Executives at Helen of Troy, the parent company of Osprey and Hydro Flask, largely blamed tariffs after a challenging first quarter that took a toll on its home and outdoor portfolio of brands.
Consolidated sales in Helen of Troy’s home and outdoor portfolio – which includes Osprey, Hydro Flask, and Oxo – were $177 million in the three months ended May 31, down more than 10% year over year from $198 million.
Helen of Troy attributed the decrease to softer demand in home and insulated beverageware resulting in lower replenishment orders, as well as negative impacts from tariffs.
“Overall, the segment sales decline was driven primarily by direct import cancellations, tariff-related pull forward by retailers in the fourth quarter of last year and softer point-of-sale internationally, driven in part by cascading impacts of trade policy in the China market,” said Brian Grass, interim CEO, on the company’s Thursday earnings call.
Drinkware sales slid 25% to $45 million in 2024, according to data collected by Circana. Hydro Flask remains challenged in the U.S. but showed positive momentum in regions such as Asia Pacific and Canada.
Osprey reported revenue growth of 3.7% during the quarter, Grass said, benefiting from expanded distribution and products outside of technical packs, as well as strong direct-to-consumer performance.
“(The) technical pack market remains challenged, Osprey continues to lead, holding the No. 1 market share three times the size of the next national brand,” Grass said. “Osprey again gained share in the kit carrier pack category and also received two major accolades this quarter: the Skarab 18 was named best hydration pack for hiking, and the Atmos AG 50 won best multiday hiking pack in the Men’s Journal 2025 Outdoor Awards.”
Helen of Troy Q1 Results
The company reported a net loss of $450.7 million, down from a $6.2 million profit in the same quarter last year.
Consolidated net sales decreased 10.8% to $371.7 million compared to $416.8 million in the prior year. Approximately 45% of the revenue decline was driven by tariff-related trade disruption, Grass said. Major retailers paused or cancelled China direct import orders, while others pulled forward inventory in previous quarters due to tariff uncertainty.
Helen of Troy faces tariffs as high as 145% on products from China, forcing the company to rethink its supply chain strategy. The company estimates a gross unmitigated tariff impact of $60-70 million for fiscal 2026, though aggressive mitigation efforts aim to reduce the net impact on operating income to less than $15 million.
The company recognized non-cash asset impairment charges of $414.4 million ($436.2 million after tax), during the first quarter of fiscal 2026, to reduce goodwill by $317.0 million and other intangible assets by $97.4 million. The outdoor brands weren’t immune to the company’s broader asset impairment charges. Helen of Troy recorded impairment charges of $120.8 million for Hydro Flask and $98.3 million for Osprey.
Tariff Mitigation Strategy
Helen of Troy is reducing its dependence on China-based manufacturing. By the end of fiscal 2026, the company expects 40% of its remaining China-based supply to be dual-sourced, increasing to 60% by the end of fiscal 2027. This dual-sourcing strategy has been in development for several years.
The company is also implementing price increases across its portfolio. Grass noted that the company has worked with retailers to implement average price increases in the range of 7% to 10%.
Leadership Transition Amid Turbulence
The company’s struggles coincided with significant leadership changes. In April, CEO Noel Geoffroy announced Helen of Troy would abandon its forecast for fiscal 2026 in light of tariffs and the uncertainty they presented. A month later, Geoffroy departed after the board terminated her without cause after less than two years in the role.
“I feel fortunate to have stepped into my role as interim CEO with a strong understanding of our business, our opportunities, and the headwinds we face,” Grass said.
That forecast, albeit a cautious one, was restored in Q1 by Grass. Helen of Troy projects second-quarter net sales of between $408 million and $432 million, a decline of 9% to 14% compared to the prior year. The company projects its home and outdoor portfolio net sales to decline between 16.5% and 11.5% year-over-year. Adjusted earnings per share are expected to range from $0.45 to $0.60, down significantly from previous periods.
Interim CFO Tracy Scheuerman emphasized the company’s financial stability despite current challenges. Helen of Troy generated $45 million in free cash flow during the quarter, which will help fund supply chain diversification efforts.
“We are well-positioned to navigate the macroeconomic environment and emerge stronger,” Scheuerman said.
Kate Robertson can be reached at kate@shop-eat-surf-outdoor.com.
