Helen of Troy Limited (HELE) has reported a 29.79 percent rise in profit for the quarter ended Aug. 31, 2015. The company has earned $24.45 million, or $0.84 a share in the quarter, compared with $18.84 million, or $0.65 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $32.33 million, or $1.12 a share compared with $28.55 million or $0.99 a share, a year ago. Revenue during the quarter grew 15.37 percent to $369.13 million from $319.95 million in the previous year period. Gross margin for the quarter contracted 171 basis points over the previous year period to 40.10 percent. Total expenses were 91.21 percent of quarterly revenues, down from 92.31 percent for the same period last year. This has led to an improvement of 110 basis points in operating margin to 8.79 percent.
Operating income for the quarter was $32.43 million, compared with $24.60 million in the previous year period.
However, the adjusted operating income for the quarter stood at $41.52 million compared to $36.45 million in the prior year period. At the same time, adjusted operating margin contracted 14 basis points in the quarter to 11.25 percent from 11.39 percent in the last year period.
Julien R. Mininberg, chief executive officer, stated: "We had a strong second quarter, with year-over-year revenue growth of 15.4% and core business revenue growth of 10.9%, both of which include a foreign currency drag of 2.7%.Since the second quarter of last year, we have invested $92.8 million in acquisition and share repurchase, while reducing our total debt by $125.3 million.
For financial year 2016, Helen of Troy Limited expects revenue to be in the range of $1,500 million to $1,536 million. The company projects diluted earnings per share to be in the range of $4.43 to $4.73. It projects diluted earnings per share to be in the range of $5.50 to $5.85 on adjusted basis.
Working capital turns positive
Working capital of Helen of Troy Limited has turned positive to $322.86 million on Aug. 31, 2015 from negative $133.94 million on Aug. 31, 2014. Current ratio was at 2.04 as on Aug. 31, 2015, up from 0.83 on Aug. 31, 2014.
Days sales outstanding went down to 28 days for the quarter compared with 64 days for the same period last year.
Days inventory outstanding has decreased to 72 days for the quarter compared with 161 days for the previous year period.
Debt comes down
Helen of Troy Limited has recorded a decline in total debt over the last one year. It stood at $479.31 million as on Aug. 31, 2015, down 20.72 percent or $125.30 million from $604.61 million on Aug. 31, 2014. Total debt was 27.44 percent of total assets as on Aug. 31, 2015, compared with 34.73 percent on Aug. 31, 2014. Debt to equity ratio was at 0.53 as on Aug. 31, 2015, down from 0.75 as on Aug. 31, 2014. Interest coverage ratio improved to 12.96 for the quarter from 6.15 for the same period last year.
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