Benzinga | Jul 8, 2021 10:10AM EDT

Helen Of Troy Q1 Results Beat Estimates; Provides Downbeat Outlook For FY22

* Helen of Troy Limited (NASDAQ:HELE) reported first-quarter FY22 sales of $541.2 million, a 28.6% growth year-on-year, beating the consensus estimate of $438.90 million.

* Beauty and Housewares led to the increase in sales as the easing of COVID-19 restrictions drove store traffic.

* Organic business sales grew 27.3% Y/Y.

* The company recorded a $13.1 million charge related to the Environmental Protection Agency's (EPA) packaging compliance costs on concerns that packaging claims on certain products in its U.S. water and air filtration and a limited subset of humidifier products are not in compliance to EPA's standards.

* The adjusted operating margin for the quarter was 17.5%, with an adjusted operating income of $95 million.

* Adjusted EPS of $3.48 beat the consensus estimate of $2.62, with a 37.5% increase Y/Y.

* Cash and cash equivalents totaled $37.4 million as of May 31, 2021.

* Outlook: The company expects FY22 Core net sales revenue of $1.9 billion to $1.95 billion, with the consensus estimate at $2.02 billion.

* Helen of Troy sees FY22 adjusted EPS of $10.25 to $10.75 against the consensus estimate of $11.83. GAAP EPS is estimated at $6.80 to $7.49.

* The company expects to incur additional EPA compliance costs, which may include costs to relabel or repackage existing inventory as well as incremental freight and storage costs, among other things.

* Price action: HELE shares traded lower by 9.12% at $211.16 on Wednesday.