Investment Thesis
Helen of Troy is in severe financial distress with -899M net loss, -782M operating loss, and negative operating margins of -43.8%, indicating fundamental business deterioration. The company faces immediate solvency concerns with only $18.9M cash against $785.5M long-term debt and negative interest coverage of -15.1x, meaning operations cannot service debt. While positive operating cash flow ($171.1M) suggests non-cash charges may be inflating losses, the negative operating income and declining revenue signal deteriorating fundamentals that cannot sustain the current capital structure.
Strengths
- Positive operating cash flow of $171.1M despite net losses suggests potential one-time charges rather than pure operational collapse
- Current ratio of 1.71x provides near-term liquidity runway
- Gross margin of 45.7% indicates retained pricing power in core products
Risks
- Catastrophic net loss of -899M and operating loss of -782M indicate severe operational deterioration
- Only $18.9M cash versus $785.5M debt creates acute liquidity risk and refinancing dependency
- Negative interest coverage (-15.1x) means company cannot service debt from operations; refinancing failure would trigger default
- Revenue declining 6.4% YoY while bleeding cash suggests demand erosion in core business
- Negative ROE (-112.6%) and ROA (-42.5%) indicate value destruction across all metrics
Key Metrics to Watch
- Operating cash flow trend relative to net loss divergence—whether cash generation sustains despite losses
- Liquidity position and debt refinancing schedule—critical to assess default risk timeline
- Revenue stabilization—whether bottom has been reached or further declines expected
Financial Metrics
Revenue
1.8B
Net Income
-899.0M
EPS (Diluted)
$-39.08
Free Cash Flow
131.9M
Total Assets
2.1B
Cash
18.9M
Profitability Ratios
Gross Margin
45.7%
Operating Margin
-43.8%
Net Margin
-50.3%
ROE
-112.6%
ROA
-42.5%
FCF Margin
7.4%
Balance Sheet & Liquidity
Current Ratio
1.71x
Quick Ratio
0.81x
Debt/Equity
0.98x
Debt/Assets
62.3%
Interest Coverage
-15.07x
Long-term Debt
785.5M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-29T14:54:37.671668 |
Data as of: 2026-02-28 |
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