Helen of Troy Limited HELE has concluded its buyout of Olive & June, LLC. The transaction marks a significant strategic move for Helen of Troy as it expands its footprint in the beauty sector, particularly in the growing DIY nail care market.

HELE Strengthens Beauty Portfolio

Founded in 2013, Olive & June is a fast-growing, innovative brand recognized for revolutionizing the at-home nail care experience. With its comprehensive range of products, including nail polish, artificial nails, tools, treatments and care items, the brand has gained a loyal following and earned numerous industry accolades.

The acquisition complements Helen of Troy’s existing beauty portfolio, diversifying its offerings beyond hair care. Olive & June’s inclusion aligns with HELE’s strategy of "Continuing Better Together M&A," a clear indication that the acquisition is part of a broader effort to strengthen its position in the beauty and wellness space.

Helen of Troy anticipates Olive & June to deliver net sales revenues of nearly $92 million in the calendar year 2024. The acquisition is also expected to immediately contribute to Helen of Troy’s revenue growth, gross profit margin, adjusted EBITDA margin and adjusted earnings per share growth. It is anticipated to positively impact the company’s free cash flow conversion.

HELE Price Performance vs. Industry

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What Else is Driving HELE?

Helen of Troy is committed to long-term strategic initiatives, focusing on strengthening core operations and refining its growth portfolio. By leveraging a data-driven approach, the company is improving brand fundamentals. Expansion efforts in key international markets and the optimization of distribution networks are expected to bolster future sales performance.

The company has been focused on making solid investments in its Leadership Brands, which is a portfolio of market-leading brands. Brands in this portfolio, including OXO, Hydro Flask, Osprey, Vicks, Braun, Honeywell, PUR, Hot Tools and Drybar, are positioned well to enhance market share. These high-margin brands account for a significant chunk of the company's sales.

The company’s restructuring plan, Project Pegasus, bodes well. The plan aims to expand operating margins via initiatives designed to improve efficiency and reduce costs. Project Pegasus includes efforts to optimize the company’s brand portfolio, streamline and simplify the organization, increase the cost of goods savings projects and improve the efficiency of the supply-chain network.

Wrapping Up

As the DIY nail care trend continues to thrive, Helen of Troy’s investment in Olive & June is expected to be fruitful. The synergy between the two companies should result in continued product innovation and customer loyalty. With this acquisition, Helen of Troy strengthens its competitive position in the beauty industry, and the addition of Olive & June positions the company to benefit from one of the fastest-growing categories in personal care. HELE’s commitment to enhancing shareholder value through strategic M&A continues to be a driving force in its growth strategy.

Shares of this Zacks Rank #3 (Hold) company have rallied 13.8% in the past three months, outpacing the industry’s decline of 5.6%.

Some Solid Bets

We have highlighted three better-ranked stocks from the Consumer Staples sector — Ingredion Incorporated INGR, Freshpet FRPT and US Foods Holding Corp. USFD.

Ingredion Incorporated manufactures and sells sweeteners, starches, nutrition ingredients and biomaterial solutions derived from wet milling and processing corn and other starch-based materials. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

INGR has a trailing four-quarter earnings surprise of 9.5%, on average. The Zacks Consensus Estimate for Ingredion’s current financial year’s earnings indicates growth of 12.4% from the year-ago reported number.

Freshpet, a pet food company, presently carries a Zacks Rank #2 (Buy). FRPT has a trailing four-quarter earnings surprise of 144.5%, on average.

The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings suggests growth of 27.3% and 228.6%, respectively, from the year-ago period’s reported figure.

US Foods, together with its subsidiaries, engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to food service customers in the United States. It currently carries a Zacks Rank #2. USFD delivered a negative earnings surprise of 0.4% in the last reported quarter.

The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings indicates growth of 6.4% and 18.6%, respectively, from the prior-year reported levels.

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Freshpet, Inc. (FRPT) : Free Stock Analysis Report

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