Helen of Troy Raised Its Outlook. The Tariff Refunds Deserve a Closer Look.

Helen of Troy just raised its earnings outlook, and there’s a detail I’d check before getting too excited about the bigger number: how much of the improvement comes from tariff refunds?

The company behind brands including OXO, Hydro Flask and Osprey reported stronger quarterly sales and profits on October 8. There’s encouraging operating progress here. There’s also a refund benefit large enough to make the guidance arithmetic unusually revealing. Yes, the footnotes have invited themselves into the good-news story again.

For its second quarter ended August 31, 2026, Helen of Troy reported revenue of $440.9 million, up 2.1%, and adjusted diluted earnings of $0.79 per share, versus $0.59 a year earlier. Reported GAAP earnings were $0.19 per share. Helen of Troy trades on Nasdaq as HELE.

The outlook increase comes with a useful calculation

Management now expects fiscal 2027 adjusted diluted EPS of $3.60 to $4.15, compared with its previous $3.25 to $3.75 range. These are company forecasts using a non-GAAP measure, not earnings already delivered.

The old midpoint was $3.50. The new midpoint is $3.875, an increase of $0.375. Management’s estimated full-year benefit from tariff refunds, after reinvestment and tax, is $0.30 to $0.45 per share. Its midpoint? Also $0.375.

That match gives shareholders a reason to examine the refund contribution. July’s outlook already included $9.2 million of gross refunds. This is not a complete bridge between the forecasts.

Expected interest expense fell, the upper end of the adjusted tax-rate forecast increased, and the expected diluted share count rose.

Meanwhile, the revenue forecast narrowed to $1.768 billion to $1.822 billion. Its $1.795 billion midpoint is unchanged. So the earnings upgrade doesn’t come with a higher companywide sales midpoint.

This is the sort of comparison covered in our guide to reading an earnings report: check what changed underneath the headline before deciding what it says about the business.

Most of the refunds are headed back into the business

The full-year outlook includes approximately $80.5 million of estimated gross pre-tax tariff refunds. Helen of Troy plans to reinvest roughly 83% to 88% in areas including brands, demand creation, its organization and inventory composition, leaving an estimated $10 million to $14 million pre-tax earnings benefit.

That distinction matters for anyone mentally adding the entire $80.5 million to profit. Management has already assigned most of those dollars another job.

Timing matters, too. The quarterly filing says the company plans to submit Phase 3 refund requests when Customs and Border Protection opens acceptance. The annual estimate should not be read as cash already collected.

The second quarter included $26.9 million of recognized gross pre-tax refunds, largely offset by about $23 million of reinvestment.

The company estimated a net EPS benefit of approximately $0.12. Subtracting that estimate from adjusted EPS of $0.79 leaves about $0.67, still above the prior year’s $0.59. That’s a rough comparison, not a company-reported measure or a clean recurring-profit figure: it still excludes litigation costs discussed below.

The backpacks are doing better than the beauty aisle

Home & Outdoor sales grew 9.2% to $227.9 million. Management cited demand for packs, international growth, wider assortments and distribution, new products, and increased closeout-channel sales. That last contributor is worth keeping in the picture rather than treating every extra sales dollar as stronger full-price consumer demand.

Beauty & Wellness sales fell 4.5% to $213.0 million. Hair appliances, prestige hair care and water filtration were weaker, partly offset by heaters, thermometers and nail care. The recovery is moving at different speeds across the portfolio.

Despite Home & Outdoor’s strong quarter, management lowered its annual sales range by $8 million at both ends, to $851 million to $876 million.

There’s a change in adjusted earnings reporting to watch alongside those sales trends. Beginning this quarter, adjusted results exclude costs tied to product litigation involving a personal-care business sold in 2021. The quarter’s exclusion was $4.0 million, or $0.17 per share in the adjusted EPS reconciliation. Management explains why it considers these costs outside ongoing operations; shareholders should still recognize that the costs exist.

What would make the progress more durable?

I’d watch whether stronger product sales and the planned reinvestment support profits after the refund benefit passes. The company still expects inflationary pressure, cautious retailer inventories and a competitive promotional environment.

There’s financial progress already: debt fell to $672.6 million from $893.2 million a year earlier, while first-half operating cash flow increased to $56.5 million from $47.9 million. Those are encouraging figures alongside a mixed sales picture.

For now, Helen of Troy has earned a closer look at the recovery. The next question is how much of today’s improvement the brands can keep producing once the refunds stop helping.