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Helen Of Troy Begins Fiscal Year With A Big Quarterly Beat, BofA Raises Estimates

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Helen Of Troy Begins Fiscal Year With A Big Quarterly Beat, BofA Raises Estimates

Helen of Troy Limited (NASDAQ: HELE) announced its first-quarter 2020 results handsomely ahead of expectations.

The company continues to have growth opportunity ahead, and there seems to be upside to the current guidance, according to Bank of America Merrill Lynch.

The Analyst

Bank of America’s Olivia Tong maintained a Buy rating on Helen Of Troy, while raising the price target from $160 to 165.

The Thesis

Helen of Troy reported quarterly EPS at $2.06, ahead of BofA’s $1.69 estimate. Core sales growth of 7% year-on-year was significantly higher than the flat expectations, Tong said.

She added that the results were driven by Housewares and Beauty, while the decline in Health & Home was much lower than expected. The company’s gross margin was in-line with expectations, with favorable mix and leverage being offset mainly by higher freight costs and unfavorable FX.

The company guided to FY2020 core sales growth of between 1.7% and 3.6%. Full-year EPS guidance was raised from $8.25-$8.50 to $8.40-$8.65.

“Relative to the sizable Q1 beat, the hike to guidance was relatively modest,” Tong wrote in a note. She added that management seems to have left room to hit or raise targets, which is “a prudent move just one quarter into the year.”

The analyst raised the EPS estimate for FY2020 from $8.40 to $8.55.

Price Action

Shares of Helen of Troy had spiked more than 12.61% to $148.27 at time of publication.

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Latest Ratings for HELE

DateFirmActionFromTo
Apr 2021DA DavidsonMaintainsNeutral
Mar 2021DA DavidsonDowngradesBuyNeutral
Jan 2021OppenheimerDowngradesOutperformPerform

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Posted-In: Bank of America Merrill Lynch Olivia TongAnalyst Color Earnings News Price Target Reiteration Analyst Ratings

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