (KORS). All these stocks carry a Zacks Rank #2 (Buy).
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