Helen of Troy Shares Drop Following CEO Departure Announcement

Shares of home goods and wellness products company Helen of Troy (NASDAQ: HELE) fell by 10.4% on Monday. The company has faced significant challenges recently, including an earnings report that disappointed investors and uncertainties pertaining to tariffs. Additionally, a sudden announcement on Friday after the market closed revealed that its CEO was departing the company.

Typically, CEO departures can lead to a rally in a struggling stock, as investors may hope for a fresh start. However, in Helen of Troy’s case, the market response suggested concerns might run deeper.

Interim Leadership in Place, Permanent Successor Unknown

On Friday afternoon, Helen of Troy reported that CEO Noel Geoffroy would be leaving “effective immediately.” Geoffroy had only been in the role for one year, having assumed leadership in March 2024.

The immediate nature of this change raises concerns about underlying issues, prompting unease among investors. The company appointed CFO Brian Grass as interim CEO while the board searches for a permanent replacement. Grass, who previously served as CFO from 2014 to 2021 and resumed his role in 2023, has not alleviated investor anxiety.

So far this year, Helen of Troy’s stock has plummeted by 58%. Despite slightly beating revenue expectations in the last quarter, the adjusted (non-GAAP) EPS fell short of forecasts. Furthermore, the company reported an overall revenue decline of 0.7%, even following the December 2024 acquisition of Olive & June. Notably, on an organic basis, revenues fell by 4.9%. Investors may also have reservations about the Olive & June acquisition, which added $235 million to the company’s debt load, posing a further challenge in a potential recession.

Image source: Getty Images.

Uncertainty Surrounds Helen of Troy

Last month’s earnings fell short of expectations, but investor jitters were primarily driven by tariff-related factors. Helen of Troy manufactures its products in China, Vietnam, and Mexico, meaning the company must adapt to new tariffs or hope for more favorable trade deals.

The sudden resignation and the lack of a smooth transition plan have understandably put investors on edge. Even at a valuation of just 5.5 times expected adjusted earnings for 2025, the company’s declining revenue and increased debt indicate a potentially risky investment, raising the possibility of it being a value trap.

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Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.