Why Has Helen Of Troy Stock Struggled To Perform Despite Stellar Sales Growth?

March 4th, 2022 · by Trefis Team
HELEYTD+26.4%SPYYTD+12.6%XLPYTD+4.7%
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Helen of Troy’s (NASDAQ: HELE) stock price grew just 16% from $180 in 2019 end to almost $210 currently, primarily due to unfavorable changes in its P/S multiple. This comes as a surprise, as the company has witnessed steady revenue growth over this period, combined with a decrease in the outstanding share count, which has boosted revenue per share over this period.

In our interactive dashboard, Why Helen Of Troy Stock Moved: HELE Stock Has Gained 16% Since 2019, we break down the factors behind this move.

(A) HELE’s Total Revenue has grown 34% from $1.6 billion in 2019 to $2.1 billion in 2021, and currently stands at around the same level

  • HELE’s total revenue has grown from $1.6 billion in 2019 to $2.1 billion in 2021 (HELE’s fiscal year ends in February), led primarily by a sharp rise in Health & Home and Housewares revenues, which have each added $200 million in sales since FY ’19.
  • These segments have helped Helen of Troy post strong sales growth in both the United States and international markets.
  • Additionally, HELE’s beauty product sales have also risen almost $150 million since FY ’19, further boosting the company’s revenues.
  • For details about HELE revenues and comparison to peers, see Helen of Troy (HELE) Revenue Comparison

(B) Revenue per share (RPS) increased from $59.95 in 2019 to $83.97 in 2021 and currently stands at $82.91

  • HELE revenue jumped from $1.6 billion in 2019 to $2.1 billion in 2021, while the outstanding share count decreased from 26.1 million in 2019 to 25.3 million currently.
  • Due to this, RPS has risen from $59.95 in FY ’19 to over $80 currently.

(C) Price-To-Sales (P/S) multiple for HELE first rose steadily from 2.7x in 2019 to 3.1x in 2020, but currently stands at 2.5x currently

  • Helen of Troy’s exceptional performance since 2019-end first saw its P/S multiple increase from 2.7x in 2019 to over 3x in 2020, and currently stands at around 2.5x.
  • Despite HELE’s strong sales performance and increased demand, the P/S multiple has dropped steadily since late-2020
  • For additional details about the company’s historical returns and comparison to peers, see Helen of Troy (HELE) Stock Return.

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Returns Mar 2022
MTD [1]		 2022
YTD [1]		 2017-22
Total [2]
 HELE Return 2% -14% 149%
 S&P 500 Return 2% -7% 99%
 Trefis MS Portfolio Return -1% -11% 249%

[1] Month-to-date and year-to-date as of 3/3/2022
[2] Cumulative total returns since the end of 2016

 

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